This action might not be possible to undo. Are you sure you want to continue?
SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
they pay the sticker price. such as these: • You receive the wrong order at a restaurant. 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. But if you scored 8 or less. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. at a flea market. but many of us miss the opportunity to bargain in other situations. or engage in an unproductive argument. with neighbors. Who. practical tactics useful in real-life situations at work or at home. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. exactly.negotiator! Pass this book on to someone else who needs it. • A child wants a new toy now. with family members. • A co-worker asks for volunteers for a new project. some will in retrospect even remember being the victim of one or two of them. 4 50 Practical Negotiation Tactics . Instead. few people understand that normal interactions represent bargaining opportunities. Most readers will no doubt recognize some of these strategies. accept what is given. Unfortunately. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job.
perhaps you can say to a hotel clerk. Flexibility. A service repair person gives you an estimate on some work. Multiple parties. and each side can involve one person or several people (each representing one “side” of the issue). A teenager wants to buy his/her first car. 2. one party is only allowed to follow policy or must wait “until the manager arrives. some resolution must be negotiated. be prepared to bargain. The parties involved are interested in reaching a common goal. In some circumstances. that can be negotiated. since you lost my reservation. Your spouse wants to buy new furniture. and I don’t have time to wait for another. There are flexible elements to the situation. A neighbor wants to remove an old tree on your property line. perhaps the employee can say. There must be a conflict in the sense that what one wants is not what the other wants. Two or more sides are involved. For example. Decision-making ability. Both sides want a settlement. 4. The parties involved can make a decision by themselves. Each one has the five key characteristics necessary for bargaining: 1. “I’d like Introduction 5 . What are my alternatives?” During an employee evaluation. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. All of these situations are opportunities to negotiate. “Well. Mutual goals. In some situations. such as price. Therefore. time. 5.” When you recognize that something can be negotiated. A friend is about to select the movie he/she wants everyone else to see. Interdependency. you must advise the other party of your intention to negotiate. 3.• • • • • • • A hotel clerk tells you that your reservation was lost. Your boss reviews your past year’s performance. or items of value. The parties are interdependent: what one party does affects the other. condition.
and the tactics that might move the negotiations along. 6 50 Practical Negotiation Tactics . negotiations can be concluded with a written or oral agreement. the parties and their interests. Keep this book handy when preparing for any type of negotiation. but I believe it adds value to our house. “I see why you want to cut down the tree. and meet with you again. the other party will realize that you intend to negotiate and do not accept the situation.time to look over this performance review and respond point-by-point. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. the facts. Once a settlement is reached. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. and use the forms in the back to identify the issues. 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. You can then use one or more of the tactics presented in this book to achieve the best possible settlement.” To a neighbor you can say.
? 10. have you ever required a written agreement covering chores. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. did you request appropriate compensation? 6. or division of household duties. When you purchased your last home or car. Yes No Self-Assessment Quiz 1. In the past. do you routinely negotiate a last add-on before you close the deal? 9. When making a major purchase. spouse. As a parent. Do you wish you could negotiate a change in your job duties or salary? 7. but you did not? 8. or child. In the past. do you believe that you negotiated the best possible deal? 4. 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 routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. etc. The last time you received sub-par service or food in a restaurant. allowance.How good are your negotiation skills? Place a check in the box that applies to you. Do you routinely negotiate for better accommodations when you check into a hotel? 3.
This page intentionally left blank .
including those that are less obvious. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. one for another. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). etc. The Negotiation Process 9 . Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). The “Quick Model” approach outlined below is good for simple negotiations. Examples: • office location (city. decide how complicated the issue is. On the other hand.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. If it is a relatively informal situation.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. the process will be fairly straightforward. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. the process will probably take several weeks or months as the parties move through all the stages. thus allowing each side to achieve one of their goals. They’re referred to as “win-win” because each side can achieve their goal. state.
Depending on the situation and the parties involved.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. The Comprehensive Model Negotiation is more of an art than a science. but feel free to try them when they seem most appropriate to your specific circumstance. Examples: • an item sold by one party and bought by the other • wage increases won by one side. the other side loses. or even skipped altogether. rearranged. 10 50 Practical Negotiation Tactics . What one side gains. 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. stages can be combined.
The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 . Information.
This page intentionally left blank
SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
as a last resort. and it now employs 230 craftsmen. providing them with a very good income for life. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. The threatened strike became a reality. and final offer. was a power play. The union is demanding wage and benefit increases. his BATNA was not to hold out for more money. 16 50 Practical Negotiation Tactics . In this case. best. With only two weeks remaining before a threatened strike. Conclusion Selling their business was the Jaggers’ BATNA.” which was refused. The Jaggers gave the union their “last. The union negotiators convinced the employees that this too. The $56 million dollar business took them 30 years to grow. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. 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. inventory. and equipment. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. The union negotiators thought the Jaggers were bluffing. selling became an attractive alternative to a strike or prolonged battle. They learned that their assets would be easy to sell and were worth more than originally estimated. For the past two months. notified all the employees of their intentions. but rather what the buyer planned to do with the car. the Jaggers decided to seek buyers for their land. The owners. as Harvey had for many years. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. When negotiations with the union became hopeless.
Just running out of space. A person who has to sell her home because her company is relocating her. If you are the party making the offer on the house. Are you finally ready to sell it? Yes. I guess I couldn’t take less than $20. and told John several times to let him know if he ever wanted to get rid of it. for example. What changed your mind about getting rid of it? It is still in perfect condition. Example 1 Tom had always admired John’s 1861 Confederate rifle. Tom: $20. John: Tom: John: Tom: Tom. you know. sure. what the other party’s desired outcome is. Make me an offer. it’s to your advantage to know what is behind a seller’s decision to put it on the market. Just as important is the why. This is a good thing to know. Preparation 17 . I’ve been thinking of getting rid of it for a while. How much are you thinking it’s worth? John: Well. it’s still perfect.000? That’s more than I planned. I’ll have to think about that. 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 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. because if the company does not provide relocation benefits. right? John: Sure. you still interested in my rifle? Of course. she might have to take a lower offer just to be able to move. I think so.000. Gosh. John assured Tom that this would never happen. at some point.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. It is extremely rare—one of only 100 made with that bore and handle. so Tom was surprised when John called him out of the blue one day with a proposal.
I don’t think I can go higher than $18. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. Conclusion Tom entered into the negotiations suspicious of John’s motives. and now the two-year requirement has become a stumbling block in the negotiations. the owner of a small manufacturing company. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position.Tom: Okay. we really want to buy your company. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. but I could get the money to you right away. parties to a negotiation are not likely to reach agreement. Rick needs to remain president of the company for the next two years. but then he will be happy to retire. When Tom found out why John decided to sell his rifle. John: Well. but thought this might explain John’s sudden interest in selling the rifle.500 had an 1861 for sale. and we’re committed to keeping it open as a major division of our company. Well. if you could come up a little—say $18. Tom now felt comfortable negotiating the price. it made the negotiations easier. BigManu: Rick.500—we’d have a deal. No longer worried about John’s motives.000. I’ve been thinking about your offer. has begun negotiations to sell his firm to BigManu Company. let me think about it and I’ll get back to you. fearing that this will put all of his employees out of work. He is two years away from retiring and does not want his business to fail before he does. However.) Tom: John. Tom: Okay. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. Without some trust. The sale price for the company has not yet been agreed to. we 18 50 Practical Negotiation Tactics . let’s do it. Was Tom interested? Tom declined. Example 2 Rick.
and I hired every one of these people. Let’s talk later. Rick: I built this business from the ground up. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. and we think it’s an odd request anyway. you will have a say in how the employees are treated. BigManu: We just don’t see a way to give you what you want on this. let’s talk about the job guarantee you wanted. You’ll be in place to participate in our employment decisions. Working as a division of your company. We just can’t make good operational decisions with our hands tied. Within the parameters of efficiency and effectiveness. my employees will prove to you that they are uniquely able to run this place.cannot guarantee to you that ALL of your employees will be retained for two years. Preparation 19 . and he accepted it subject to agreement on the two-year employment guarantee clause.) BigManu: Okay. (Between negotiating sessions. BigManu: You know we want you to stay on and manage this division for us. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. We still can’t find a way to do it. In hopes of pushing the deal forward. I need to give them some sense of comfort if this deal goes through. Without this commitment. The price they gave Rick was actually more than he had expected. I just can’t go through with this sale. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. 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. I just don’t want it to change after I’m gone. I just want them to have a real chance to show you how good they are.
Conclusion By masking his real objective (giving himself two more years as president before retiring). Let me get back to you. to tell you the truth. 20 50 Practical Negotiation Tactics . I’m hoping to retire in two years. you’ll have a guaranteed “in” to protect your people. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. I certainly want to do all I can until then to protect my people. Rick: Well.BigManu: We intend for you to stay and become a big part of our company. Surely you’ll be able to “protect” your people if they are as good as you say. would it? Rick: Well. This wouldn’t have anything to do with your own plans for the future. that might work. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. Rich almost lost the deal. but we won’t be completely tied to operations as they are now.
) Let’s take all our Beanie Babies to my house to trade! Okay. the frog is everybody’s favorite. too. it’s a deal. such as a hotel conference room. (thirty minutes later) Bailey: So. they control the breaks and environmental factors. Bailey: Cybil: Preparation 21 . 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. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. Cybil. girls. I like the frog. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. (Think of the showroom tactics used by car dealers.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. and so on. they have the information they need at their fingertips. Mother: Hush. Make up your minds.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. and go play somewhere! Cybil: Well … Okay. 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.
The physical and emotional demands of 24-hour. and other conveniences in the adjoining room. although only ten years old. Team B. When negotiations resumed in two months over another piece of property. The firm deadline was only four days away. They were blamed for accepting the same deal that had been rejected only days earlier. meals. After forty hours of negotiating. Team A agreed to a settlement almost identical to the one rejected days before. Team A was whipped physically and emotionally. Both sides desperately needed to settle a property dispute. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. as long as they met in the boardroom of Team B.” The chief negotiator for Team B agreed. around the clock. was still going strong. in their own familiar setting. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. not one member of Team A was chosen to return to the table. until we have a settlement.Conclusion Bailey. That’s why she wanted to go to her house. having set up beds. 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 had clearly used its home turf to gain a substantial advantage. About thirty-six hours later. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. 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. 22 50 Practical Negotiation Tactics . Team A agreed to change the meeting place. non-stop negotiations wore down the members of Team A.
It was twice as high as the estimates Larry received from other plumbers before they started the project. Larry was thrilled. I anticipated much less work. I was kind of surprised at how high it was. Larry: But Will. though. This uncomfortable negotiation followed: Larry: Will. Larry: Just make sure you’re comparing apples to apples. and they were much lower than this. When we got into it. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. it became clear that all of those pipes had to be pulled and new ones put in. Will: Larry. I gave you my “family” rate. When you first told me about your project. If you think that the other party knows more than you do. I would have charged anyone else much more. Will is a licensed plumber.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. Let’s get the guys back in who gave you estimates. rather than give them the “advantage. you are likely to resent them for it and hold out. If they tell us that they either Preparation 23 . these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. Larry: Well. about your bill. but was shocked at the amount of the bill. when Will presented Larry with his bill. based on objective criteria (think property appraisals in real estate). Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. After all. and he and Larry have always gotten along. Things turned sour. Larry had expected to pay him for his time. and show them the actual work that got done. Believe me.” This can hold up an agreement and cost you in the end.
they would have had to revise the figures. He was disappointed in the performance of the fund. while she wasn’t an expert. I’ll revise my bill to meet the lowest estimate you get. they had to agree that their early estimates were low. I certainly didn’t mean to offend you. and no one had ever questioned her performance. she had been investing the college’s endowment funds for many years. because (as Will pointed out) it wasn’t an apples-to-apples comparison. 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. they said. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. Budget Officer: I don’t know what your problem is. Comparing the estimates to Will’s actual costs would have been counterproductive. From a look at the portfolio. Conclusion When the other plumbers looked at the work. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. The college’s budget officer was understandably offended. he used his financial expertise to analyze the investments of the college’s endowment fund.disagree on the need for that work or that they would have done it for less. and decided to bring the matter up at a Board meeting. Example 2 After Stuart was appointed to the college’s Board of Trustees. The estimates would have been higher than what cousin Will charged. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . Had they actually prepared bids on the work. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry.
but such a strategy also increases risk and costs more money to administer. considering commissions and all. As you know. I find that a more aggressive investment strategy produces a better return. Okay? Budget Officer: Okay. I don’t want you directing how they’re going to go. Stuart: Yes. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. and its resources are limited. Preparation 25 . I don’t question that they were sound at one time. then you and I can talk about changing our investment strategy. if both of them demonstrate a similar strategy and produce better results after expenses. At the end of two months.were stale. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. Why don’t we ask two investment advisors who have some alumni ties to the college to do a mock investment of the endowment fund for a month or two? We won’t tell them about each other and they won’t actually do any real trades. but I want to be involved in the discussions with them about what we’re asking. because she did not have the background in investments necessary to trust such advice. I have a suggestion. In this situation. but some of these stocks have really lost their value. Now. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. there might be increased risk and some expenses for commissions. Stuart realized that the budget officer needed very-specific “criteria” (such as the actual experience of investing the school’s endowment fund) rather than relying on an investor’s experience. but I think they more than offset the gains. Stuart: No problem. but we can ask them to plan and cost out each move. Budget Officer: Yes. the college is a private institution.
It will cost me more than $10—about $35 per week. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. Mother: That’s a large increase—and we just raised it last year! Shari: Well. a sixteen-year-old who lives with her parents and three younger sisters. wash the cars. if I give you an increase. cut the grass. (3) more chores.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. not just an allowance increase! There is: (1) a $10 increase. I need more money for clothes and CDs. Example 1 Shari. and ask the other party to add to the list. has asked her mother for a $10/week increase in her allowance. your little sisters will want equal treatment. You can’t treat me the same! Mother: Well—so we’re talking about several issues. Once you both agree on the list of things to be negotiated. not on what you want to spend. clean the whole house—should I continue? Shari: Whoa! I want to stay out longer—past my curfew of 10:00—not work more! Mother: Well. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . Shari: I’m four years older than the next-oldest. what else can I do. Mother: But your allowance is based on what you earn in your weekly chores. This strategy can build trust in the negotiation process itself. baby-sit your sisters. and for going out with my friends. Shari: Well. (2) a later curfew.
but unlike your sisters. Then a “win-win” solution could be determined. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. opens by proposing the list of items. which the other children would have requested as well. The union’s chief negotiator. Now it is time for each side to list their desired outcome for each item. and item #23 (the wellness program voucher). Now we have a package deal to propose … Preparation 27 .Shari: Right! Mother: So … I suggest no allowance increase. in the first session. Shari got the $10 she wanted and a later curfew. I’ll pay you $10 to babysit every Wednesday night. since all of their items were included as requested. you get to stay out an hour later that night. if you agree to our proposals on item #3 (the paid vacation schedule). Management agrees. while the mother won a Saturday house-cleaning and a night out each week. item #11 (the clothing allowance). was avoided. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). An allowance increase. while your Dad and I go out. The trading of items (where initial demands are discussed and agreed upon) begins. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. And if you clean the whole house on Saturday.
the two sides will at this point sign and date the list of proposed items. other trade-offs are proposed and agreed to until only a few items remain.Conclusion In most labor negotiations. Then negotiations can resume on the remaining 43 items. 28 50 Practical Negotiation Tactics . thus removing them from the discussion table.
One day. which turned out to be only a few blocks from his own house. Prepare carefully. time of day. as he left the supermarket. Bob followed the man home. and do your homework. he saw an elderly man get in his dream car and drive away. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. (For the next three years. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. he noticed a FOR SALE sign in the yard. Would you possibly be interested in selling it? No. That’s a generous offer. say. Bob made it a point about once a month to go out of his way and drive by the man’s house.000? No. thanks. my name is Bob Hillard. It was nice meeting you. but money doesn’t mean anything to me at this point in my life … Well. As the man got out of his car. and general circumstances under which negotiations take place can substantially impact the outcome. I live a few blocks from here.) 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. on Briarwood Road. just out of curiosity.Tactic 6: Timing Is Everything The exact month. I love this car—restored it myself. $12. One day. day. He stopped and knocked on the door. Not even for.
and I promise to take good care of it. Can I see it? Sure. I can’t take it with me. for tax reasons. I’ll see you on Monday. the proposal would die at midnight. as a matter of fact. Follow me. The partner organization. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. I’m moving to California to live with my daughter. A majority was needed to pass the partnership agreement. so I guess I will be selling it. Well. 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. if a seventh vote could not be found by the pro-agreement side. had issued a deadline of December 31st.m. and the vote was a 6-6 tie each time. that’s a fair price. resulted in another 6-6 30 50 Practical Negotiation Tactics .000. A third vote at 3:00 p. December 31st. Then it’s a deal? Yes. (after a careful inspection) It’s a very nice car! I’ll give you $12. to seal the agreement at the courthouse? Sure.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. The board members had met twice before. Can you come back on Monday at 10:00 a. beyond which the project would have to be abandoned. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams.m. Example 2 It was Sunday. Conclusion While Bob did not achieve his goal during his first negotiation effort.
Both sides caucused: The leaders on each side met to negotiate a compromise. That effort failed.m. At 5:30 p. the project had been stalled by 6–6 votes. The measure passed 6–5 at 5:45 p. When the meeting resumed at 4:00 p.m..deadlock.m. He planned for it accordingly. during an hour break in the meeting.. in the end. and it worked. timing was everything. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. Then. 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. as predicted. the pro-project leader told his members to filibuster until he gave a signal and called for another vote..m. Preparation 31 . a member of the anti-project group left the room.. A member of the pro-project group quickly called for a vote after the leader gave a signal. and the meeting was adjourned. For weeks. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.
This page intentionally left blank .
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. or one-time-only. A neutral. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. Tactic #33 (Bluff). decide whether the negotiations should be continuous. After you have evaluated these factors. but in practice it will likely influence the whole process. 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 . If you prefer to take a firm and direct approach. Tactic #12: Find Common Interests can be helpful. 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 well as their bargaining history and financial and political positions. Some of the tactics listed in this book are only suitable for single-session negotiations. such as a buyer and a seller or a city and its union. and Tactic #48 (Walk Away). Before you can do this. In some cases. cooperative manner. for example. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). 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. For example. The overall strategy chosen does not limit the use of other tactics. Third parties sometimes have their own hidden agendas.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. Are there any outside people who might influence the process. such as a third-party negotiator. Be sure you are aware of this at the beginning. might step in and help settle negotiations between a union and administration negotiators. as it can substantially alter the negotiations between two primary parties. if you want to begin in a friendly. uncaring approach (Tactic #9: Control Your Emotions. you must first evaluate your needs and those of your opponent. Tactic #43 (Nickel and Diming).
but the inside was a complete turnoff. The buyer said he wasn’t interested. His teenage sons had “trashed” the house. By assuming opposing roles. If there is a significant weakness in your position. For example. let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. with “All right. 34 50 Practical Negotiation Tactics . I offer half the asking price. The desperate owner agreed. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness).” The agent took the offer to the seller. the seller’s agent called the buyer about the property. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). The agent explained that the seller was desperate. “Please make any offer—they are motivated!” The buyer responded. and the buyer was able to completely renovate the house and still have a great deal. Weeks later. half-serious. The buyer loved the location.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. two people on the team will be more successful because they evoke different emotions from the other side.
your request must not be so low that the other party concludes that you are not negotiating in good faith. Planning a Strategy 35 . one buyer shows some interest. Finally. but quite frankly. After all. but the house has increased in value. as well.000. If you consider the demand ridiculous. We also think that the neighborhood has improved over the last few years. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Carol: Maybe not. and then look at the demand from your opponent’s perspective. with no success. The market hasn’t gone up that much in six years. It’s a good neighborhood. Carol: We really want to sell. You are not likely to get more than you request. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.000. And I don’t see a lot of difference in the neighborhood. However. six years ago you bought it for $60. we think $160. Buyer: We really like the house. Buyer: The air conditioning might have increased the value of the house. it is likely that your opponent will. She has had it on and off the market for the last five years.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. so think this through well ahead of time.000. but certainly not exceptional in any way. but not so high as to end the negotiations before they begin. Each time. Your demand should be high enough to give you room to compromise. Carol wants $160. so do not underestimate what you might be able to achieve. Be realistic. Surely there’s some flexibility in your asking price. but the redecorating is of little value. First.000 is very high. and just refuses to reduce it. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. but we simply can’t take less than $160. Anyone buying the house would want to change wall colors or add new carpets.
