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.

Introduction

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Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.

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50 Practical Negotiation Tactics

Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful

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

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

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. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. Keep this book handy when preparing for any type of negotiation. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. Once a settlement is reached. and the tactics that might move the negotiations along. the parties and their interests. “I see why you want to cut down the tree. the facts. and meet with you again.” To a neighbor you can say.time to look over this performance review and respond point-by-point. but I believe it adds value to our house. negotiations can be concluded with a written or oral agreement. the other party will realize that you intend to negotiate and do not accept the situation. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. 6 50 Practical Negotiation Tactics . and use the forms in the back to identify the issues.

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

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

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

Information.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 .

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.

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50 Practical Negotiation Tactics

Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.

Example 1
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.

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

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

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

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

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

they control the breaks and environmental factors. and go play somewhere! Cybil: Well … Okay. and so on. Cybil. 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. (thirty minutes later) Bailey: So.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. too. such as a hotel conference room. I like the frog.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. Mother: Hush. Make up your minds. 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. the frog is everybody’s favorite. girls. Bailey: Cybil: Preparation 21 . (Think of the showroom tactics used by car dealers. it’s a deal. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. they have the information they need at their fingertips.) Let’s take all our Beanie Babies to my house to trade! Okay.

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

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

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

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

This strategy can build trust in the negotiation process itself. not on what you want to spend. You can’t treat me the same! Mother: Well—so we’re talking about several issues. if I give you an increase.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. Once you both agree on the list of things to be negotiated. Mother: That’s a large increase—and we just raised it last year! Shari: Well. Shari: I’m four years older than the next-oldest. Shari: Well. cut the grass. has asked her mother for a $10/week increase in her allowance. and ask the other party to add to the list. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . (3) more chores. (2) a later curfew. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. and for going out with my friends. wash the cars. your little sisters will want equal treatment. Mother: But your allowance is based on what you earn in your weekly chores. Example 1 Shari. what else can I do. 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. It will cost