Here’s how the initial negotiations went: Partners: Well.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. The partners are interested in selling the name. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. 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. When Carol refused to budge. we are certainly interested in your request to “buy” our firm name to use in your city. were still alive. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. the buyer took it as a signal that either Carol didn’t want to sell.000? Carol: We really can’t take less than $160. The other law firm was prepared to pay $100. Example 2 The law firm of Bits & Bites was a Sioux City institution. Inquiries to other law firms were not very helpful because in almost all of the instances. Neither Edward Bits nor Edmund Bites.000. 36 50 Practical Negotiation Tactics . In any event. 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. and then $10. as to how you think the name is going to benefit you.Buyer: What if we offered you $100. enjoying a statewide reputation for quality representation. the founders of the firm.000 immediately.000 offer by coming down in price at least a little. though. but they have no idea what the value of their firm’s name might be in this nearby city. We’re curious. or she has unreal expectations. Carol drove off a potential buyer by setting an asking price that was just too high.
And we. expect to pay for that. So. of course. And even though you don’t have an office in our city. that you anticipate to build a very profitable law firm. one of these two attorneys carries the surname of the firm they are leaving. Yes. In every instance. (surprised) Well. Well. because we were not even close to that number. we reserve the right to withdraw our permission. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . If at any time we feel that you have “harmed” our name. then. it would be impossible to create a new name out of the names of our key partners. I’m kind of embarrassed now. We should assume. We weren’t really thinking about that amount of money. we want $500. but we get to keep all of the money we’ve received up to that point. we do. (concerned about loosing the opportunity) Wait. and then 10% of your profits each year for as long as you use the name. Using the Bits & Bites name can only enhance our profitability.000 initially. What number were you thinking about? Well. Give us some range. because you are in the state capital and your firm has handled a lot of high-profile political cases. Thanks so much for meeting with me. I guess this is just not something we’ll be able to pursue. We probably won’t be insulted. that is a very high number. that’s just our initial figure.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. To offer it now would be an insult. I really don’t feel comfortable doing that now. starting with the ten partners you describe. Let’s just pretend this didn’t happen. you have a very solid reputation there.
Both parties were probably at a disadvantage. because there was no “objective” criteria available to help them set a reasonable price.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. The price they were willing to pay would have indicated what the naming rights were worth. Bits and Bites should have let the prospective firm make the first offer. Either side could have asked for too much. 38 50 Practical Negotiation Tactics . rather than negotiate. It immediately dropped the idea. since they had initiated the contact.
I want to keep those. since they are sitting out in the driveway with it. Peggy. Andy and Paula. Andy: No.200.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Peggy: Planning a Strategy 39 . angry. They cost about $300. we won’t need it at the new condo. And take the leaf-catcher attachment and the gas can. so I’ll take it. etc. I can use them. (bad guy) and implies that his or her side will hold firm on their demands. Peggy: I assumed they went with the mower. Peggy: So. while another acts difficult. Peggy: I’m hearing one thing from Paula and another from Andy. Andy: No. you’re really moving! I hate to see you leave.400 if the catcher and can are included. I heard that you want to sell your riding mower. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. Example 1 So.200! We should get $1. Half what it cost us new. not for $1. Andy and Paula: Yes. I’ll go home and you can call me if you two can reach an agreement. Paula: Go ahead and ride it home. what’s your price? Andy: $1. Peggy: That’s fair. Andy: I want them… Paula: Go ahead and take them. threatening. only three years ago. and I know how you take care of things. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. I don’t know what the deal is now.
200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. Let’s talk. Sandy: What? First of all. Sandy. and your training programs. perhaps even unintentionally. And we need to add a clause that holds your company responsible for machine damages. Miguel: I’ve figured $4. 40 50 Practical Negotiation Tactics . Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). You are located outside our primary service area. Miguel: But not at this ridiculous rate.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. causing our reps to spend hours on the road. And cut the training hours from 55 to 20. And we want to change the 24-hour service response time to 48 hours. we’ve been fairly happy with your responsiveness. Sandy. For the past three years. Miguel: Well. Liz: But we still want to renew your contract. firm offer if they decided to continue negotiations. we’re here to negotiate a new service agreement. your account has taken too much time. She realized that it put her in an impossible negotiating position.000 per month is one of the highest in town. We estimated that it has cost us more than $50. the quality of the technicians’ work.000 in service calls last year alone because your damn people don’t take care of the equipment. your rate of $3. She very wisely recognized the routine and forced Andy and Paula to give her a clear.
with a position he knew was unreasonable. but Miguel’s right. these terms will put me out of business—I’m a small 20-person operation. Sandy. Planning a Strategy 41 .m. Liz. Any luck. Sandy. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. I hope you can meet my terms. Sandy. I’m afraid our relationship is over. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. I’ll stop back about 2:00 p. If not. (Three hours later) I’m back. you two? Good news. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. I’ll explain on the way back to the office. even though it was far above the previous contract. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Miguel! We’ve worked out a deal I think you can live with. Our customer base has grown. I’m going on to lunch. I want to keep you as a customer.
Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. It seems that the rate you are charging me on my home phone is $1. because we have had a sick relative out of town and we used long distance a lot this past month. I have a problem with my recent bill and my billing rate. 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. in fact.00 a minute. but I recently was sold a $. This will put you at a distinct disadvantage from this point on. Your opponent might conclude that they have made a serious misjudgment and want to make a conciliatory move to get you back to the bargaining table. made some very good purchase decisions for his small business. 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. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. So. I noticed this. He had. 42 50 Practical Negotiation Tactics . 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. How may I help you? Hello. and might even harden your opponent into an unfavorable position (for you or for both of you). The fault was partly his because he did not stay on top of changes.Tactic 9: Control Your Emotions Stay cool. 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.10 a minute rate at my office location. he was very unhappy.
we certainly would have discussed your options. It hasn’t been increased at any time. of course it is not always possible to give existing customers some of the “offers” we have out. Well. I see that the rate you are being charged is the rate we offer for the type of service you have with us. I would have known I was paying too much. and I also realize that if I had examined my bill closely. Mike. But I am able to offer you a $. I realize that that might be the rate I started paying when I first took your service over eight years ago.I expected the bill to be higher than usual. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 .10 per minute rate on your long-distance service. to begin now. Had you brought this to our attention before. Customer representative: Let me pull up your account. I would think you would have given me the best rate you offer new customers. (beginning to sound irritated. but this was quite a shock. But as a very good customer of yours. how would anyone who might only have residential service even know to ask? Well. 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.
He was walking a thin line. a long-time customer of your company. which should rightly be $50. either. however. Wait—I’ll get my supervisor. (with a much angrier tone) Madam. But I’m looking at a $500 longdistance bill.Mike: I would imagine so. and I want to speak to someone in authority so I can terminate my service. I am. don’t think this is directed at you personally. I would hope that you would credit my account for this better rate for past service. We certainly don’t want to lose you as a customer. controlled voice) I need to talk to someone who can do it immediately. In doing so. but I am very angry with Over-the-Air Company. 44 50 Practical Negotiation Tactics . strategic anger and abusive behavior. 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 $. Mike’s willingness to show a measured “flare of temper” brought results. she kept Mike as a residential customer as well as a business customer. there’s no reason for this conversation to continue. The best we can do is fix the rate for the future. I … (interrupting and in a stern. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. between controlled.10 per minute. after all. If you can’t get me someone to talk to. The latter would not have produced the desired results. but I can’t do that. and I should be treated with more respect! I’m sorry.
They will be putting the plant AND their fellow workers at risk by not being here. lesssenior employees might be at greater risk of injury because they have to handle explosives. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. that’s just not fair. The owner told the employees that he was worried that during the overtime shifts. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. they would become dissatisfied with their pay and want their base pay increased. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. and it’s not what we’re even talking about. I’ve got to have the employees with the most experience to protect this place. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . On those overtime shifts. Owner: Now. and it’s getting old. and you just can’t be too careful.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. and that they should be asking for a fairer base wage for the work they do for you. 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. Working with fireworks is working with explosives. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. The employees’ negotiator finally decided to use “indignation” to break the stalemate.
46 50 Practical Negotiation Tactics . That’s all. After the employees’ negotiator threatened to walk out.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. or they’re not. sit down. though. the negotiator would have had to find a way back into the negotiations without losing ground. (He begins to walk out. But the fireworks business is a business that involves risk. The end result was that the most-senior employees did win the right to refuse overtime. or they’re not. don’t be so hasty. Sit down. You are not addressing the real issue for you: money. What if we were to agree that the senior employees could refuse half of the overtime offered to them. Then you can’t have it both ways. now. The safety of the plant demands it! (standing up to leave) This is just ridiculous. In practice. The negotiator was also running a risk with his flare of temper. but not all? Conclusion The owner was on shaky ground with this one. either the employees are properly trained. No one who takes a job with us can be unaware of that. Had the owner let him leave. But we protect our people. All I’m saying is that the most-senior employees have to be on the overtime shifts. he became more reasonable. Either they are properly protected. most of them continued to take all the overtime they could get. Until you’re ready to talk about that.) Now. I’m not coming back. not at all.
Mike. you’re the oldest. since this one is in perfect shape and it was Mother’s. a well-known negotiations professor from Harvard University. Susan. called the “Reciprocal Buy-Sell Offer. A fourth option. All the rest of the estate has been divided among the family. However.” is the recommendation of Howard Raiffa. I’ll give you 48 hours to decide the price. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). Mike: Mary Anne. 2) They can flip a coin. I’m willing to pay or let it go for $800. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. the executor of the estate. with winner taking all. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. so you set a price at which you agree to buy or sell the coffee grinder. Both sisters covet it. Planning a Strategy 47 . or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object.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. with the highest bidder paying the amount to the other side in compensation for their loss. The first party decides on a price for which he or she will either buy or sell the object to the second party. 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. and split the proceeds. Then Susan. 3) They can agree to sell the object to a third party. (two days later) Mary Anne: Well. The second party then decides to either buy it at that price and pay the first party.
and then decide how much more “emotional value” it held. Thanks for making this last step as easy as possible. in writing. Here is my check for $800. Two business partners had been working together for ten years to build a successful business. Both sisters felt that the process enabled them to resolve the issue fairly. Both came to Raiffa to help negotiate a settlement. 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. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder.Susan: Mike: Well. I choose to buy it. to submit a sealed offer to buy/sell the business sixty days from today. I suggest a slight modification to the process. which will bind us to the outcome. They thus were able to determine the highest price each was willing to pay for it or receive for it. You will both agree. (sixty days later) 48 50 Practical Negotiation Tactics . but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). After I open the bids. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. They accepted his suggestion to use the “reciprocal buy-sell strategy. I’ll pick it up tonight. Lectures on Negotiation Analysis.” Howard: Since in this case you are talking about a multi-million-dollar business.
and we close by July 1st. Bobby was willing to pay more than Abe to remain sole owner. Planning a Strategy 49 .Howard: Abe: Bobby: Abe. but only if they could become the sole owner. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. I will arrange to sell him my half-interest for $180 million. Conclusion Both parties wanted to keep the business. Agreed. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. Abe. Bobby. and both men had carefully estimated the market value of half the business. your bid is $190 million. and to close within ninety days. And I will arrange financing to pay you $180 million to become sole owner. your bid is $170 million. you agree to sell your half-interest to Bobby for $180 million.
When he showed his wife the detailed spreadsheet. It can also work in reverse: establishing the other person as the expert. he decided upon a strategy: First establish himself as the “dimension expert. and created a spreadsheet to compare the five best-rated couches on their list. He thus ended up having greater negotiating power. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. the one he wanted (one of the least-expensive) was superior. When it came to comfort.” but there were substantial differences in price—differences that the wife did not see as a problem. They both expressed an interest in finding a couch that offered the most “interior” space. This approach can also be reversed: The wife in this situation is a banker. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . the one that was the most expensive was superior.” and then argue for the frugal alternative. Based on seating capacity. she glanced at it and immediately deferred to his opinion. 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. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. The couple decided to limit their selection to those rated “excellent. and the husband felt like he saved them hundreds of dollars. The husband found the dimensions of the couches in the brochures and Web sites. Looking at these statistics. and forcing him or her to control the discussion of the issue. This strategy worked.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. Conclusion The husband became the “expert” in this situation by doing the homework.
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.” If you spend many hours learning about Health Maintenance Organizations (HMOs). and should therefore handle the problem. 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. 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. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . Preferred Provider Organizations (PPOs). he argues that she is the expert.
and then asked their mom for a chance to negotiate with each other. That simply rewards your continual squabbling. she made them share whatever it was. The two boys fought over the last piece of everything. and neither boy was very happy. and so on. Usually. The boys quickly huddled. you both want to complete negotiations by a certain date. I also took out the garbage last week without being asked twice. This time. you want to reach an agreement that is favorable to an outside party. When they boys returned. neither of you want to be embarrassed at the outcome. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some.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. Be clear on what you have in common at the start. These positive things are part of your goals and objectives. Example 1 When Russ and Bill got home from school. They immediately began to fight over it. If this was chocolate icing. particularly when things seem to be at a standstill. and their mother was tired of it. like we usually have. here’s what they said to her: I think I should be rewarded with the piece of cake. the last piece of cake will get thrown away. they saw that there was one piece of cake left over from their mom’s bridge party. I missed dessert the other night because I had to get to baseball practice. Unless you can convince me otherwise. I wouldn’t care so much. Russ: 52 50 Practical Negotiation Tactics . and I really love the banana/butternut/ sour cream frosting on this cake. she decided to try something different. because I am so conscientious about my paper route. point them out at the very beginning of negotiations and refer to them throughout the process.
and better than a fast-food restaurant with late-night hours and a drive-through window. Residents: Marilyn.m. and keeps it open longer so she can attract customers on their way to and from work. It was the type of shop the nearby residents preferred. your new shop hours have caused your customers to park in our parking spaces.m. One day. I can have the part with the icing and Bill can have the part with the cake and filling. 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. Planning a Strategy 53 . I helped with the bags without being asked twice. Customers have started to park in nearby apartment lots. so that your customers can park on the street. and her children were in school. We really want you to go back to your original times. to 3:00 p. she got a visit from some of the residents. That sounds like a wonderful solution. and that’s not my favorite either.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 I really like white cake. because there is no parking along the street during morning and evening rush hours.m. Marilyn originally set her shop’s hours for 10:00 a. We realized that if we cut the cake lengthwise. The last cake we had was chocolate cake. 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. Now that her children are in college. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. she opens her shop at 7:30 a. so these hours worked out well. This cake is white cake.
Do you? Marilyn: No.m. The parking lot used for apartment residents is probably full from 7:30– 9.m.m. Can’t you post signs that tell non-residents not to park in the lots? Residents: The problem is that for the signs to be very effective. I have to convince them to come before work. Identifying their shared interests caused the nearby residents and the customers to reach agreement. we have to be willing to tow the cars that violate it. and 6:00 p. But I really am increasing my sales by being open longer hours. It is very costly to have cars towed.m. 54 50 Practical Negotiation Tactics .m. I really need that extra income to stay in business. and the residents needed Marilyn’s shop. and 9:00 a. and 9:00 a.. rather than after work.I’m sorry this is happening. and I close at 4:00 p.m. then we’ll try and accommodate you. let’s see what the options are. Marilyn: Conclusion Marilyn needed the extra parking. If you need to have the shop open more hours.m. Lets try it.. and see if it works.m. and between 4:00 p.? Residents: We certainly want you to stay in business here. my customers can’t park on the street..00 a.m. We think they’ll be agreeable to the morning parking. Okay. But in order to keep my new customers.m. if I go ahead and open the shop at 7:30 a. Most of our residents are gone by 8:00 a. if residents haven’t left for work yet. the off-street lots probably won’t be used by my customers. The shared parking arrangement did work out for Marilyn. And we don’t think you want your customers’ cars towed. 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. I don’t think that would be very good for business. and is probably empty in the afternoon if they haven’t gotten home yet. and usually the car is gone by the time a tow truck shows up anyway. Between 7:30 a. So. or so anyway.
etc. I don’t. Example 1 Four adult children have gathered at the home of their recently deceased mother. Well. one at a time: the youngest.m. how should we go about dividing up the furniture and possessions? I can’t talk about it.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. We just don’t have the time … We’ve got to do this—the house is sold! Okay. A deadline can help you make the best possible agreement in the shortest amount of time. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. 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). and start choosing things. A few hours? I can’t—I’ve got to leave shortly for the drive home. But at Planning a Strategy 55 . let’s all take a few hours to look around. let’s all take two hours to look around and make a list of things we might want. That will take days! I haven’t been in this house for twelve years. How can I do that? You all live in this town and you know this house. 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. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. Then we can sit down at this table at 3:00 p. we can each take turns selecting things … Like each tool or dish. Well. the first.
then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. All of us must come back before Saturday to take what is ours—agreed? Okay. 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. However.m. Example 2 Allan: As the negotiating team for the city. this is December 29. we all leave. being the oldest. 56 50 Practical Negotiation Tactics . David: I understand your concern. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. if I cannot carry a negotiated and signed deal to my board by noon on December 31. Agreed. your attorneys know the tax laws.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. can sell or give away what is left. Allan: Let me confer with the city attorneys. and I appreciate your interest in the historic structure. And besides. Okay. Sue. December 31. if we are not finished.
Planning a Strategy 57 . we can’t get the reports we wanted in 48 hours. Obviously.Allan: (One hour later.) I understand the December 31 deadline. 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. and I don’t like it. Let’s continue.
and Jason knows he is getting a D in Spanish. There will be times during a negotiation when you will want to catch your opponent off-guard. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. and we used it a couple of times. and I missed some assignments. Mom: What’s that? Jason: A few weeks ago I lost my workbook. Did you buy it? Jason: Yes. Unfortunately. don’t get mad. I’ll need to buy it again. first-quarter grades are coming out at the end of the week. Now. so he was able to prevail upon her to let him continue.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. One day mine disappeared. We had one at the beginning of the semester that we were using pretty often. He decided to preempt the discussion in order to make the best deal. Jason: Mom. as well as those of the other side. But don’t lose it again. but that was actually a different workbook. and you can neutralize its effect on the negotiations. before your opponent tries to catch you off-guard. Then the teacher went back to the first one. The objective is to negotiate from a position of strength. His mother disapproves of his study habits. I bought the second one. but his grades are good. I’ll give you money for it. and this usually means having all the right information. as well as strengths. Mom: All right. but I have a problem in my Spanish class. He knows that a D will mean that he will have to change the way he studies. but remember that both sides have weaknesses. while watching TV. Mom: I gave you money to buy a workbook a few weeks ago. 58 50 Practical Negotiation Tactics . Control the use of the information. Have a clear goal in mind AND all the information you need to make your points. we need to talk. and one of the ways to do that is to reveal a weakness at the beginning.
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. Pizza Boy was interested and had even made inquiries about the property. Mom: Well. His explanation made sense. B. she trusted it more. Although his Spanish grade was only a C+. Example 2 Jane once owned a piece of property she wanted very much to sell. Mom. Environmental Science. And I know I have to be better about getting in all of my assignments. English. and the D is directly related to my losing the book. Obviously. Jason: Spanish is just one class. Conclusion All of Jason’s grades did improve over the next quarter.Jason: Another thing. Its owners found out that at least three other buyers had been in contact with Jane. and since he offered her the information up front. I’ll give you more time. or borderline B.(maybe C+). then I’ll agree to make changes. he was able to continue to study the way he wanted to. If I don’t pull the D up to a C or better. The work I did turn in was fine. my study habits are okay. But that Spanish grade needs to come up to a B!! Jason: Okay. but all three deals Planning a Strategy 59 . And those are hard classes—Algebra. but I think you do need to change your study habits. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. All of my other classes are A. I don’t think you’re taking your schoolwork seriously enough. all right. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. It’s because I didn’t have the book. Since I missed some assignments. Mom: Well. so there’s no reason to think I need to change my study habits. Thanks. I think I can do that. I’m sorry. The location was ideal for a convenience store or a fast-food restaurant.
What are her grounds for complaining? Jane: She doesn’t have any. she will want you to think it’s the whole neighborhood. and it’s zoned for commercial use. we’re not interested in neighborhood fights. When she contacts you. When the neighbor heard about the new buyer. This is how the negotiations went: Jane: Pizza Boy. let’s assume that you are right. it’s only the neighbor to the right of the property who has a problem. there were no unpleasant surprises to stop the deal. Jane: Oh. The real problem. Pizza Boy: Well. They decided not to fight a disgruntled neighbor. Pizza Boy: We’ve checked the property out. Pizza Boy: Well. But unlike your company. however. however. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. really. Furthermore. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property.had fallen through. though. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. Pizza Boy was prepared for her call. A tentative deal was signed. 60 50 Practical Negotiation Tactics . and was able to politely ignore her. I’m very happy you’re interested in my property. since they were well aware of the negatives. the other interested buyers already have businesses in the neighborhood. You are a big enough corporation to withstand her objections. I’m sure. What are you asking for the property? Conclusion Jane told them her asking price. either. I think you’ll find that this is only one person. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. I know. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. Actually. she started her campaign to keep them from closing the deal. which was way below the price they were actually willing to pay.
None is as important as the first one.000) Target Point ($23. The negotiator firmly states that it is their best offer in an attempt to gain a nice.000 Buyer Initial Offer ($21.750) Target Point ($24. quick agreement. 190–192.000 22 23 24 25 26 27 Initial Offer $28. by Michael R. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). for example.500) Resistance Point ($25. This is a practical starting point that will not anger the other side (and might even be expected). The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Adapted from Labor Relations and Collective Bargaining. 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. 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. Exchanging Initial Offers 61 .750–$25. Carrell and Christina Heavrin.500) M $21. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party.000) Settlement Range ($22. 2: Distributive Bargaining Process. (2004).500) Fig. “Distributive” bargaining (“win-lose” or “zero sum”) is used. as illustrated in the following figure: Seller Resistance Point ($22.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. Another common strategy is to start with the status quo. such as proposing to continue at the current rate or price.
the other side does not agree to this value). include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. See Tactic #18: Agree on Something As Soon As You Can.000. each initial offer ($21. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). and is the range in which most negotiations actually occur. When the two parties agree to a price within the range.000) is reasonable. 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). the process quickly narrows to the range between the initial offers. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. 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. 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. After initial offers are exchanged. these points have set the outer limits.000 and $28. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. 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).” but the settlement price.In this example. In the example. it is termed the settlement point – not the “right price” or “fair price. thus starting out on a positive note. The settlement range is the distance between the resistance points. 62 50 Practical Negotiation Tactics . thus producing a true “win-win” negotiation. A target point is the desired settlement value a party has set as a goal when negotiations begin. if the buyer’s initial offer was $25. usually.
You can invite up to 20 of your friends. make use of the opportunity to call for a caucus. Her mom and dad had already talked about it privately. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. Example 1 Shelly’s “Sweet Sixteen” party was coming up. so we’ll have the party from 7:00 p. because it might disturb the neighbors.m. There are many ways to use this strategy. 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. without revealing their ideas to the other side. or if a member takes on a role in the negotiations that has not been assigned to them. If negotiations seem stalled.–10:00 p. Shelly. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. We’ll just have chips and soda. We don’t want it to be a late evening. the negotiations got out of hand when Shelly’s dad forgot what had been decided. A caucus gives you an opportunity to work out problems with your own team in private. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. If the team is feeling pressure to concede on certain items. Unfortunately. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. a caucus can be used as a break to calm the situation down. If the negotiations have suddenly gone in an unanticipated direction. Mom: We’re planning on having your party here on Saturday night.Tactic 15: Caucus If you are part of a negotiating team. and I already have 25 names. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. and presumably had an agreement. so her parents sat down with their daughter to discuss the details.m. If the negotiations are heated.
(shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. and then the number of kids won’t matter. Dad. Mom! This is my “Sweet Sixteen” party. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. And midnight is definitely too late. (with some irritation) I’m not sure. (During the caucus. In fact. I think the band would be fine. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. we could rent the VFW hall.Dad: Mom: Dad: Shelly: Mom: Shelly: Mom: Shelly: Dad: Mom: Dad: Shelly: Dad: Mom: on the friends I’ve made over the summer at the pool. We could play records and you guys could dance. alone. we need to talk. That sounds like too many for here at the house. Time out! Dad. I guess the VFW will work. I think we can handle a few more kids—how about 35? And midnight sounds okay. (excited) That would be so cool. We’ll get a band—everyone does. we’ll call you when we’re ready.” They would never expect a party to end before midnight. Oh. Actually. Shelly. It’s special!!! Well. Jerry from down the street is in a really good band that all of the crowd likes.—that’s so “baby. Your dad and I already talked about this and agreed that 20 guests would be the limit. And they can’t go home at 10:00 p. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics .m. I’m sure we can ask them to tone it down a little. That would be great! It would keep everyone entertained. okay.
But you are limited to 40. we will be better able to chaperone. and we will need to approve the list. her mom presented the revised proposal.m. and you can invite more friends. Dad. but no Sweet Sixteen birthday party decorations. Okay. All right. this mom-and-dad negotiating team became unglued during the negotiations. please!! 11:00 p. When they called Shelly back in. causing them to lose control and make compromises they hadn’t intended to make. but your dad and I agree on getting a DJ to play. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. to 11:00 p. midnight. Example 2 The contract negotiations between the company and the union had been going on for days. But we can have the band.) Okay. and not a huge production.m. can’t we? No band. That’s so lame. Does that mean no presents. That way.m. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. is for little kids!! No. but we’ll schedule the party for 8:00 p. Agreed. A DJ? I guess that’s okay. sorry.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 .m. And we’re serving chips and sodas. we’re going to rent the VFW hall. Your mom and I agree—11:00 p. too? No way!! I want presents!! Conclusion In spite of their prior planning.
Tuition in place of health insurances? They’ll think I’ve lost my mind. Union: (angrily) I’m not presenting this proposal to my people. Union negotiator #2: Please—just a moment outside. some attempt to undermine me with my members? Company: I don’t know what you’re so worked up about—we’re willing to spend the same amount of money!! Union negotiator #2: Can we take a break? Union: We don’t need a break—we’re not discussing this stupid proposal. The union’s lead negotiator misunderstood the proposal. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. A lot of employees have spouses who can get health insurance coverage through their work.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. and the following conversation occurred. The tuition benefits will encourage the workers to be prepared for new job opportunities. 66 50 Practical Negotiation Tactics . The company’s negotiator didn’t recognize the misunderstanding. With the cost of college educations so high. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. it’s a good proposal. many will want to use it for their children’s education. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. What is this. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No.
Good.) I’m sorry. Exchanging Initial Offers 67 . let’s move on. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. the parties returned to the room. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. and the parties were able to complete their negotiations. I thought that the contract would cover one or the other for everyone. and I apologize for explaining it poorly. I think that what you’re proposing is a really good idea. Negotiator #1 regained his footing. we’ll be back in 5 minutes. Now.Union: Union: Company: Okay.
I know.” Party B thinks that A has sacrificed one important objective to gain another. this conversation takes place: Hobbs: Yes. Mr.” Throwaway items are those things that hold little or no value to you. A has gained something of true value and given up nothing he values in return. and noticed that none of the vehicles have a green exterior. It is a useful tactic in any negotiations. He doesn’t really care about the color of the new vehicle. when the two sides are only a few dollars apart. 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. Salesman: Let me talk to my manager. At a point late in the negotiations. But for this price. not revealing that the item exchanged is a “throwaway. I’ll go get him. according to my figures. you don’t want your opponent to know what these things are. quickly checked the dealer’s inventory of sport utility vehicles in stock. but he makes a mental note to use color as a “throwaway” item. it’s a great car and a fair deal. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . we’ve got expenses and we need to make some profit. but in reality. Salesman: Well. according to the Consumer Reports listing of the cost of the vehicle. Example 1 The buyer.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. Hobbs: Yes. However. but … Salesman: But what? Hobbs: Well. so be sure you present them in a way that suggests importance. Hobbs. Here’s how it works: Party A exchanges the item for something of true value. you are making $200 profit over the true dealer’s cost. I can go to another dealer and get a green exterior—the color I like best.
. Conclusion Mr. 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. Then we have a deal. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). and seniority will be used to determine who gets to choose the first day. Example 2 The office supervisor told the three internal sales representatives (Jenny. The three are sitting at a lunch table to discuss the schedule.. and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I ..Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Hobbs successfully chose color as a throwaway item. At the very end of the negotiations. The days in question are: Exchanging Initial Offers 69 . I’ll take the red one for $100 less.no it’s not. The manager was convinced enough to sacrifice a final $100 for the throwaway. All three employees must agree to the schedule. Employees will be paid time-and-a half for each of these days.
January 2 None of the three are totally happy with the results. She got what she wanted by giving up something she did not value: the two other days. This would allow Jenny and Miguel to each work only two days. They all agreed to their schedules. 24.November 25 (the day after Thanksgiving) December 23. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. 30. 70 50 Practical Negotiation Tactics . A second and third round produced the following allocation: Jenny: December 23. She would actually prefer to work the extra days and get paid time-and-a half. 31 January 1. December 26. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. in exchange for giving up earlier choices due to seniority. 2 In the first round of negotiation. 30. and each chooses their days to work: Carolyn: December 27. 27. 31. but that is a secondary consideration. 2 Jenny: December 23. each made a first choice of days they will work. January 1. 26. January 1 Carolyn: December 24. December 30. She proposes to work five days. December 31 Miguel: November 25. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. 26 Miguel: November 25. They have decided to start over. They agree. if they let her choose the two days she will be off and the five days she will work. December 27.
they met at the house. The house was closed up at the time of their mother’s death because she had been in a nursing facility for a couple of months. and the stock and distribute the proceeds. can indicate that something you think is minor is really a major concern to your opponent. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. but I’d like to talk about the house and the furniture. Example 1 When their mother died at age 82. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate.000 with no mortgage on it. were faced with the task of selling the house and disposing of their mom’s personal belongings. For example. realizing that the total cost of a deal might make or break the agreement. In addition. their mom left specific pieces of jewelry and art in the will to each of the girls. the antiques. a house valued at $250. it is often helpful to package the items in distinct groups and then deal with each package separately. A reluctance to include one particular financial item with other financial issues. and a collection of antique furniture. The house and much of the furniture has been in the Exchanging Initial Offers 71 . Anne and her sisters.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. When the girls decided it was time to talk about the estate.000. Anne: As I see it. three ways. The process of grouping items can be an educational exercise because the response to one party’s suggested packaging of items might reveal how the other party views the various items on the table. along with the cash. one might package all of the financial issues in one group and negotiate on that package as one issue. Autumn and Angela. The estate’s assets included a checking and savings account totaling $450. we need to sell the house. 300 shares of stock in a pharmaceutical company. for example.
we can sell ours. Soon. Angela: I live close by. so I will be able to keep tabs on it. and use it to fix the house up? Then when we make a decision.000 in the bank and distribute the remainder three ways. Angela: Now’s not a good time to sell either the stock or the house and antiques. we’d get a lot more for them. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. I’d like it all to stay in the family. she’s free to do so. Why don’t we leave some of the cash in the bank. Frankly. With no one living here. Autumn: I think its awfully soon to be making these kinds of decisions. we’ll discuss again what happens to the house and the antiques. There was a reason why she gave us what she did.family for years. Autumn: Sounds good to me. In fact. I’d like to talk about the art works Mom left each of us. If we want. and letting everything else wait for another discussion. And we’ll fix the house up. Anne: Okay. We’ll split the stock three ways. So we agree: We’ll leave $30. If Angela wants to hold on to her stock. but the operative word is “give. and if we wait a couple of years. and now that we have them. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . it’s a magnet for vandals. It’s a buyer’s market now. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us. Anne: But that means we have to continue to take care of the house and its contents. What would you think about agreeing today to distribute the cash and stock three ways. we will have a more valuable asset.” She gave those things to us. Mother was born here and grew up here. I’d really be interested in talking a trade for some of them. don’t you think? Angela: Maybe. we’re really free to do with them what we want.
funeral. The negotiations on the other items—the house. and the art works—will be more difficult. health benefits. May I suggest that we divide the items into three areas. the jewelry. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). Employees: We’ve got a lot of items to cover. etc. Several issues also needed to be addressed: the ability of employees to move up through the organization. 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. the antiques. tuition benefits. The third: Ben- Exchanging Initial Offers 73 . Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. Anne: Same with me.). sick. Angela: That’s fine. The second: working conditions (work schedules and promotional opportunities). and establishing a work schedule to accommodate evening and weekend clients. what kind of paid leaves there will be (personal. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. The following tasks needed to be a accomplished: establishing basic pay schedules. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. including benefits for partners in non-traditional relationships. vacation. but I’m making no commitment to trade. and the assignment of the limited number of parking spaces.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk.
and the parking spaces). because they’re really an incentive for better performance. but the parties were able to come to agreement because the wage issue had been resolved. So I’d like to see us get through the wage issues quickly and then move on. Employees: Okay. Executive Director: I think it’s a good idea to group items together. we are an agency supported generally by public funding. Executive Director: Sounds like a good agenda. to be honest with you. the paid leave categories are pretty clearly defined. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules.efits (health insurance. 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. 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. tuition benefits. Also. that makes sense. 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. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. I would include that under the Working Conditions category. Later negotiations were difficult. 74 50 Practical Negotiation Tactics . but I’d change your list. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. I think it also makes sense to include tuition benefits in the Working Conditions category. Wages should not include merit pay raises. Executive Director: Well. paid leave times. as well.
They have no children. You can also make an effort to agree on something your opponent offers early in the negotiations. Kathy was asked by her employer to relocate to another city. Now. The couple hoped to do the divorce without involving lawyers in order to save money. and she agreed. Kathy borrowed more money to go to graduate school full-time. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. The discussion might become very heated. Tim: You might be leaving town. Kathy’s first job paid more than Tim’s because she had a graduate degree. with her promotion sending her out of town. rather than disposing of assets. An initial agreement. Their “property division” was mostly about dividing their debts. no matter how insignificant. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. Exchanging Initial Offers 75 . They met and married in college. It indicates to your opponent that you are a reasonable negotiator. Tim worried that he would be stuck with all of the debt. and both have good jobs. sets the stage for mutual respect and communication. too.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. Tim began working right after graduation. after a brief marriage. without suggesting any changes or modifications. They were in the middle of buying a house. It was her idea to buy the house and go into debt to furnish it. You signed those papers. and that you are entering into the negotiations with the intent to reach agreement. They had also furnished their house on credit. are divorcing. Example 1 Tim and Kathy. because Tim felt that Kathy had taken advantage of him during the marriage. and might not even be able to keep the house.
Example 2 ABC Company. 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.. Kathy: Now. I don’t intend to “stick” you with anything. Tim: Well. I can hardly argue with that. I think that makes sense. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. hold on. yes. Okay. an art gallery.Kathy: Hey. as long as the cost was approximately the same. a wholesale art dealer. Frankly. The monthly payments are about the same. Tim: Okay. They also agreed that Tim wouldn’t have to pay her that amount for five years. as you remember. and you got your sports car. 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. we would have paid down our school loans more. What do you want to do about them? Conclusion Having agreed to two items very quickly. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. I got my convertible. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. When we bought them two years ago. and XYZ Co. and he could pay it in annual installments over a five-year period. I think it only fair that I take over repayment of all the school loans. Kathy: I suppose we should look at the school loans next. about the house and furnishings. If both of us had been working the year I went to graduate school.
The artworks filled four boxes. Unfortunately. XYZ’s manager failed to open the boxes or remove the artworks. You can get the three new artworks here so that we can hold the sale as scheduled? Yes.to ship artwork. They arrived right before the holiday weekend began. There was no indication that the gallery’s electricity had gone out over the weekend. when the boxes were opened on Monday. but only if you let us ship it UPS. ABC: Before we begin. XYZ contacted ABC immediately. 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. it was obvious that the art in one of the boxes had suffered considerable water damage. XYZ: ABC: Exchanging Initial Offers 77 . and the boxes showed no external damage. and arrived on time and apparently in good condition. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. XYZ decided to cancel the promotional sale that was to start on Wednesday. or else the box was damaged in XYZ’s warehouse. We’ll expect you to pay for the 12 works that will be in your show. and began preparing to return all of the artwork to ABC. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. However. and put the company on notice that it was not going to accept the order because the planned sale needed a dozen works of art to make it profitable. and we will continue to discuss who is liable for the three water-damaged works. The other times this happened. ABC’s position was that the artwork was fine when it left their location. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. ABC refused to pay WeCanShipArt until it received payment from XYZ.
the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. we’re ruined. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. If we don’t make the deadline. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. You can’t just ignore us.m. Having reached an amiable solution to the immediate problem. and if word gets out that you think it was. They also agreed that if the investigations are not conclusive.XYZ: Agreed. that’s okay with me if it’s okay with XYZ. The artwork was not damaged while in our control. I can’t see how I can refuse that. And we’ll eat the cost of shipping. regardless of where the original three artworks were damaged. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. ABC: Well. generated a like offer from WeCanShipArt and a reasonable response from XYZ. WeCanShipArt: Wait a minute. at its financial risk. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. Now. 78 50 Practical Negotiation Tactics . they will split the cost of the three damaged pieces three ways. XYZ: Okay.
period. and it came with the bush hog and the leaf pick-up. 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. What do you want for it? Colleen: Well. I don’t want to quibble. Example 1 Colleen: Ann. I know you and Jeff said you’d like one because you have about five acres.000 for it six years ago. Ann: Thanks! We really need one. no hard feelings either way. we plan on selling our Ford tractor when we move. You must mean what you say and be prepared to walk away from an unacceptable offer. but if you’re interested. Okay? No quibbling. Jeff spends many hours mowing the yard every 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. Ann: That sounds great! I don’t want this to affect our friendship. consider using the “First and Best” tactic. Why don’t you give me a price? Colleen: Oh. We plan to put an ad in the paper next week. we paid $5. The “first and best” tactic enabled them to settle the matter easily. I don’t have any idea. Exchanging Initial Offers 79 . we’ll sell it to you. and even more hours in the fall picking up leaves. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. Ann: Well. 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’ll get back to you in three days. but we have internal budget considerations and we must consider equity with other employees. and I’ll take 48 hours to consider it. on this slip of paper. I don’t like negotiating over salary either. I came up with the best salary offer I can make. I expect a fair increase. I think we have agreed to all aspects of the job offer. Archie: Thanks. We want you. except salary. Conclusion Archie accepted the job offer. how about you making your first salary offer your best one. (three days later) Vernon: Archie. So. I want the job. 80 50 Practical Negotiation Tactics . Here it is. I’ll discuss it with my wife and get back to you in 48 hours. and you know my current salary. He also started the job with a positive working relationship with Vernon. I’ll either accept it or reject it. no questions asked.Example 2 Archie: Well. who admired the way Archie negotiated his starting salary. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. as we agreed. but I don’t want to start off in a new job by negotiating with my boss! So. Okay? Vernon: That sounds good.
you will probably have to modify some of your positions if you are to reach agreement. and in a favorable light. was dating a senior.m. He knew his parents would not agree to let him stay out all night. 17 years old and a junior in high school. I’m the only junior in the crowd. Kevin had “negotiated” with his parents before. Third. you only have one Senior Prom in your life.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. a 4:00 a.m. Present your position and demands as if yours is the only logical position. Example 1 Kevin. we’re not going to be dating exclusively after this summer. so the prom is a pretty big deal to both of us. and then to breakfast at “Timothy’s. you know that Sally is really looking forward to this. This is called posturing—presenting your position strongly and completely. and we’ve made a lot of plans with our friends that I need to talk to you about. Posturing is indeed “acting. Fourth. we’re all meeting at Donna’s so we can share a limousine. but he figured “all night” was relative. (Once negotiations get underway. Sally’s Senior Prom is coming up. It might be your only opportunity to explain your position without interruption.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. First we’re going to dinner. curfew would be okay. Exchanging Initial Offers 81 . He and his date had decided that as long as they could join their friends for breakfast after the prom.) During the posturing phase. look for indications from your opponent as to what he or she believes is their best position. First. and ignore or deny any weaknesses in it. 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.” As you know. since Sally is going away to college next year. then the prom. Kevin: Mom and Dad. so he knew that he would have to sell them very quickly. Second.
I believe you can pay a little more and have the limousine bring you both home. happy about your plans to use a limousine so you kids aren’t driving. but it should not be oversold.m. Finally. From where we sit. And. we told you that we would not be changing our rules to accommodate that older group. and we’re just not happy about that. of course. you and Sally need to call it a night (or really a morning). and the crowd we hang with doesn’t either. We are. We’re just not convinced that your entire group has been alcohol. So. the limousine will take us back to Donna’s house to spend the night. We’ve heard that they allow kids to drink. That’s asking us to believe a lot. We think that after the breakfast. which could be dangerous.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. 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. 82 50 Practical Negotiation Tactics . Sally’s parents trust us and have already said yes to her. Donna’s parents are not as strict as they could be when a bunch of you are there. for sure. Also. Second. I’ve never missed my curfew. Donna’s parents will be there. we’ll have to get in our car and drive home very early in the morning. they will be open for the Prom crowd only. Yes. yes. You realize that this could be as late as 4:00 a. I don’t drink or do drugs.or drug-free. we know. so there will be plenty of chaperoning. However. but to use that as a reason to stay overnight doesn’t make sense. this prom is a one-night thing—a dance that is dressier than you’re used to. You make some good points. That’s the deal then? Okay. Fifth. I think I ought to be able to stay out all night. I know you trust me and that I’ve earned the trust. And if we don’t spend the night. but because the owner’s daughter goes to Sally’s school. you have been fairly good about making your curfew—most of the time. Things can happen on a night like that that adversely affect you for the rest of your life. remember that when you started dating Sally and hanging out with an older crowd.
Tencro is not going to leave the state. our Exchanging Initial Offers 83 .Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. Tencro has approached the state’s Office for Business Incentives to see what. and it does not really need any help. If we can expand here. We need to find out what you’re willing to do to keep us here. The spin-off business from our operations is huge. the state can do to help the company expand and rebuild. and had this conversation: Tencro: We really want to keep our company here and expand it. we are one of the largest employers in this county. but was disappointed to learn that they offer very few incentives. Also. if anything. Tencro approached the state’s Economic Development Officer. we’d be adding at least 500 new jobs. but there are limited options available. other companies have received incentives and Tencro certainly wants all it can get. but it could easily add another 500 if it had the space on its assembly line. EDO: Well. It currently employs 800 people. The assembly plant is out-of-date. The company approached other states to see what incentives they might offer Tencro to locate in their state. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. because his parents could not disagree with such wellthought-out ideas. With 800 employees. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. and a new. Example 2 Tencro Company decided to modernize and expand its business. we’re of course interested in keeping you here.m. but we’re getting a lot of interest from other states willing to help us relocate. Nevertheless. Tencro: Let me just remind you of what our company means to this state. regardless of the incentives. one-floor operation would be very profitable.
while we value your company as a long-time corporate citizen. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. We need a rebate on the local income taxes to help pay off the loan to build our new building. There are more residents in the state demanding more public services: road improvements. paying taxes. That might involve the state building housing for them at a reduced cost and providing them with some retraining. now that the economy has improved. EDO: Well. And we’ve been offered land practically free in the neighboring state. 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 certain incentives. We can’t possibly give it away to other companies coming in behind them. etc. We do want you to expand your plant. and we’ve had to divert funds from business incentive programs over to basic services. Also. EDO: The state has very limited resources to pay for economic development incentives. schools. we will need the two-lane entrance expanded to four lanes. or else it will not be cost-effective for us to stay here. if the new location is at the local industrial park. and traffic signals. And. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. so we’d have to have it free here. We need help in the cost of attracting and training the new 500 employees. We 84 50 Practical Negotiation Tactics . etc.. Just increasing the workforce by 500 will pull new people into the community and cause housing costs to rise—something our citizens on fixed incomes are very much against. and we are willing to offer some training dollars for the new workers.employees pump money into the economy by buying houses and cars. additional police. 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. Certainly.
However. Tencro: Well. but for the fact that each party did its homework and was aware of the true facts. Other than that. the training and the new road improvements were all the incentives offered to Tencro. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. let us go back and take another look at our options. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. The new set-up was so profitable. we’re just not in a position to offer more than that at this time. Future negotiations continued. Exchanging Initial Offers 85 . and hired 500 new employees.agree that the road into the industrial park must be widened and a traffic light installed at our expense. EDO: Get back to us as soon as you can. borrowed money for the new building. Tencro was able to pay off the borrowed money in half the time. Tencro bought land in the industrial park.
is the most (or least) the other side will accept.000.000 two years ago.” (You have won a settlement. but you feel cursed because you gave away too much. think things through before you make or accept the first offer. of course. such as last year’s price. which can be very useful). then $320. or 3) Make an unrealistic offer (i.000—what they paid for it. 2) Start out with an old number. particularly if you don’t know the other party’s “settlement range. 86 50 Practical Negotiation Tactics .” The perfect first offer. thus requiring greater concessions on both sides.000 for a house that sold for $185. The sellers must be willing to come down a few thousand … Sue: Well.000 this year. at minimum cost. offer $150. 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. before someone else does.000 three years ago). Avoid giving away too much at the outset. and that two similar ones on the same street sold for $330. That’s a fair price.000.000 and $337. and you cannot withdraw it in good faith. Their realtor told them that it sold for $290. Jay: No. The other party will probably come back with an equally ridiculous offer. because you have settled quickly. We don’t know how anxious they are to sell or if they know the market. 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. Let’s low-ball them and offer $290. never give them their asking price. Sue: Let’s offer $325. They found one they both like that lists for $325.e.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.000. Jay: No.) To prevent this from happening. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.. and houses in this area sell fast.
was very impressed with their presentation. I can’t tell our realtor $290. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. (the next day …) Jay: They made us a counteroffer of $307. but who knows what they are planning on offering.500—half the difference! Sue: Great.000.000.Sue: Don’t be crazy. That’s an insult! Jay: Well. the sellers obviously would have accepted and Jay and Sue. Lyle Foxworthy. as Sue had first suggested. Frank: Me too. They outlined how they would develop a new employee performance-appraisal system. realizing they offered too much.000 for each of us—$6. since they had already bought another house.000 total. (Bob and Frank meet privately to discuss the situation.) Bob: I’d do it for $3. Both parties felt that they made a good deal. the company president. then let them make a counteroffer. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. 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. they had offered $325. Give us your lowest price. Exchanging Initial Offers 87 . and the offer was based on fact: the prior negotiated price. The buyers were very motivated to sell. as requested by the human resource director. Sue: Then you do it. If.
That is all that’s left in this year’s training budget. We’ll do the job. What’s the cost? Bob: We want the job. I’m out of time. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. and it would not apply.) Lyle: Okay. They also ended up getting three times ($18. but we can’t pay more than $18. 88 50 Practical Negotiation Tactics . Bob: That’s fair.000. but we know you must have an amount budgeted for this and we are willing to do it for that amount.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. Lyle: Okay.000) their minimum price of $6.000. and you two come highly recommended. We’ve waited long enough. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer.
and do not flatly reject it because it is not your offer. do not dismiss it because it is not all you want. carefully evaluate an opponent’s offer. Also. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. Instead. labor negotiators. because if you do not at least appear to be flexible. is likely to pull away from the table. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. the other party. be enlarged (see Tactic #27: Expanding the Pie). which is often the case. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). One or more parts might be acceptable or indicate movement from their previous positions. in fact. but possibly of different values to your opponent. 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. Expect that the “total pie” will be different from what it was at the outset. what appears to be an outer limit of the settlement range when the process starts can. It has often been said that the key to negotiations is to be flexible (see Tactic #25). seeing no common ground.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). When the other party makes an offer. and attorneys use tried and true tactics in giving and receiving offers. which would most likely weaken their position (see Tactic #26: Keeping Secrets). 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. In some negotiation situations. T Making Counteroffers (The “Give and Take”) 89 . Experienced negotiators seldom reveal their exact priorities and objectives. Skilled negotiators such as salespeople.
it looks like we can’t really plan a vacation for all four of us. Jerry will be here. Let’s see what we can work out. He planned on being home for one last week before having to pack up and go back to college. Proposing multiple ways to reach your goal can get you to the same place. Sydney. We have four options. In mid-June. 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. and quicker. 15. Dad: Wait a minute. 19. The week he would be home would be the first week of school for Sydney. 90 50 Practical Negotiation Tactics . 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. Example 1 Jerry. Jerry had already started his summer job. so you can go without me. 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. Here’s the discussion that followed: Mom: Well. Jerry pointed out that he is expected to work until July 31st. except when you’re negotiating. finished his freshman year of high school at the beginning of June.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. Option 2: Mom and I go before Jerry leaves on August 1. what say you. Option 1: No family vacation. His brother Sydney. completed his first year of college and came home for the summer around the middle of May. their parents began discussing a family summer vacation. Dad. gives your opponent little maneuvering room and might even prolong or damage the negotiations. Proposing only one solution to a problem. I don’t want to give up on a family vacation that quickly. while it may be your best option. and that he already made plans to visit with college friends on the East Coast for the two weeks after that.
one paralegal. It’s not perfect. if it’s okay with Jerry. when we come home. 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. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. Sydney: Okay. actually.Option 3: Mom. If we started the vacation on a Thursday. Bob. Andrea considers Making Counteroffers (The “Give and Take”) 91 . Then Jerry joins us until Thursday. you have a half-day orientation on Wednesday. so I won’t be able to meet up with you until Sunday. Jerry: Okay with me. Jerry: My friends and I have plans through Saturday of that week. but he can discharge employees for poor performance. and one secretary in his litigation unit. Classes don’t start until Friday. Conclusion The goal was to have a family vacation. Mom? Mom: Let’s do it. and Carl). we could return home on Thursday and still get a week’s vacation. we meet up with him that week for vacation. Mom: Well. By proposing numerous options. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. And I miss orientation and start school the next day? Dad: That’s an option. but it should work out all right. me. Joe has no say in who was hired by the corporate legal office to work in his unit.
Her job performance was acceptable. In the last month.herself to be a professional. Andrea. isn’t it? But I don’t think just moving you really solves the problem. and I don’t see why we don’t have more independence. Andrea: Well. We have a formal procedure that you just don’t like to follow. you have a job-performance problem. and resents any attempt by Joe to supervise her work. however. It is to the corporation’s benefit to address that problem here and now. I thought I had cleared it with you when I told you what I thought they ought to offer and you said that sounded too good to be true. Andrea: You didn’t list moving to another unit as an option. she made a two glaring errors in judgment. rather than to put it off on someone else or for some time in the future. Andrea: Wait Joe. or you can work out a “supervision” agreement with me so that I can better monitor your performance. 92 50 Practical Negotiation Tactics . 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. It was just a comment. If you don’t like the way I do my job. Joe: That is certainly an option. Before you start. let me say that I’m handling the missed deadline on the pleading. so Joe took a “hands off” approach. The attorney for the other side has agreed to give me the additional time to file it. I really see your options as follows: You can leave the corporation. To put it as bluntly as I can. we have a very big problem. but it doesn’t solve the problem—nor is it the only problem. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. Joe: Come on. Joe: Andrea. Andrea: We’re hired for our expertise. You had no authority to agree to settle the Stites case without clearing it with me. Joe: That’s all well and good. which forced Joe to take action. you know that wasn’t an okay to settle.
the needs of the corporation have to come first. by Leigh Thompson. Andrea: Well. I hope we can work it out. lets talk to Bill about the move. and propose an acceptable alternative. or I would advise your next supervisor to put you on a very formal approval program. rather than my staying here. but it would still require some change in the way you work: either a demotion.) Making Counteroffers (The “Give and Take”) 93 . Andrea’s move and subsequent “approval” regime did. Believe it or not. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. But in fairness to our mutual employer. in fact. my goal is the same is yours: to create an environment where you can perform to your full potential. I want to stay with the firm.Joe: That could be an option. If that option is okay with you. (Adapted from The Mind and The Heart of the Negotiator. then it would save face for me if it comes with a move to another unit. Joe: That’s fine with me. It also changed her attitude about being both a professional and a team player in a corporate office. If you are convinced that I have to undertake an “approval” program. improve her work performance.
the fencing. because it can speed up negotiations and produce a more desirable outcome. 94 50 Practical Negotiation Tactics . This approach is an important tactic. Brooks: Right. that’s $9. then those which can be easily traded. It is used only when each side has several demands. we both want the sod. 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). if a buyer negotiates a $500 reduction of a contractor’s bill. With distributive items. (She looks over the list. three strategies are used. let’s see if there are any items we both want. Let’s agree to those things. Example 1 Brooks and Maureen Wilson have just finished building a new home.) Yes.). or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides.500.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. 3) distributive items (those items for which the two parties have exactly opposite interests. thus making it necessary to find a middle ground on each. Maureen: First. and finally. 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. 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. In essence. They have a fixed amount of money—$14. Exchange.000. one person’s gain is another’s loss—zero-sum. These items often involve money). Let’s see. and a home theatre. etc. then the contractor has lost $500 in revenue. For example. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. Wow! We are off to a good start. 2) exchange items (those that can be easily traded off—one item for another item of equal value.
Making Counteroffers (The “Give and Take”) 95 . that makes sense.000! Brooks: Good.500 $500 $1. Maureen: No.500 left. which I’d like to keep in the bank. and we both get things we want.500 $5. I’d like to spend some of it on lighting upgrades.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. We have $1.000 $5. $750 for lighting and $750 in the bank.000 $1. which takes another $3.200 $200–$2. These are all permanent immediate needs.# 1 Sod Item Cost $1. Can we split it evenly? Brooks: Okay.500 $2.000 $3. I’ll trade your sidewalk and trees for my whirlpool bath.000 $2.000 $500 $1.
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. even in difficult years. Profit-Sharing 5. Wage Increase 4. finally agreeing to split the difference on the remaining amount (distributive items). Pension Increase 3. All items to be negotiated and their desired outcome for each item were put in writing for review. This year. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. During that time. Length of Contract 2. 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). Drug-Testing Program 96 50 Practical Negotiation Tactics . management and union negotiators found that a “winwin” approach to negotiations worked well.Conclusion By taking the time to list all the items each person wanted and their cost estimates. both sides exchanged lists of initial demands at their first meeting. The combined lists total thirteen different items: Desired Outcome No.
the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). signed. Next. Subcontracting 12. Job Security 13. Overtime Assignment 8.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. one Making Counteroffers (The “Give and Take”) 97 . 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. Clothing Allowance Based on senior. (#5) a new drug testing program. Paid Funeral Leave 9. they began to trade off the exchange issues of similar value and nature. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). Finally. and (#9) to continue the often-discussed no strike/no lockout provision. eleven of the thirteen original issues to be negotiated had been agreed to.Distributive rent program co-pay Exchange Exchange 7.6. 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. At this point. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). They proceeded to draft the language to settle these issues. First. No Strike/No Lockout 10. Next. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). the negotiators agreed that they had compatible positions on three items: (#1) length of contract. and removed from the table. Shift Differential 11. Health Insurance Employees pay 20% Continue cur.
or distributive so that the negotiations can begin in an organized manner. 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. Conclusion This tactic is simple. but a middle ground was eventually found on each and negotiations ended. Second. They then identify each as compatible. negotiations begin on a positive “win-win” note. if both parties start from reasonable positions. The tactic offers several advantages: First. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. you can use the process to settle many of the other issues on the table. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. A middle ground often must be found on each of these distributive issues if you are to reach an agreement.side’s gain is the other’s loss. exchange. but it can be very effective when a negotiation situation involves several issues. Third. 98 50 Practical Negotiation Tactics . when you exchange items so that each party achieves their desired outcome on one of the two. when you agree on the items where both parties have similar desired outcomes.
and studies late into the night. last item: I’d like it quiet in the room at night. you know. I’m not interested in a curfew. Since they didn’t know each other well. each side is expected to put an offer on the table. they decided to establish “room rules” so that they would both be comfortable with the room assignment. 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. and from a strategic standpoint. and looks like you are belittling them. so he wants a quiet room late at night. They agreed on which part of the room each would have. Let me finish.Tactic 24: Wait to Counter As the negotiations begin. Jasper: Finish or not. so I can study. The final issue had to do with “lights out” and quiet times for studying. This isn’t high school. do not offer a counterproposal right away. stereo. the location of the TV. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. 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. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. and refrigerator. Waiting a respectful amount of time to counter. and can help you reach your goal. Rob stays busy all day and evening with other activities. even if you aren’t going to accept their offer. Rob: Wait a minute. Rob: Making Counteroffers (The “Give and Take”) 99 . will make your opponent feel good about the process. It is especially important that you do two things: take your time before rejecting any offer from the other side. Here is how the last issue was handled: Okay. Mutual respect must be part of the negotiation process.
Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. 10:30 p.m. Under ABC ‘s contract with the union. the positions of non-union crew leader and floor manager would both be eliminated. and d) a hearing with company owner if the matter is not resolved in 20 days.) Listen. Jasper: Midnight. midnight during the week is the only thing I’ll consider. No agreement was reached. Under the restructuring. Rob: (there is no hesitation in this voice) No. and the union foreman would report directly to the plant manager. b) written complaint to a floor manager if the matter is not resolved in 5 days. and that’s it. I want a 10:30 p. The union contract required that management renegotiate this change in the grievance procedure with the union. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. Jasper: (without taking a breath) At best. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days.m. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. curfew on TV and other noise every night. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics .Rob: (Rob was about to suggest midnight on Mondays through Thursdays. The appeals procedure would have to be altered to reflect the restructuring. and that’s not negotiable. but changed his mind when he saw Jasper’s attitude. is all I’ll consider.
rather than go on to appeal it to the company owner. the employee and the foreman would meet with the plant manager and attempt to resolve it. We’d like you to consider the plant manager’s role as a problem-solver. he/she can take the grievance to the plant owner for a hearing. 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.any objection to the change. If in 20 days he/she has not been satisfied. Company: Here’s the new draft of the grievance procedure. ABC Company’s negotiator explained the management changes soon to be implemented. rather than as a judge on the merits of the grievance. Union: Hold on. because those management layers are gone. In fact. Company: (rather abruptly) Let’s not drag this out. Company: (no hesitating) Trust me. We’ve simply eliminated the first two steps. We just cut out two steps. Union: You obviously didn’t come here to negotiate. no one can complain about that. but to dictate. our grievances often signal to management that there are real problems on the shop floor. The redraft is simple and straightforward. this redraft is a very simple change to the contract. We’ve got a couple of alternative models for you to consider. 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. After initial pleasantries were exchanged. and everything else stays the same. (Note: An attitude change sets in. and began the negotiation session concerning the grievance procedure. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. Union: As you know. Certainly. and I’m certain your members will be okay with it. The union was prepared to accept the plant manager’s position as final. An aggrieved employee can make a request for a meeting with the plant manager. If the union foreman felt that the grievance had merit.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 .
We’ll see you on the picket line. rather than in the 35 days the current system provides. the company entertained the ideas the union had tried to propose before. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. 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. and we’ll strike if we have to.two-step grievance procedure instead of a four-step procedure. You can’t be serious. the two parties did meet again. 102 50 Practical Negotiation Tactics . Union: We’re very serious. This time. After a cooling off period. and actually accepted a three-step procedure.
Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. They flipped a coin to see who “got” them and the new baby this year. and identified the range of options they feel comfortable with negotiating. Sue’s sister Nancy called her to talk her into coming anyway. established goals.m. 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). and do not dismiss something said by your opponent just because it came from the opponent. The couple used to have Thanksgiving dinner at both families’ homes. and ten nieces and nephews) always ate around 5:00 p. two brothers. and we’re really not able to enjoy either one. Mom says you. Making Counteroffers (The “Give and Take”) 103 . and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Bill. and at least five aunts and uncles) ate around 7:00 p. Sue’s family (parents. two sisters. and now have a new baby girl. Bill’s family (parents. If you are flexible. Even before the baby’s arrival. we’ll get to our side. Nancy: Sue.m. their spouses. Example 1 Sue and Bill have been married four years. you can adjust your demands or goals to include such new ideas.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Be open minded. 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). and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. But after the negotiation gets started. one sister. four brothers. Next year. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. it’s just too much to do both. Bill’s family won. They’ve done the research. Sue: Yes.
Thanksgiving is Thursday. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. the holiday will be over. When that goal looked out of reach. By being flexible. and it became the family’s new tradition. Nancy: If we keep the time at 5:00 p. but she won’t tell you. I bet everyone could make it on Friday. I thought of asking Mom if she could move dinner up to noon or so. Sue: I don’t know. Nancy: I’ll let you know. Bill won the coin toss for this year.Nancy: It just won’t be right without you guys. some people have to work on the Friday after Thanksgiving. Mom’s very upset. but then I realized that the rest of you already go to your in-laws earlier in the day. either. I know that I would rather not do two Thanksgiving dinners on Thursday. we’ll come to Mom’s. Isn’t that what Thanksgiving is about—taking a day to give thanks for our blessings with the people we love? We’ll just arrange it so we do it two days in a row! Sue: Well. she suggested a unique alternative. 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.. Sue: Next year. So that doesn’t work. 104 50 Practical Negotiation Tactics . 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. I mean.m. Celebrating the next day seems odd. There’s nothing “special” about Friday. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. Nancy: We’d make it special by all of us being together.
and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . Each year. Kids’ Home hoped to get $500.5 million is available for distribution to numerous charities. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. Unfortunately (for Kids’ Home). We’re hoping to get a commitment from them to build and help fund the operations of a new facility. They are meeting with the city to ask that the land be donated by the city for the project. 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: As you know. City: Can’t you borrow the money from a bank to build the facility. a non-profit organization for orphaned children. Kids’ Home: That’s why we brought the foundation’s officials with us. the interest income of around $6. City officals: We can probably give you the land for free. We need the city’s help by allowing us to get the city land donated to us (for free). the foundation’s regular annual grants come to roughly half of their available funds. The foundation has a substantial endowment fund.Example 2 Kids’ Home. depending on the cost of the land. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. Estimates for building a new orphan home ranged from $12–$15 million. we’re committed in theory. we hope to break ground early next year for the new orphan home. We only have maybe $2 million a year to put toward this charity. but the principal of the fund can’t be touched. but we can’t fund all of the $12 or $15 million.000 a year for operations. Foundation officals: Oh. but we need some assurance that you will be able to build and operate the orphan home at that location.
Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations.Kids’ Home: Borrowing the money gets very expensive. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. We’re a nonprofit group. it could end up costing double that amount. We’ve never committed our funds to pay back a bank loan. We wouldn’t want to make such a commitment to a bank. 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 really taxes our ability to raise funds. We’re not familiar with that program. If we borrowed $15 million at 10% interest. but we’re willing to look at it. 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. 106 50 Practical Negotiation Tactics . I’ll contact the state tomorrow. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. We probably would not be able to participate.
it is not acceptable to lie. and asked the officers to cite the Jones kids for parking too close to a corner. The Jones family suspected that the Smiths called the police. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. Mr. you might not want to reveal all of your priorities at first.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. They asked to meet with the Smiths to talk about these disagreements. The Smiths called the police to complain about a late-night party. the neighbors began to have problems.m. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. and often lasted until 2:00 or 3:00 a. However. and we would very much like to talk about how we can resolve these issues. the Smiths could count on parking their car directly in front of their house. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. each side has to know generally what each other wants to accomplish. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. Jones: We’ve obviously gotten off on the wrong foot. At the same time. Example 1 Soon after the Jones family moved in next door to the Smiths. These parties could get rather loud. But the Jones clan had four cars altogether. In order for a negotiation to be successful. yet not reveal all of your goals and objectives. and trust can only be established if all parties interact truthfully. Making Counteroffers (The “Give and Take”) 107 . Mr. Before the Jones family moved into the neighborhood. Smith: We don’t know what you’re talking about. It is perfectly acceptable to say that you are not ready to reveal certain things. and often took up all the space along the street in front of the two houses. Successful negotiations depend on trust.
And the music is to be off at midnight. Smith: Yes. if they are outside. but we do know that someone has complained. that wasn’t us. we’re good now? Mr.) 108 50 Practical Negotiation Tactics . Smith: No. In spite of the Smiths’ assurances. Jones: I wish you had mentioned that the last time we talked. we would like to work out some solution. Jones: Okay. Jones came to see what the problem was. we thought you might have called the police about our kids’ party and our cars. since you’ve asked. Jones: We’ve already talked to the girls about the parties. Muffin. Mr. Mr. we’d like to be able to park our car in front of our house. At our age. Mr. It is really very disturbing. Smith: Well. Also. they’re hitting baseballs into our yard. and they won’t be having friends over more than one night a weekend from now on. and not in the back yard. I guess. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Almost every day. Jones: Well. they kept it. Is that everything now? Mr. I’ll talk to the boys and we’ll make sure they play baseball in the park. 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. Smith: You know that your boys are causing our dog.Mr. a lot of problems. yes. the late-night parties are a problem. Smith: Well. fine. we have a problem walking long distances in bad weather. Mr. (A week later. the next time the boys were out playing and the ball came into the Smiths’ yard. Mr. and was met with the following: Mr. In good weather. So. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. And we’ll make sure none of our cars are parked in front of your house.
Making Counteroffers (The “Give and Take”) 109 . you’ve said that before.Mr. Why didn’t you tell us? We can’t read what’s on your mind! Mr.S. the British firm will walk away from the deal. We would have fixed the tree if you had asked. The Jones’ effort to sit down and negotiate the problems with the Smiths were thwarted by the Smiths’ reluctance to put all of their concerns on the table and their failure to admit that they were the ones who made the formal complaints. Mr. have labor unions. or European companies do. But we didn’t call the inspector. Jones: Sure. The union knows that the company is up for sale. Japanese companies often do not “recognize” labor unions the same way U. irate) I can’t believe you people called an inspector on us. the tree was clearly over the fence. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Example 2 Neno Enterprises is a shipping company with extensive global operations. because they didn’t like a grievance decision. Smith: Well. Union officials are afraid that a Japanese company might purchase it. Unless Neno can get the Union members back to work on Monday.S. but Neno cannot tell the union this. or the deal is off. You obviously don’t want to be “good neighbors. Jones: (at the Smiths’ door. You could have seen that yourself. Neno’s president and the Union representative met to discuss the walkout. although none of the facilities outside the U. Neno has been negotiating the sale of its business to a British company. and the deal is close to being final. The British insist that a very strict confidentiality provision be part of the negotiating process. Its local headquarters has a union to handle its international shipping.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. The union laborers walked off the job on Friday.
Union: What aren’t you telling me? A labor shutdown. this is a legal strike under the contract. do you? Union: No. and if the guys are back on Monday. We’ve not had a labor shutdown in 20 years. so the union won’t be hurt by the buyout. I’ll forget all about the strike. You don’t want to mess up our negotiations. maybe by next Friday or the week after that we’ll have our guys back to work. Neno: Look. We can’t put up with the kind of decision we got on our grievance. 110 50 Practical Negotiation Tactics . we don’t. Our guys are prepared to stay out a lot longer than Monday. any interruption in our shipping could affect how these buyers look at our business. I need your guys to come back to work on Monday. Neno: Look. You really don’t want to do that. Union: We think that the grievance decision affects our wages. we will resolve it to your satisfaction by the end of the day. no harm-no foul. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. But I have to have everyone back on Monday. But if your guys are out past Sunday. If that’s going to have a bad effect on your being able to sell the business. 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. Have the guys back on Monday. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. We’ll meet with all of the parties on the grievance first thing Monday. I know it’s not news to you that this business is up for sale. I think it already has. I’m certain that if we can sit down and talk next week. whether it’s for one weekend or a week. I can’t really be more explicit than that at this time. Therefore. it will impact our marketability. It’s not the time to have one. then there’s probably no harm done. I promise you. If they do come back. If everyone is back on Monday. is still a labor shutdown. And one company that is interested has a really good track record on expanding the businesses they buy. Neno: All I’m saying is that there is a difference.
If I could. I’m going to go along with you because you’ve always dealt straight with me. Neno called the union negotiator in and briefed him on the sale. Union: Okay. but the British firm will allow them to organize at their foreign locations. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. Can you assure me of that? Neno: Yes. I can. But I can’t. and it’s that important to you as well. I would be more specific. Making Counteroffers (The “Give and Take”) 111 . as well. rather than make up reasons. the sale was finalized. we’ll be back to work on Monday. Union: Okay. Conclusion On Monday. He told him that it would mean that the union would not only keep its jobs here. while the grievance was being resolved. the union was willing to trust Neno—even though he couldn’t tell them everything.Union: It’s that important to you? Neno: Yes. But I need to tell my guys that this is important to them as well. was the right decision to make. Because the parties had dealt honestly with each other in the past.
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
(long pause) Felipe: Let me give you three options: A. keeping her Saturday free. or C. Felipe: Sorry. I’m not going back to him again to discuss this program. I’ll approve $15. I’ll do it now. But when her mother laid out the schedule and gave her alternatives. I can accept B. Felipe: Well. Example 2 Roberto: I can’t properly advertise this new program with a $5.000. Roberto: But it will never generate enough interest if no one knows about it. I’ll find a way to do without one part-time person. Amber resisted the chore she hated. but I will cut your staff by one part-time person (or $15. and clean it. but I will cut your travel budget out completely.000 in the budget. or we lose a whole year.000).000 for advertising. I have three hours.Amber: row before your basketball game. Roberto: But I need to start the direct mail and newspaper ads within two weeks. Three. Clean it after your game. but no TV or anything until it’s done! (pause) Okay. she chose the one she most preferred. Conclusion At first. Roberto: Well. I’ll approve $15. B. Felipe: (Roberto’s supervisor) Sorry. Use the $5. but the company president does not share your optimism on this program. Take it or leave it. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics .000 for advertising.000 budget! I need at least $20. that is enough time. I can’t help.
” He offered Roberto three alternatives of equal cost. thus achieving his goal of not having to ask for a larger budget. One alternative. Roberto believed.Conclusion Felipe was willing to think “outside the box. which was his goal. would enable him to adequately promote the program. Making Counteroffers (The “Give and Take”) 117 .
and 118 50 Practical Negotiation Tactics . he can make an open-ended statement. Susan: Mr. The negotiator for the other side says nothing. Jones. you are a valued employee.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. She was determined to hold her ground for at least a 13% pay increase and a promotion. If his opponent cannot agree to the demand but does not want to end the negotiations. received a glowing report from her boss on her job performance. This should have resulted in an automatic promotion and a sizable pay increase. After a few minutes of silence. but one side comes back with a non-negotiable demand. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. It was 16% less than she had been led to believe she would be getting. nearing her third year with the company. Example 1 Susan. the promotion had not yet been approved. Here’s how the negotiations went. inviting a response. Jones: I certainly do. Susan: I hope so. I have to tell you that while I appreciate what you have done for me. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. I very much appreciated the fair job performance review you gave me. You know my commitment to this company. 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. the negotiator who feels the most uncomfortable with the silence will fill the gap and most likely make a concession in order to get the other party to speak. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. Unfortunately. I think you would agree with me that I have performed well above expectations this past year. 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.
Well. and I’m sure management will agree. If there is some flexibility in your request. I must ask you to try to get both. I could probably find a way to phase it in over a two. Making Counteroffers (The “Give and Take”) 119 . the company’s refusal to grant them now was a harder position to support. (says nothing) Or. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise.or three-year period. Okay? (says nothing) Let me check it out and I’ll get back to you. maybe we can talk about the promotion later in the year. of course I will be glad to do that. Jones to continue to offer solutions. Conclusion Mr. Once he acknowledged that both items might be awarded sometime in the future. I really want you to stay with the company.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. but a pay increase of that size might be more difficult. and sell it to management that way. because I feel my future with the company might be at stake here. Susan’s silence prompted Mr. I suppose I could get the promotion approved with the proper presentation. Promotions of this type are all but automatic around here. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. if management can see their way to giving you the pay increase now. and I think that I really haven’t been dealt with fairly. I would very much appreciate it if you could ask the company to reconsider. it could help. (says nothing) If I can’t get that pay increase approved right now.
the people Madame Mayor currently 120 50 Practical Negotiation Tactics . The parties agreed to continue the previous terms of the agreement. The term of the original agreement was nearing its end. Town Council Representative: I think you’re wrong. The end of the agreement coincided with the election cycle for the two towns. Town Council Chair). but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. Mayor’s representative: No. My bosses might not have been inclined to expand the agreement anyway. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. I don’t think it’s a problem. The mayor. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. Mr. by saying that she might run for Chair. He decided to push for a simple renewal of the original terms. She has not decided what she’s running for. and until she does. This is how the negotiations went: Town Council Representative: Well. and were trying to settle on new and expanded areas when one of the elected officials (Ms.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. her plans really don’t have any bearing on these negotiations. but now they’ve got to ask what Madame Mayor’s motivations are. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. has colored these negotiations. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. Mayor) said that she was considering running for office. Also.
Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. I don’t know what her reaction will be. Making Counteroffers (The “Give and Take”) 121 . Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. I’ll go back and tell Madame Mayor your position. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. and the agreement was renewed with no new provisions. the Town Council representative’s position prevailed. Conclusion By remaining silent. In the end. He either had to end the session or figure out what to say to reengage the other side.represents have to worry that her desire to switch governments might taint the negotiations. I hate not to attempt to add some additional areas to the agreement. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. Mayor’s representative: Well. the Town Council’s representative left the mayor’s representative with no room to maneuver.
Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. Neighbor: Well. which an upstream neighbor had built. 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. the brook and rock barrier are on my property. She discovered that a rock barrier. Obviously. had redirected the brook further into her property. she noticed that the brook came within 100 yards of it. The brook 122 50 Practical Negotiation Tactics . I have a problem. in a small clearing. or we will be at an impasse. after the gazebo had been there for about five months. 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.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Joe. You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. Madeline built a gazebo about 500 yards from the brook. Madeline: Hi. Having an iron-clad demand probably won’t give you enough room to reach an agreement. It calls for compromise. and began to renovate it as a home and a pottery shop. “I have to have this. Example 1 Madeline bought an old farmhouse outside of a small town. One day. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. You will have to remove the rock barrier. The reason I built it was so that I could protect my patio. The property came with three acres of forest alongside a meandering brook. when one of you might say. the brook was the property line separating her property from a neighboring farm. As was sometimes the case in these parts. She traced the brook back along its course to see why and where it had changed its path. Madeline.
what I need is to protect my property line and my gazebo. which enabled her to achieve her goals. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. I understand that. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. Neighbor: I’m sorry. and allow the neighbor to protect his home. she widened her range of options. and allowed me to have a survey done so that my deed can be corrected to describe the “existing brook” boundary line by other landmarks. It might not be necessary to make such a dramatic change. restore her property line. you have not only threatened my gazebo. but you’ve changed the boundary line of my property. Madeline: Well. Madeline: But by diverting the brook. Also. at least I’ve maintained my property line. My neighbor on the adjacent farm wants to sell part of his property for a housing development. She left room for a compromise. but I don’t know what I can do about it. Madeline was able to protect her gazebo. Neighbor: I can do both of these things. Then. Madeline: Yes. I couldn’t have that. I can’t have the brook in my house. and return everything as it was. I won’t remove the rock barrier.extended right up to my back door when the rain was heavy. This will put these houses right next to me. By expanding the range of options available to resolve the dispute. I’ve lost 400 yards of property on my three acres. if the brook is redirected. 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. Making Counteroffers (The “Give and Take”) 123 . When she found out that this was not going to solve her neighbor’s problem. What if you removed the barrier for a short time.
000.000. the airline paid a total of $200. With long-term planning and investments. we know that health insurance premiums might skyrocket. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. what they really need is for you to cover the costs of dependent coverage. The pilots want dependent coverage paid for by the company. as it has always been. dependent coverage could cost us $1.000 (which we reasonably should have expected to pay in premiums) in the pension account now.000. However.000 a year over the next five years? Company: Yes. But only a few of our people are close to retirement age. And we cannot afford that $1. and the premiums for health care just keep going up. The company wants to trade paying for dependent coverage for better pension benefits. and we know that with this new contract term of five years. The projections for the next five years were that these costs would increase to about $1.000 figure. and are willing to keep pension benefits the same.000. This is just a cash-flow problem that your members have to understand.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000 to cover the premiums for dependent coverage. Over the last five years. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000.000. 124 50 Practical Negotiation Tactics . Everyone was afraid that the dispute would cause an impasse and a possible strike. If we invest the $200.000. you are taking a risk on the costs increasing. Company: This could not come at a worst time for us. As best as we can tell. Over the next five years. Pilots: Look. that would be the minimum increase. then the pension benefits overall will increase by $10. The airline industry is in a slump. This would be a better benefit in the long run. with all wage and operations issues resolved fairly early. the company can make your pensions much better.
that would be worth it. The dependent coverage is more important to us now than the pension benefits. The $200.000 available. the company will not be expected to give us this benefit. then those funds will not be available to invest in the pension plan. with a cap of $200. we are. can we agree to a year-to-year agreement on dependent coverage.000 to either pay one year of the premiums. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. Company: If the company spends the $200. if they were that high. The health insurance market stabilized.000? Once the cap is met.Pilots: But you do have the $200. however. so the decision to be flexible was a good one. by agreeing to let the company cap its exposure for dependent health coverage. Conclusion The company was committed to limiting its exposure to $200. Making Counteroffers (The “Give and Take”) 125 . Company: Then it’s okay with us. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. If we can get two or even three years out of the $200.000 actually carried them through four years.000 the first year on the premiums. It initially believed that the only option was to put that money into pension benefits. and the pilots knew what to ask for when the contract expired. or invest in the pension plan? Company: Yes.000. The pilots expanded the range of options.
” “affordable weekly payments. $45. Saleswoman: I’ll be right back. I recall the day you drove it out of here. Example 1 Car buyer: What. it’s a deal? 126 50 Practical Negotiation Tactics . if I can give you this car with a $300 monthly payment. what monthly payment did you have in mind? Buyer: More like $300 per month. be sure to add up the total cost.… (20 minutes later) Saleswoman: So. Buyer: Yes. Saleswoman: With your 740 in trade.” 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. and compare it to your strategic objective.000 car. do you want to look at something else? Buyer: No. I guess it would be around $600 per month.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. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. I love this car.000 for a Volvo? I bought the one I’m driving for $19. If you are on the receiving end of such a tactic.500! Saleswoman: Yes.” and “low monthly rates” are examples of the salami tactic. I just can’t imagine the monthly payment on a $45. but that was several years ago. Buyer: Way too much! Saleswoman: Well. Phrases such as “for only pennies a day.
I can’t discuss another client’s account.” she had him—she worked around the $300 slices. do you want Disney? Yes. I can’t afford that much.” She decided to cut the $45. You can do that. and payout slices to reach the total price she wanted.Buyer: I don’t see how you can do that. Great! So. down payment. Making Counteroffers (The “Give and Take”) 127 .00 per month for your service. Instead of a three-year lease. But my neighbor pays $39.00 per month. I can afford $6. Once the buyer volunteered that $300 was an affordable “slice.000 down. with your car and $6. can’t you? Buyer: Yes.00 per month. but let me see the numbers. it will be a five-year lease. (looks at the numbers) That looks good.000 price into “slices” the buyer thought reasonable. do you want HBO? How much? $5.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. and added the trade-in. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. Sure. Saleswoman: Simple. Let’s see. you can get the Disney channel for only $5. as promised. but what else must I buy? Only the basic service for $8.99 per month.
128 50 Practical Negotiation Tactics . 3. Great. 2. we had that before. Conclusion The owner thought his neighbor’s service at $39. Yeah.00 a month. That’s another $5. But that’s all! Then we’ll hook you up on Monday. Okay. That’s $5.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. they asked about the Cartoon Network. instead of one total amount. 2? How much? $8. Any other kids’ channels? Yes. I really want the sports channels. and SI 1. Thanks.00 per month was far too much.00 per month.00! Why? Because he judged the per-slice price to be reasonable.99 per month. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00. Disney is for the kids! The sports channels are for me. What about the music package? Yes. and my wife wants the old movies. The total is $38. but he agreed to six “salami slices” for a total of $38.
It should be used with caution: It can end negotiations immediately. the traditional car salesperson might tell the buyer. In some cases. When both sides believe that each has equally strong positions. “I can only guarantee this price until 6:00 p. angry negotiations. turned off by the tactic. but others will walk out the door. pressure tactics should probably be avoided. and the use of humor. which can be successful if the opposing team has two or more members who hold different views of an issue. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). and it can destroy your credibility. today. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. but it can be used effectively when one party clearly has an edge. so are you ready to make a deal? This might convince a few buyers. Applying Pressure 129 . Humor might not look like pressure. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. it is effective. Tactic #33 (The Bluff) is a classic pressure tactic. however. 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.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. 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). For example. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. but in tense.m.
Such exaggerations are easily revealed or uncovered. Lacey.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. in fact. I think Chloe and I would be willing to pay more than just the money you guys put into it. and we’ll be moving south in the next month or so. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. Your opponent will consider you untrustworthy and might even be insulted by your attitude. together and separately. and we need to talk to you about how we can buy you guys out. 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. big news! I’ve been promoted. We’d hate to give it up. Lacey: Don. getting a divorce and each moving away (and would have no more use for the sailboat). Chloe and I would like to take the sailboat with us. Lacey: I know. The two couples used the sailboat a lot the first couple of years. and they will weaken your credibility. When Lacey found out that his employer was transferring him to another city farther down the coast. boat prices have really gone up. Abby really loves that boat. Although I do think there ought to be some consideration for the two years you had use of the boat. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. he and Chloe wanted to buy out Don’s and Abby’s interest. It 130 50 Practical Negotiation Tactics . Don and Abby now use it less and less. but it is not a good idea to exaggerate what you are offering or what you are giving up. And we don’t want to be unfair. I don’t know. Don: Wow. Don: Absolutely. Lacey and Chloe didn’t know that Don and Abby were. but Don.
big news!! Don got his promotion. he likely would have found himself in a stronger negotiating position. though it’s not so happy. and we’re moving farther south. Don: Lacey. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. Abby: Well. I’m sorry.is just about the most important thing we own. Lacey and Don’s negotiations changed considerably. After all. Don. I’ve been thinking. Chloe: Oh. Lacey: Cut it out. Abby: That boat. I was afraid something was going on when you all-butstopped joining us on the boat. I thought you understood how important this boat is to Abby. Don and I are getting a divorce. Let me talk to her. Applying Pressure 131 . It’s about time now for some major investment.) Lacey: Don. I have big news too. We’ll be leaving here for the Midwest. (Around the same time. and neither of us put much in for upkeep. the boat has depreciated. which you would have to share if you want to retain half-ownership. and I’ll get back to you. 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. I’ll be glad never to see it again. Abby is having this conversation with Chloe) Chloe: Abby. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. but separately. (After Lacey and Chloe had a chance to talk. Abby told Chloe about the divorce and about how she never wants to see the boat again. I’m surprised by your attitude. It just reminds me of how happy Don and I used to be.
I can’t see how today’s numbers really impact the long-term profitability of this company.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. in this global market. but this has been such a crazy situation. I’ll be going back to them as soon as next week. the situation in the stock market is not good. I’m telling you the stock price is having a huge impact on us already. Here’s how these negotiations went: Company president: Well. The current stock price is the lowest it has ever been. our production line changes at least three times a year. we will need to make drastic cuts in our operating costs just to survive. the company president decided to use the stock price as a negotiating tool during the current union contract talks. And as you know. And while these fluctuations have little to do with the health of the company itself. in fact. I think you’ll have to agree with me that wage increases in this next contract will not be available. I’ll have to show them 132 50 Practical Negotiation Tactics . Union negotiator: The stock price might be down right now. Company president: Well. I’m afraid that with this current information. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. 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. and that the economy is strong. I read in the papers every day that the market is still strong. I’ll be looking to you to make some major wage concessions on this upcoming contract. they will make their decision based on a review of the stock price that day.
let’s talk about it. Let’s get back together next week.) Union negotiator: I’m sorry. we’d like to reopen talks on next year’s pay increase. So. here’s what happened. Give me your proposal for wage concessions. When negotiations resumed. Union negotiator: I know that’s what you told me. Applying Pressure 133 . They told union officials that it would be very rare for a bank to make its decision solely on stock price. the union checked into the Letter of Credit transaction with some experts in banking. they would do a thorough analysis and look at the health of the company over the long haul. We think this company is very healthy and can withstand the temporary downturn. (In the interim. The union became hardened in its position that the employees needed wage increases in the new contract.that we’ve cut expenses to counter the losses in the stock market. Union negotiator: Well. If you put it that way. Company president: All right. Conclusion Because the company’s president over-emphasized the impact of the market on the company. okay. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. and the union ended up with a substantial increase in their contract. and I’ll have our people look at it. he lost the trust of the union. but your proposal to cut wages is just not going to fly. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. When the market took a swing up during the negotiations. but I checked it out and it’s not totally true. the company’s position was weakened even more. no concessions! In fact. If the stock goes up next week.
yeah. I called Charlene and she was available. and I really wanted to see the new Lenny Bruce movie. Both of them were still in graduate school and worked full-time. Here’s how the discussion went: Christy: Tom. but Christy thought the relationship was heading in that direction. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. The couple had not discussed marriage. She knew that if she made such a demand and threatened to leave him unless he made a commitment. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. so their “free” time was very limited. Sara said she saw you at the movies with Charlene yesterday. We don’t have that much free time together. I guess I’m just surprised. If you subsequently agree to begin talks again. and she didn’t think Tom had. You’re not upset about that. Charlene. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. 134 50 Practical Negotiation Tactics . they are bluffing. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. Example 1 Christy and Tom had been dating for about a year. are you? Christy: I don’t want to be. I knew you had a class. you will have lost credibility with your opponent. This can come back to haunt you. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion.Tactic 33: Bluff! Bluff with caution. either. it might backfire. but I really am. I really hate it that you chose to see the movie with Charlene. and they really have no intentions of doing so. Poker players know all-too-well-that bluffing can be very costly. Tom: Oh. If one party threatens to walk out of the negotiations if a demand isn’t agreed to.
he had to make a commitment or risk losing her. The union negotiators. I need to have your commitment that you won’t do that. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. Christy: I just can’t see it that way. Tom: I have friends of long standing who are women. if you can’t make that kind of commitment. 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. I certainly don’t want to lose you. If Tom had “called” Christy’s bluff. It is. Tom: You’re serious? It’s that important to you? Christy: Yes. she paid her own way. She convinced Tom that her feelings were strong. so he didn’t call her bluff. Applying Pressure 135 . and at first he thought she might bluffing. Tom: Okay. I’m willing to risk losing you. He believed she was sincere.Tom: She’s a friend who happens to be a girl. I just thought of her because I knew you weren’t available. If that’s not possible. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. I won’t go out with any woman friend. Since he wasn’t sure about that. Conclusion Tom didn’t want to lose Christy. I’m not “dating” anyone else. then I’m afraid I want us to stop seeing each other. It’s made me realize that I want us to have an exclusive relationship. but very little progress had been made. It really wasn’t a “date”—we just saw the same movie together. Actually.
This is a critical issue to us. The union members ended up voting not to strike at this time. Another bargaining session was scheduled. Union: You’re wrong. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. we’re really prepared to go the distance on this benefits issue.believing that Nexon would not risk a strike.) 136 50 Practical Negotiation Tactics . We need an answer today. And I don’t believe you’re going to go call for a strike over this. First. it will cost too much. much less today. Nexon: I’m sorry. Nexon: I’m just not prepared to give you one. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. Second. We’re not going to reach agreement on this at all. then all of our other demands will change. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. Many of our union members who are working part-time hope to work full-time. Nexon: We’ve got lots of issues to discuss. or else we’ll be asking the membership to strike. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. Here is what happened at the next negotiations session: Nexon: I’m sorry. We need some agreement on this today. 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. If we’re not able to reach agreement on this. but working without benefits is simply not acceptable. Why don’t we put this one aside for now. This is something we just have to have. we want the part-time workers to apply for and fill fulltime positions as they become available. Union: You don’t seem to understand.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
its union has the advantage in the weeks just before Christmas. the guy was in no position to dicker over the price of the repair. and was forced to pay whatever they demanded. Since his toilet had overflowed and water was continuing to run all over the floor. when one side has “leverage” over the other. He was at the mercy of the company that could install an appropriate unit the fastest.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. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. Example 2 Let’s face it: Sometimes one party holds all the cards.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. there were times when there was no pressure and no emergency. Unions can strike at any time to achieve their goals if they have some leverage. while the other is not—that is. for example. The same kind of thing happened a couple of years before that: In the middle of August. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. he was able to successfully bargain for other services. such as the advantage of time. once had to call a plumber in for emergency repairs. The owners of professional sports Applying Pressure 141 . On the other hand. It is sometimes referred to as “pressure bargaining. Try bargaining with a plumber! This homeowner. his air-conditioning unit went out. If the employer is a shipping and express mail company. not blessed with many household repair skills. Since the heating and air conditioning company held no leverage over him. because this is the busiest time for that industry.
however. there are likely to be long-term repercussions. (Team owners are notoriously unpredictable. When one side places undue pressure on the other side. can suffer repercussions in the form of sabotage. 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. but they are less willing to negotiate several months ahead. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. When the employer proposed adding duties to the job classifications. if the unemployment rate is high and jobs are few.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. consider whether or not the two parties will likely meet again in the future to negotiate. The employees had no power to resist the demands of the employer. A note of caution: Circumstances in one round of negotiations might give one side an advantage. but before you choose such a tactic. the employer has the advantage: a supply of jobs. he didn’t have to be flexible because the employees believed that they had no alternatives. This gives it the upper hand in negotiating with employees. despite strong resistance.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. Other employers find themselves in situations that actually reverse the leverage (when. unemployment is low and jobs are plentiful. then you are in a position where you can set reasonable demands on wages. What goes around comes around. low employee motivation. etc. If so. and other undesired outcomes. will what goes around come around? 142 50 Practical Negotiation Tactics . for example. either individually or through collective bargaining. it is the union’s turn to hold firm on its demand). benefits. If you have a special skill that an employer needs and few others have that skill. she has leverage and can more likely hold firm on her price. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer.
Why? A sudden surprise can disrupt the dynamics of a negotiation. you have it when we drive home. but use this tactic judiciously. Their dad tried to reason with them. Susie: Okay. and I can’t stand it. I took it out of the box. Susie: The doll belongs to both of us.) Dad: Stop it right now. Almost from the beginning of the three-hour drive. because you will probably only get to use it once. the argument is over the doll’s shoes. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Andrea. Tell Susie to let me have it. (In a few minutes. The doll can be shared. and Susie. Mom said so. (Their dad pulls to the side of the road and turns to face them in the back seat. and Susie hid them under the seat. We’ve got a long ride ahead of us. you have it this part of the trip. Andrea had taken them off the doll. You’re driving me nuts. Consider making a suggestion or a proposal that completely surprises your opponent. the little girls began to fight over the doll. Just share the doll. About an hour into the drive. Andrea: Okay. Example 1 A father and his two daughters were on their way to visit the grandparents. and here’s how the “negotiations” went: Dad: You two stop fighting.) Applying Pressure 143 . This time. I can’t drive if you keep this up.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. Just because you saw it first doesn’t make it yours. the girls had been fussy. Andrea: The doll is mine. the fighting starts up again.
The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. The tactic was so successful. charging that they breached their duty in their handling these funds. he slowed down. so it was worth the risk. at great expense to the auditor’s office and the school board. She can have them later. Susie: Daddy didn’t say anything about the shoes. The litigation itself had been going on for more than three years. to no avail. 144 50 Practical Negotiation Tactics . He grabbed it and threw it out the window. Finally. 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. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. The defendants contended that the auditor’s actions were politically motivated. Dad tried correcting them a few more times. Dolly has to have her shoes. in fact. but nothing else up to that point was working.) Dad: Now there’s no more fighting over the doll. Both Andrea and Susie were so shocked by their dad’s action. Daddy said I got the doll on the way to Grandma’s house. they didn’t say another word. and I hope I can convince you of that. The auditor asked to meet with the editor to explain his position. 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. Conclusion Dad’s use of a “surprise” tactic was extreme. Dolly doesn’t need shoes on in the car. (They continued to argue and whine and pinch each other.Andrea: Give me the shoes back. I want the shoes. I think I have acted properly. and that they had invested and spent the tax dollars wisely.
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. Your reporters will probably want to follow up on it. the bank would not have done that had we not proven our case. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. as a matter of fact.Editor: I’m certainly willing to listen. but I have to warn you that from what I’ve seen and heard so far. From what I can see. Obviously. rather than drop the case. We believe the other defendants will soon follow suit. Auditor: Well. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. and it is costing your office money and good will. perhaps you should just cut your losses—and just drop the suit. Auditor: I appreciate their arguments. This morning. That’s really the reason this has gone on so long. this case needs to be dropped. Here are the papers. They’ve been making that same argument from the beginning. I really think the community would be better off. there’s just nothing to back up your allegations. Thank you for coming in. Applying Pressure 145 . 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. Editor: Well. I think I have something here that will convince you otherwise. but recommended that the parties reach a settlement. I guess we’re finished here. Editor: Well. but actually superior to some other entities you supervise. Conclusion The editor wrote an editorial urging a resolution for the good of the community. one of the banks settled with my office. They are very persuasive that this is just a political battle.
Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Mike knows he needs to get either his wife or his son on his side. Kevin: I don’t really care about a pool table. I can remember spending hours playing with my friends and family when I was growing up. although getting your license and getting a pool table are connected. but I think it will get a lot of use. and a car is more important to him than a pool table. If the other side involves more than one person. night after night. Mike: I know. especially Kevin. Kevin is against it because he is turning 16 years-old soon. Tina: I’m really against this pool table idea. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. I want to talk about a car! Mike: It’s really not one or the other. you might be able to dilute their power by identifying their different interests and addressing them separately. Tina and their son Kevin are against the idea. I know we’ll all enjoy it. Dad. 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. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. they’ll be mobile! The last thing I want is for them to be out cruising around. 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. Kevin: So am I. I’d 146 50 Practical Negotiation Tactics .Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic.
I’m surprised. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. A pool table could attract them here. I thought we were making real progress. received it without comment. Tom. some. They bought the pool table. 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. only Kevin did. then maybe it’s not such a bad idea. Instead of both opposing the idea. She noticed that Jim (another member of the union’s negotiating team. What happened? Applying Pressure 147 . Example 2 Negotiations on a new union contract seemed to be going quite smoothly. Once Mike convinced Tina of the idea’s merits. Tina: Well. and Kevin and his friends use it often. has just presented the company’s initial wage offer. Conclusion Mike found an argument that divided Tina and Kevin. Mike: I really do. she joined his side of the debate. But I’m not going to hang out here all the time. the chief negotiator for the company. the head of the union negotiating team. A number of contract changes have already been worked out and Wylma. Kevin.like them to hang out here more. 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. don’t you think you guys would use it? Kevin: I guess so. Wylma: Tom. Here’s how the negotiations went.
Jim? Jim: Yes. these are accurate.Tom: Wylma: Nothing happened. you certainly are aware of our financial situation. as Jim can point out to you. (When they resumed. When the negotiations began again.) Wylma: Now Tom. I think you need to rethink your demand. you’ve seen our sales projections and production costs. Do you think this is reasonable? Jim: (looking uncomfortable) Well. This is just what we think is fair. Wylma distributed copies of financial data that showed the company’s current condition. Wylma: Tom. Wylma: Jim. Let’s start again tomorrow morning. Tom had reduced his wage demand significantly. Tom: We don’t think so. forcing them to reconsider their demand. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. these are our actual accounting figures. 148 50 Practical Negotiation Tactics . Right. Your demand is totally unreasonable. But Tom. but he added some workplace changes that Wylma was comfortable negotiating. Wylma: Let’s take a break. you’ve heard our demand.
some of the siblings decided they liked giving presents to one another. Example 1 The four Jones kids grew up. but it is really important to me. When all of their children were small. but the thought that matters. That will just make a bad situation worse. Madison: Okay. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. Humor often works to break the tension of the room. married. We can’t afford to buy each other things we really need. Sometimes the argument got heated. I want to say something. the oldest and youngest Jones children. You are almost 40 years old. but as the children grew up and had families of their own. get over it. Applying Pressure 149 . so pressure grew to draw names and exchange gifts. I don’t feel Christmas in the way I used to.Tactic 38: Break the Tension Tension is inevitable in most negotiations. so you can find a way to quickly neutralize it. and it makes me very sad. 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. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. Ever since Mom and Dad died. so what’s the point? I don’t need another tie! Madison: It’s not the gift. and had children. but it should never be at anybody’s personal expense. Tempers flare and people say things they shouldn’t out of anger or frustration. Stay alert and watch for clues that a negotiation is about to get out of hand. Cory: Madison. especially between Madison and Cory. it was easy to agree on just giving presents to the children.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
This page intentionally left blank
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.
154 50 Practical Negotiation Tactics . Mr. the exchange will be between things of equal value. it is better not to compromise. The day-care worker wanted to take them outside for a while so that he could visit with his friend. the individual might be afraid that the exchange isn’t equitable). but since the other children in their room were not there. Julie wanted to play “dress-up. Okay. and that doesn’t happen without compromise. When that point is reached. At some point. they would have to play ball with older children. Isn’t it “later” yet? Right now would be a good time to go outside. don’t you want to play? We could color before your mom comes. each side must decide whether or not one more compromise will produce an agreement that they will later regret. how about going out to the yard for a while? You can swing or play ball. however. Then we can color.: Julie: Dara: Julie: Girls. I want to play “Princess” and I want Dara to be the “Prince. I want to play “Prince and Princess. was ready to color. Example 1 Julie and Dara both attend a local preschool. C. 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.” Can I color now? You said we would color later.” Dara. Both of the little girls liked to play ball when they were outside. (In a successful negotiation. who was outside with older children. or maybe tomorrow.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. If I can be the Princess. they were the last children left in the playroom for the remaining two hours of the day. One day. If there is resistance to compromise. C.” but she needed Dara to play with her. Dara.: Julie: Dara: Mr. not the Prince.
We don’t want to go outside. and teenagers attracted by Making Progress 155 . the parking lot will start to look trashy. The owner decided to try for a variance.Mr. When his variance application was made public. failed to offer the children something that was as important as the plans they had made. The existing parking lot didn’t meet the current parking standards for that size theater. wouldn’t you like to go outside first? After you swing for a while or play ball. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. We want to play dress-up and then color. you can come back in and play “Prince and Princess.” No. or apply for a variance. 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. They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. Conclusion The children stayed inside and played dress-up. C. According to the city’s zoning laws.: Julie: Hey. the owner had to supply additional parking. C. The owner and a small group of neighbors met to talk about these problems. 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. however. and they still had time to color. They did all the compromising they were willing to do.
I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. So. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. but it’s not ever full. The neighbors: Owner: 156 50 Practical Negotiation Tactics . if I agree to move the theater entrance to the south side. With the Comedy Club and the grocery store on that end. and we’d like to keep it that way. Many of our homes back up to that lot. What if I changed the entrance to the middle of the lot? That way. even though I’m not adding any parking. We’d like you to prohibit cars from entering or leaving from the south lot. We hope you’re right. I’m afraid. and break in his door. with your plans to put the entrance of the theater on the east side of the mall.the theater will start to hang around and maybe wander around our yards at night. the north lot is used more. We’d really like to block off that cut-through and have the theater face the south. We’re just not convinced. as you said. Right now. Right now. I could put a privacy fence along the east and west—at the backs of your yards. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. only when that lot is full would cars come around the mall and park on the south side. You could have all of the traffic enter from the north lot. not having direct access to the south lot from the street would be unworkable. the south parking lot has not been used much. In fact. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. And. lights in and out at night can be very annoying. Not having in and out traffic to the south of the mall is just not very practical. driveways on the south side of the mall are along the east and west side of the parking lot. the closest parking to it is along Elm Street.
the neighbors reported that they were very happy with the way it all worked out. set back a driveway width. If the fence was set back the width of a driveway onto your property. add a new entrance into the south lot. however. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. and make sure the parking lot is kept clean. there could still be access from the street to our garages—just not to the main parking area. Making Progress 157 . Agreed. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. put a privacy fence along both the east and west sides of the south lot. But you’re going to have to have some kind of security as well. then will you agree not to push for increased private security? Yes. The compromises were what everybody could live with. Teens can form into gangs if left unwatched. Now you’re talking about considerable expense. and they discouraged patrons from parking on neighborhood streets. If I agree to move the theater entrance to the south. Conclusion Both sides had to give up something on certain items in order to reach agreement. The fences created a buffer from the lights and noise.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. And a year after the theater opened.
they had gotten nowhere. she just didn’t think it was a serious problem.m. Close your windows at night and don’t listen. Joan had a new baby. and I just moved in next door. incident was usual or unusual.. 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. and because she was hard of hearing. because you are the one to set the tone for agreement. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. but be friendly. Joan: Hi. They might even start to underestimate your negotiating skills. and didn’t stop until 6:00 a. professional. Present your position forcefully. Lonely. This gives you an advantage. I’m Joan. but going out of your way to be friendly is an especially helpful tactic. Joan was already pretty tired. If your opponent is aggressive or angry.m. and pleasant always enhances one’s ability to reach an agreement. She didn’t believe her neighbors ought to complain about the barking. thinking that you will be just as easy to work with on the sticky issues. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. She learned that everyone in the neighborhood had complained at least once. respectful. 158 50 Practical Negotiation Tactics . Lonely’s only companionship. Example 1 Joan was new to the neighborhood. and that as angry as they were. Mrs. Lonely: If you’re here to complain about my Rocky. and what kind of complaints might have already been made.Tactic 40: Be Friendly Being polite. and started to get upset. just forget it. Joan decided to at least try and talk to the neighbor. The dog was Mrs.m. Your opponent might give in readily. Mrs. so her neighbor’s barking dog came as an unpleasant surprise.
When he does. no. Mikey. (Joan’s sleep was disturbed by another night of barking. Lonely: Joan: Mrs. No. Why. but she took her baby and went to visit Mrs. Lonely: Joan: No. too. Here’s my little angel. I’d like to introduce you to my new baby. Lonely again. Who.Joan: Mrs. Maybe I could come back tomorrow and bring him? Oh. I guess so. I stopped by and visited with him over the fence this morning. by the way. Well. He’s been keeping me up at night. Lonely: Joan: Mrs. The barking at night has been mentioned to me. Making Progress 159 . Lonely: Joan: Mrs. I know that some of these people around here don’t like him. it’s probably because they just haven’t had the time to get to know him. I need to get the baby home. I’ve got a friend who is a veterinarian.) Hi. He’s a real comfort to me. not at all. Do you think his age has contributed to some of that? You know. though. I just wanted to come by and introduce myself. isn’t he cute! He’s a handful. I’ve only got my Social Security. How long have you had him? Almost eight years now. then. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. I might have to talk to you about Rocky. I sure hope he starts sleeping through the night soon. Lonely: Joan: Mrs. sure. Well. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. I guess that would be okay. I can’t pay for something like that. is a really sweet dog. don’t worry about that. I’ll see you.
160 50 Practical Negotiation Tactics . of course. Mayor: (very friendly) I understand how these things happen. the mayor called and asked for a meeting with Company ZZZ officials. They anticipated that it would be an unpleasant meeting. Lonely’s needs and arrive at a workable solution to the problem. agreed to meet with the mayor. overseeing a factory in Mexico and selling products in the states. and Mrs.S. that’s very understanding of you. After Joan’s veterinarian friend visited with Mrs. I think that if you could have let me know ahead of time. U.A. Joan took up contributions from the neighbors. recognizing that the layoffs would be an issue in upcoming local elections.. Lonely and Rocky. he prescribed medicine that gave Rocky a more regular sleep schedule. It’s very difficult to make a move of this type without having it leak out. that the press got hold of the story of our company’s activities before we could call you to let you know. Hearing about this from the press obviously puts you in a very embarrassing situation. When he heard the news on the radio. Company ZZZ: (surprised) Well. 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. its 150 management and sales employees could continue to work in Happy City. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees.Conclusion Joan’s friendly approach enabled her to understand Mrs. Here’s how the meeting went: Company ZZZ: We’re very sorry. Company ZZZ. Lonely didn’t have to pay for the medicine she could not afford. Under its new corporate structure. The barking all but stopped. you would have.
the 150 management/sales jobs did end up moving to Mexico. so we need to understand how we can affect their decision on keeping an office here. This strategy worked. 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. because I’d hate for us not to make an appropriate pitch to them. 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. Company ZZZ: I’m not sure what to tell you on that. Mayor: Great! Let me know when we can talk again. or would we need to involve the Malaysia group? Company ZZZ: Certainly. Unfortunately. and the mayor was reelected. Mayor: Please let me know as soon as you can.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. and I want them to know that. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. Making Progress 161 . They need a really good deal on the plant price. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. the city has a potential buyer for your plant building. The buyer is a “disadvantaged business” we have been working with for some time. We just haven’t heard anything yet. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. We recognize that your new corporate owner is a large company located in Malaysia. Would you be in a position to talk to me about such a deal. By the way. You’ve been very understanding about this. Many laid-off employees did indeed find new jobs at the plant.
Alexis agreed. The two sisters had saved up a little money so that they could buy souvenirs. Susan understood the impact a tape recording can have when it reveals a lie.00 to spend. were on vacation with their parents in Myrtle Beach. threats. Example 1 Susan. Susan repeated her demand. Then he played the tape. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. They might worry that the tapes will be made public or given to others. and Alexis. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. Somehow. the younger sister. age 15. the investigator. Alexis then played the tape for her father. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. The effect on the other party might be even more substantial if lies. Michael Wood. this time in front of a hidden recorder. Alexis knew this was not fair. or used to pressure the other side to agree to certain demands. Conclusion For the first time in her life. are talking about a possible settlement of the issue. until Susan said they would evenly split what they bought. She borrowed a tape recorder so she could ask her father if this was a fair deal.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. or simply “bad faith” methods have been used by the other party. South Carolina. Fred Adams. Susan denied it. thus becoming a source of embarrassment. 162 50 Practical Negotiation Tactics . He asked his elder daughter about the arrangement. who was disappointed to hear that she might propose such a deal. and Jones. had $40. Jones’s supervisor. Alexis. the accused.00. age 14. but Susan had only $20.
Conclusion Jones had knowingly lied when he denied the charges. So you refuse to repeat the answers you just gave us? Yes. Stuart. When Adams set the tape recorder on the table and revealed that he had witnesses. Your request. Jones. you are aware that the next step in this process is to ask witnesses to come forth. Mr. He failed to think about what might be the next step. “Do what I want. to quote you. I think I can write my recommendation. I’ve brought a tape recorder with me. No one could have possibly misunderstood your intentions? No reasonable person. Appleton both claim they saw the incident and will testify.” meaning something other than copies? No. stares. and now I’ll ask you to repeat your answers—on tape. Making Progress 163 . Starr. Well. I simply asked her to make copies for me as quickly as possible. And you did not threaten her job if she did not. Jones suddenly realized that his strategy would not work. Mr. And please describe your general manner. You never touched any part of her body? Not even accidentally? No. exactly what you said to Ms.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. (a long pause) I want to see my lawyer. he also lost his negotiating position. But by refusing to repeat his answers. Ruiz and Ms. So. and gestures did not have a single hint of sexual implication or innuendo? None at all.
Maria. The second person then chooses which of the two parts they will receive. Many of us learned this one from our parents: After two people agree to the strategy. Maria and Roberto: No. the classic “split and choose” tactic might be the best way to settle the issue. one person is given the task of dividing the object(s) into two parts. Oh. 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. of course. Roberto will get to choose which half he wants.” the divider. Realizing the potential of getting the “smaller half. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. Their dad instructed them to share the candy bar. is usually careful about dividing the object into two equal parts. which certainly is large enough (he naively thought) for two young children to easily share. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . because you did the cutting. take this knife and slice the Snickers into two halves.
Archie: Here is the map. Making Progress 165 . Give me the map and a pencil. Deal? Clarence: Sure. even children. that sounds fair. I don’t really care which lakefront lots I keep. Clarence and Archie. jointly purchased fourteen acres of lakefront property several years ago. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. Archie: I really don’t care either. Example 2 Two friends and business partners. 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. but is not sure how to arrive at a fair split. The problem is that one of us will get four lakefront lots and the other will only get three lots. so we should be able to divide the property fairly. They have a recent appraisal that values the property at $150. Archie is ready to build a retirement home on the property. and wants to divide it into two separate parcels. Archie: That’s true.000. both parties. quickly recognize the fairness of the divideand-choose method. There is only one place for an access road that must serve all lots. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. Clarence: Right.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. That makes them more desirable. according to county deed restrictions. Clarence agrees to divide it. Then I will choose which parcel I want.
and both men were happy with the arrangement. Which would you have chosen? 166 50 Practical Negotiation Tactics .Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. and the second parcel with four lakefront lots and one other lot. Archie chose the parcel with the three lakefront lots.
” Under store policy. Her husband Jason. His tactic was to throw in a “nickel” in order to make lots of “dollars. etc. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. supposedly the bargainer in the household. 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 . Jason was having a hard time getting the salesman to lower the price. With a great deal of effort. However.” Many people have witnessed or used this effective negotiating tactic. Brenda did her part when she said. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. attach legs. is expected to dicker over the price. he also set up all of the furniture in a second-floor bedroom. “Okay.” thus extending the scope of the negotiations. Conclusion The amount the couple spent was fairly large. 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. miles from their home. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. delivery was limited to a small geographical area. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way. and the delivery carrier doesn’t set up mirrors. we’ll take the suite if you’ll throw in free delivery and set up the furniture.
168 50 Practical Negotiation Tactics .important item. so be prepared to withdraw the nickel and dime item at the hint of trouble. This experienced bargainer said. If one party misjudges the situation. 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. we’ll agree to Health Plan A with another ½ cent on the pension fund. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. In one case. At the end of negotiations. “Okay. it can be a dealbreaker.
or knowledgeable. Donna: I’ll take the bar with stools. Kathy: But they are a matched set. This creates what is called a “halo effect. Kathy: I’ll take the pool table. Donna: No way! These are the last two pieces of furniture. I’ll take the color TV.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. decision-making meetings. Kathy: I suggest we take turns choosing which of these things we want. and all the rest is small junk. Kathy: Then I’ll take the couch and love seat.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Donna: Okay. trustworthy. People tend to make an effort to put their best foot forward. thus creating the impression in others that the good qualities they see are present all the time. but they are two pieces of furniture. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. and performance evaluations for people to come across as likeable. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . Donna: They match. You can go first. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set.
170 50 Practical Negotiation Tactics . Johnny had the “halo” of an honest person. I trust his judgment. (Pause) We’ve got to settle this today and get this stuff moved. Example 2 During a heated labor negotiation. I want the love seat. and he has always struck me as an honest person. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. with a record of labor involvement that included three recent strikes. 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. What for? Tell him the situation. Let’s call Johnny Ryan.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. and ask him if the couch and chair should be one item or two. He might or might not have also been a good arbitrator. and if the bar and stools should be one item or two. Good idea. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. what can we do? Give me the couch and love seat! No. The union negotiators. I want the stools. He’s our cousin.
Making Progress 171 . the management team hired Sam Boston. The union accepted the proposal. On Monday. This time. the consultant did not speak. the city management again hired Boston. Boston went to the negotiation table with the management team. but his mere presence caused the union leaders to accept a management point as valid. but the power of the so-called halo effect was great. 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. thus bringing the negotiations to a conclusion. He solemnly told the union negotiators that he had been hired to review it. Boston was widely known as a totally honest man who speaks his mind. even if the proposal appeared to be valid. the former union president. The teams took a weekend break from the stalled negotiations. During the break. Two weeks later. He said he believed that it would work as presented by management. They might have stretched his halo farther than his expertise and experience warranted. without any reservations. and that he did. when negotiations again stalled on a retirement plan issue. as a consultant to review their proposal.simply did not trust the management team.
but the key is to gather facts that you might need—not just the facts that you will need. has owned the house for 24 years and is downsizing to a condo. Here’s a list of the five that are about the same size as yours. The owner.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. We love your house. Sam Jones. the other party will ignore or refuse to believe the information. but the right facts presented at the right time can chill or astound and completely turn things around. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. and we are countering with an offer of $250. They sold for: $225. They believe it is overpriced. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.000 under the listing price! We realize that. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. but you’ve priced it way too high. and $237.000. Sometimes. This offer is for more money than any four-bedroom houses on this neighborhood list.000. but we feel that it’s a fair offer. 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. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. What? That’s $35. I’ll get back to you. (Next day) We’ve reviewed the records you’ve produced. $229. $237.000.000.500.000. $235.000.
Hatfield: While I was at purchasing. We accept. Conclusion The Joneses had based their asking price on the advice of a friend. Here it is. I’ll be… Okay. Order the new computers. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. He found facts that supported his position. if other departments have ignored the policy. let’s not worry about it. Making Progress 173 .600 unless the company president approves. Conclusion Hatfield had anticipated what his supervisor’s position would be. I’ll get called on the carpet. Example 2 Supervisor: You know the policy. Hatfield: My staff has done a lot of research. That’s the bottom price. and did his homework. I asked for a list of all new PCs bought this year.400 each. and wisely chose exactly when to present them in order to make his point. Well… We have a written counter of $245. Supervisor: Well. Supervisor: If I okay this purchase order. who was not particularly knoledgeable about real estate. We’ve talked with purchasing and we have the authority to buy seven for $2. You can’t pay more than $1. No one can go over $1.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute.000.600 for a computer. and we know that only this model will meet our needs.000 each. The last 20 were over $2.
Maureen. and two are for my husband. reveal misperceptions or lack of knowledge about positions that can be corrected. but you don’t want to jeopardize your job? Jenny: Yes. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. can you check out two on a card for him? Jenny: Well. If you trust me. Otherwise. yes. Maureen: Well. I can do that within the rules. I trust you. you know me. Example 1 Maureen: What. Maureen: Well. I want two of these. I’m sure you would not. some people would have forty or fifty books out at the same time. They can help you identify or better understand what the other side really wants. Would I do that? Jenny: Maureen. and they would all be unavailable to others. Maureen: So you trust me with the books. but I don’t set the policy and I can’t make exceptions. I can’t check out these four books? Jenny (Librarian): That’s the policy. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. A maximum of three books can be checked out to a person at any one time. The effective use of probing questions can help achieve a favorable settlement. 174 50 Practical Negotiation Tactics . But I can’t break the limit rule—it is an absolute rule here.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions.
Who does have access clearance? Mike. But this forces us to make decisions without complete information! Yes. I couldn’t find anyone who knew it. If that data ended up in the wrong hands. Can you get me the number? Sure. Jay. Sue. it could kill us. and they don’t even have a use for the sales data. Babu. Making Progress 175 . Mary and Kenzie? They are 2-3 pay grades below us. Why? Some policy? Yes. What’s the policy number or date of approval? I don’t know. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. Mary. (Next day) Do you have the policy about giving out product sales information? No. we can’t do that.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. are you sure I can’t get your information technology people to give us direct information on product sales? No. Brooks. Security? Right. and Kenzie. but it’s because you don’t have access clearance. They say it’s a security issue.
Jack: Here. When can I get the data? Mark: Today.Mark: Well. if we can have access? Mark: I guess so.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. His probing questions turned up a critical fact.P. Jack: Can you ask your V. Jack was able to receive clearance as well. that’s been the policy since I’ve been here. 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. I’ll sign now. Once he discovered that employees in lower pay grades had access clearance. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. I’ll get it for you ASAP.
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). When multiple issues are at stake and most have been agreed upon during negotiations. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. T Reaching Agreement 177 . If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. this process can easily result in a final settlement. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. 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. this tactic can produce an agreement. They bring it out when a dispute arises. 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. hours. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. In this process. and the child learns an important lesson about life. the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. and the classic Walk Away (Tactic #48). If friends or neighbors need to settle something but prefer to avoid the negotiation process. or even months after the first offer is presented. When two parties believe they have an oral agreement.Stage 7: Reaching Agreement he final stage! It might come minutes. days.
Nancy brought up the subject of vacation again after dinner. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. As he hugged her. She said.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. Let’s do go to Virginia Beach and Washington D. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. Larry Snyder gets bored staying in any one place for many days.” Conclusion The husband was so excited about visiting Washington. Example 2 Negotiations can take a long time and incorporate many issues. 2) allows the other side to feel the release that comes with completing the bargain. After days and weeks of on-again. D. Near the end of a particularly anxious bargaining session when there was little time left to negotiate.C. “I’m thinking of agreeing to your plans for vacation.C. His wife had carefully planned her exact “premature” vacation agreement. but his wife Nancy likes to stay put and relax. off-again discussions.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. 3) and adds one last key demand to the congratulation sentence. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. 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. They both have stressful jobs and look forward to their annual vacation together.
One of the best pieces of negotiation advice is to remain fresh. There were grins and handshakes coming from the other side. However. It was so close. (This is a bad position to be in. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. My team was afraid we would not even come to an agreement. but acceptable. Ted said. symbolizing that he was agreeing to the entire final offer. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. I felt the tension in the room. We all knew that it could come down to agreement or strike. but held firm on remaining operating principles. but also that they sensed the weariness of my team. but the other side continued to ask for 60 days. The old agreement specified a 30-day period. he turned on a large warm smile and extended his hand to shake. “…as long as you give us a 45-day probation period. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. but we agree to everything in your final proposal…” Members of my team shouted hooray. fit. One operating issue involved the probation period for new employees. as the negotiator came closer.) Here’s what happened: Bob: I knew that the other side was similarly harried. My team had convinced me that doubling the time frame would create a real problem on the shop floor. “It was hard for us. we made some small concessions on financial matters.almost willing to accept any deal. The celebration had begun.” Bob: Ted timed this perfectly. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. because it makes you pretty vulnerable. In our last offer. When the chief negotiator emerged with his team and headed toward my team. and rested. Therefore. Reaching Agreement 179 .
However. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. 180 50 Practical Negotiation Tactics .Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. the negotiator skillfully finishes his words of congratulations by inserting one last key demand.
Jay. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. and the lease on my Avalon is about to expire. the following exchange occurs. too. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. here are your keys. Jay. I don’t want to negotiate. He stopped by Pembroke one day to look at the new models. a veteran salesperson. all from Sue Wilson. right? Jay: Yes. Sue: I remember you. but I thought I might want to try a new Highlander. The next morning. (Vahaly drives the new Highlander home. but my Avalon is a good car. You bought your wife a new van just last year. Whether you are really bluffing or you are serious.) Jay: Sue. My name is Jay Vahaly. what can you do on a 36-month lease? Reaching Agreement 181 . I’ve worked with you before. and he can simply buy it when the lease expires. You had time to assess my car. if I roll over the lease to a Highlander. be sure you think this through beforehand.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. Sue: Well. Your opponent will have to either let you go and run the risk that things are really over. how did you like it? Jay: Okay. or go after you and perhaps make a new concession in order to get you back to the table. I like it. but his Avalon has been a good car. Jay: Hi. He really likes it.
Sue: I’ll try. (15 minutes later) Sue: Well.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. but 182 50 Practical Negotiation Tactics . you can turn in the Avalon and get the Highlander for only $249 dollars more per month. at most. Jay. Sue called him as soon as he walked in the door and offered another $50 break on the lease. I’m disappointed. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. they came down to $199 more on a thirty-six month lease. Jay. (Jay got in his car and drove home. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Jay: What? I was thinking the lease payment would be. He effectively used the walk-away tactic to let Sue know that he was firm on the price. (He walks away) Sue: No. Jay accepted. Sue: Sorry. Let me try again. I thought I’d get a fair deal. They’ve talked about retiring in recent months. Please go back and work out a lower lease payment. These Highlanders are hot items! Jay: Well.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. He was prepared to keep his Avalon if the lease was even $1 more than his limit. $100 more. a successful musical instrument sales and rental store. That was the figure he was looking for. Jay—wait.
What do you think? Judy: Larry. Larry: Michael. I still want to develop this block.5 million for the building. and I only need your building to own it. Larry.) Larry: Michael is here again. and I’m not interested in less. Michael: Well. (Judy and Larry walk into the back room and close the door. but their continued walkout convinced Michael that they would hold firm. Larry: Judy. after no contact from Larry or Judy. today. come out here! (Judy comes out from the back room. our accountant said it’s worth $6 million. Larry: Yes.) 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. a local developer. He met with Bizannes twice before. How’s business? Larry: Great! I’m surprised to see you again. let’s eat lunch. Two months later. Judy: Larry. go back to your office. and he is offering us $4.5 million. visited their store.5 million. One day. Michael Roberts. and we gave you our price. you’ve already told us that. Reaching Agreement 183 . with a certified check. Michael calls on them again with a check for $5. Larry. You rejected it.both of them love their store.0 million. Michael: I have a check right here for 4. Michael: Good morning. they were prepared to accept $5. which the Bizannes accept. so why are you here? Michael: I’ve discussed it with my partners. In reality. and I’m prepared to offer you $4.
000. Keep the $1. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Lynne and Gary bring the restored Singer to Jenny’s house. Lynne told Jenny that she and her husband Gary have restored two other Singers. They inform her that they put the machine on e-Bay and have an offer of $1.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. 184 50 Practical Negotiation Tactics . In ﬁnal offer arbitration. Example 1 Jenny and Lynne are sisters. One day Lynne dropped by for a visit and the discussion turned to the old Singer. both sides have agreed in writing to accept the arbitrator’s decision. Each party wants their offer chosen. but they wanted to give Jenny $500 for her “share” of the machine. Six months later. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Lynne responded that this was their intention. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. 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. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. Both involve the use of third parties who are objective. Let’s split the money. and would be able to restore hers as well. which she has kept in a barn for over ten years. Jenny: No. Jenny has an antique Singer sewing machine. I won’t take it. That was the deal. I offered it to you for nothing. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. In most arbitrations. which is generally voluntary. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. We have a few dollars invested in parts and we had fun working on it. Lynne: No. each party submits their ﬁnal offer on each unresolved issue (usually in writing) and the arbitrator chooses one as the ﬁnal settlement as it has been submitted (no changes or compromises). In mediation.
) Judge Ryan: Here is my written. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. My troops are getting restless. I have chosen management’s offer to keep it as it is under the current contract. and meet back here in 72 hours—3:00 p. The union’s position could have run into millions of dollars. Tina: Yes. Tina.m. As a brief explanation. I can’t see any way to reach an agreement. Example 2 Ralph: Well. Ralph: I know. Ralph: Right! (Friday at 3:00 p. since he could only choose one offer. At best. Tina: Good. first on the health insurance co-pay. (One week later) I think Jenny’s position is the most reasonable.Jenny: Dad: Okay. Then we both submit our final offers to Judge Ryan within 48 hours. so I am invoking the finaloffer arbitration ground rule we have in place. we are down to only three unresolved items. on Friday. he did not need to “haggle” with them. but we’ve made no movement on any of them since we started. binding decision on the three items.” Lynne proposed a 50-50 split. the old machine was only worth $50 when Lynne hauled it away. based Reaching Agreement 185 .m. They should get the other $950. Their father found Jenny’s position to be the most reasonable. I’ll buy that. Any increase in value was due to the work of Gary and Lynne. after six weeks of negotiating.
and stress. I’m sure you realize that we could have taken six more weeks to reach the same point. on the clothing allowance. Well. 186 50 Practical Negotiation Tactics . It will only cost $120. Finally. money. Now let’s get a signed contract. and an item that large should have been negotiated at the table. but we agreed to this process. Second.000—less than 1 percent of the total package. I have chosen management’s offer because the union did not justify why the past practice should be changed.Ralph: Tina: on last year’s data. I’m not happy with your decisions. reasonable resolution to their last three unresolved issues. nor why their method was superior. on the merit pool distribution method issue. Conclusion The final-offer arbitration process enabled the parties to gain a fast. I have chosen the union’s final offer. Ralph. and peacefully finalize a contract that contained several important gains for both sides. At least we both saved time. No increase has been given for six years.
and decided to stop by to see if they liked the house. however. and one of the other couples looked very interested. Seller: We’re asking $152. all the usual stuff in a sale. not the furniture.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. we won’t be involving our real estate agent. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. At the very least. If we shake hands on it right now.000. The owners were selling the house without a real estate agent. Obviously. Example 1 Bill and Paulette had been house-hunting for some time. We’d like to make you an offer of $150. and while Bill and Paulette had been using an agent to help locate houses. they looked at this particular house on their own. They saw the “For Sale” and “Open House” signs. Bill: Reaching Agreement 187 .000. Bill: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay. and felt that they would have to work fast to make an offer before someone else did. They were not the only couple to come to the open house. everyone is busy grappling with the details of the negotiations. During a discussion. They finally looked at a house they really liked. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. 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 and Paulette fell in love with the house. Bill pulled the seller aside. Seller: Yes.
the refrigerator. she said that her supervisor had repeatedly asked her out. It worked. When he had the chance to put the deal in writing.000.Seller: Just a minute. he listed the stove. then we have a deal. Conclusion The seller had always intended to leave the garbage disposal. he left the price at $150. real. In her complaint. a public agency. I think we can work something out. and the two area rugs were specifically included. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. and the garbage disposal. look this over. Seller: Okay.000. The supervisor assured the employer that there was no basis for her complaint. Sign here. Under the section for appliances to be left on the property. Let me just get the standard “offer of sale” form and fill out what I hear you saying. and that the problems with her job performance were. he began to have “problems” with her job performance.) Seller: So. and when she refused. and two area rugs. he listed an attached hutch in the kitchen. in fact. that’s what I meant. all window blinds and drapes. but I’d like to make sure there are no misunderstandings. since he probably would have missed them) Yes. In the section for fixtures and miscellaneous items to be left on the property. the hutch.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. (The seller recorded the offer of $150. The supervisor pointed out that he had a staff of 20 or so women. the hutch. the house is yours. If it’s what you meant. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . Example 2 Monica brought a sex discrimination charge against her employer. and the two area rugs. and had been prepared to drop his price to $145. Bill: (pleasantly surprised to learn that the garbage disposal.
000. you didn’t mention in the agreement that in exchange for the $100. but said that fighting the charges would be a long.there was little basis for the complaint.000. You’re just trying to make it seem as if your supervisor did nothing wrong.000. 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. And the confidentiality clause is standard. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. 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. by this time. Withdrawing. Why’s that? Well. I’m He: She: He: Reaching Agreement 189 . Monica had. then Monica had to acknowledge that the supervisor did nothing wrong. The supervisor insisted that if the employer felt he had to settle. and must agree not to tell anyone about the $100. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. even though you are paying Monica because we can prove he did do something wrong. Look.000 without actually having to prove anything. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. settling—What difference does it make to her? She’s getting her $100. my client is supposed to formally withdraw the complaint rather than just settle it. even though we’re certain we would prevail. and expensive matter. drawn-out. He’s happy to prove that in court. It might be standard when there’s a settlement.000. He offered to send settlement agreement papers to her. But the employer doesn’t want to go through the expense and publicity of a trial.
I’ll take your offer back to her and let you know. but word did get out that a public agency paid $200.000. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 and the conditions of the offer. There was a confidentiality agreement.000. It was made clear that the employer had paid the additional $100.She: authorized to pay $200. to his disadvantage. Monica accepted the $200.000 when all that was asked for was $100. 190 50 Practical Negotiation Tactics .000 just to get the employee to “withdraw” the complaint. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.
If the agreement reached at the time had been put into writing with all three sisters signing it. “Oh. rather than attack each other. The degree of detail and formality of a written document will. when they engage in honest “give and take” negotiations.” Clear communication is essential if you want to reach an agreement and have it abided by. even an informal agreement benefits from some type of written documentation. commitment. In Tactic #17 (Package Items). but some of the decisions were put off for a couple of months. then the parties have to abide by the agreement.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. however. Think of how often you have said to someone. operating under an agreement after it has been reached can be even more difficult. it is much more effective in the long run when the parties enter into “win-win” agreements. of course. a written document is hardly necessary. One way to help the parties abide by an agreement is to put it into written form. and when they agree to solve problems together. “That may be what I said.” By the same token. reaching an agreement is sometimes a long and difficult process. talking is not always the same thing as communicating. Putting the Agreement in Writing 191 . Putting an agreement into writing serves three purposes: communication. depend on the kind of negotiations in which you are involved. most certainly needs to be in written form. Certainly someone has said to you. Reaching an agreement is the first step. Unfortunately. A Communication Hearing is not necessarily the same as listening. When two friends agree on what movie to see. the three sisters reached an amiable agreement. I thought you said something else. As these examples of personal and business negotiations show. but it was not what I meant. and contract. However. A union contract. it would have been easier to resume negotiations at a later date.
that is. 192 50 Practical Negotiation Tactics . Larry wouldn’t have had to argue over a bill for the plumbing work his cousin Will did if he had asked for Will’s estimate before accepting his offer to help. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. seek information. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. sounds. the price is spelled out in the loan document as “twenty-two thousand. sounds.Communication is a process that involves a sender and a receiver.” In Tactic #14 (Don’t Always Hide Your Weaknesses). he can be reminded of the details because it’s all there in black and white. When communication is limited to the spoken word only. 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. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. And because the sender and the receiver are two unique individuals. pictures. or movements being used by the sender. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. If Jason fails to live up to his side of the deal. you have created something tangible that can be referred to in the future when memories become fuzzy. a couple of months away. nine hundred and forty-four dollars—$22. The receiver has to decode the message being sent by trying to understand and interpret the words. the message being conveyed and received might be understood differently. The sender wishes to convey an idea. When you create a written record of the details of an agreement. Who isn’t excited about buying a brand new SUV or truck? Until.944. His mom could more easily enforce the agreement if she had it in writing. pictures. or express a thought or emotion through words. or movements. In Tactic #4 (Use Objective Criteria).
and dated agreement. and how much. the real estate contract includes information about the buyer and seller. your plants die because the house-sitter wasn’t told to water them. ask yourself the basic questions of who. details such as what fixtures stay or what appliances go can be easily overlooked. what. or it isn’t an agreement—it’s merely the conveying of a gift. Carefully and completely describe the subject matter of the agreement. protect yourself by having a written. Here’s what we mean. Both parties must receive a benefit or something they personally consider of value. One party wishes to buy what the other wishes to sell. In either case. However. and put that information into the document. which. and getting all the parties to sign it usually creates an enforceable contract. When you are ready to commit yourself in writing. as many people learn when they purchase a home. say. You can informally enforce an agreement just by showing the individual(s) the signed copy as a reminder of the substance of the agreement and their commitment to it. WHY? 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. have your spouse also agree to the details of the agreement. dating it. why. pulling an agreement in writing. the address and description of the real property. You can do this more formally by taking them to court (perhaps as a last resort). leading to misunderstandings and contract disputes. when. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. before the trip. which kind of. WHO? Provide of the full names the parties necessary to the agreement. Generally. If you have agreed to pay someone to house-sit while your family is on vacation. one party will change behavior in exchange for something of value from the party who wants the behavior changed. how many. Putting the Agreement in Writing 193 . and so on in standard contract form. Failure to do so can lead to big problems. in writing. WHAT? The written document should clearly describe the item(s) covered by the agreement. signed. one party will work if the other party pays for the work.Contract Finally. where.
which one or which kind of. agreed to the same thing. if that becomes necessary). and having all parties sign it ensures that the parties have.The remaining questions fill in the details of the agreement. The more-specific and clear these details are. depending upon the deal: when or where. dating it. the better. how much or how many. in fact. 194 50 Practical Negotiation Tactics . And it can create a tangible reminder of the deal (or an enforceable agreement. It gives the parties an opportunity to really buy into the deal. Putting an agreement in writing.
and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: 196 50 Practical Negotiation Tactics .
________________ 4. ________________ 10. ________________ 3. ________________ 6.Name of Negotiation Tactic 1. ________________ 5. ________________ 2. ________________ 9. ________________ 8. ________________ 7. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 .
This page intentionally left blank .
D.REFERENCES Carrell. The Relaxation and Stress Reduction Workbook. Fisher. 1989. Gavin. 2004. Domenici. Getting to Yes: Negotiating Agreement Without Giving In. Saunders. 2nd ed. 1999. Minton. R. New Jersey: Prentice-Hall. You Can Negotiate Anything. Ill. and J. Herb. Roger. Heavrin. and M. David. Fiske. W. Eshelman. McKay.E. Roger. 1988. and J. Inc. 1987. Calif. Los Altos.. Negotiation Skills. Fisher. Chicago: Richard D. New York: Penguin Books. Practice.: Waveland Press. 2nd ed. and C. 1997. 1996. New York: M. M. Patton. Upper Saddle River. Patrick J. Labor Relations and Collective Bargaining: Cases. Prospect Heights. LittleJohn. Mediation. The Essentials of Negotiation. Negotiating in the Real World. Ury. Lewicki. Cleary. Sharpe. Inc. Kennedy. 7th ed. Inc. R. and B. Inc. George. M. J. University of Missouri: Columbia Press. 2001. Gotbaum. New Jersey: Prentice-Hall. E. The Negotiation Handbook. Clark. and Law. 2001. M. Maddux. Cohen. The Negotiator’s Handbook.: New Harbinger Publications. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. References 199 . Upper Saddle River. and S. K. New York: Bantam Books. 1980. Inc. C. 1988. Pocket Negotiator. R. Victor. and S. Getting Together: Building Relationships As We Negotiate. Fuller. Irwin.: Crisp Publications. Oakland. Calif. New York: Penguin Books. 1991. Inc. W. New York: Simon and Schuster. Inc.. New York: Basil Blackwell. 1991. Brown.
New York: Viking Press. 1994. Getting Past No: Negotiating with Difficult People. New York: M. Cambridge. L. New York: Bantam Books. The Eight Essential Steps to Conflict Resolution. Shell.Nierenberg.E. Labor Relations in a Global Economy. 1981. New Jersey: PrenticeHall. Raiffa. 1991. Inc. G. 2001. New York: Penguin Putnam. Inc. Lexington. Howard. Raiffa. 1999. Massachusetts: PON Books. 1998. Bargaining for Advantage. Dudley. New York: Simon and Schuster. 1982. Cambridge. 1987. Weeks. Taking Charge/Managing Conflict. The Art of Negotiating. Howard. Inc. Ury. The Mind and Heart of a Negotiator. B. J. 1996.negotiationsources. Thompson. Tsogas. Lectures on Negotiation Analysis. Heath and Company. William. The Art and Science of Negotiation. Upper Saddle River. Sharpe. R. C. www. Stulberg. Gerald I. Massachusetts: D. George. Massachusetts: Harvard University Press.org 200 50 Practical Negotiation Tactics . Inc.
M Christina Heavrin J. HR Magazine. Personnel Journal.A. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. During his academic career he has received awards for both outstanding research and teaching. Dr. organizational behavior. Carrell is Dean of the College of Business at Northern Kentucky University. Personnel.ABOUT THE AUTHORS ichael R. Marshall University. and served as President of the Board and Mayor Pro-tem for three terms.D. Labor Law Journal. Bakersfield. In addition. The Journal of Accountancy Training. and the University of Louisville. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . and Public Personnel Management. Books published by Dr. and negotiations. In addition to negotiating numerous litigation settlements and contracts. Business Forum. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. The University of Nebraska-Omaha. Human Resource Management. Carrell are in the fields of collective bargaining and labor relations. and MBA and B. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Morehead State University. The Academy of Management Review. Organizational Behavior and Human Performance. The Personnel Administrator. he was elected to the City of Louisville Board of Aldermen for five terms. Carrell has held academic positions at California State University. which is located in the greater Cincinnati area. He received his doctorate from the University of Kentucky. in Economics from the University of Louisville. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky.
park and a successful industrial park in the City’s enterprise zone. 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. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. Jefferson County. an agreement between the State of Kentucky. Ms. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. the City and a for-profit hospital for guaranteed indigent health care services for city residents. 202 50 Practical Negotiation Tactics .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.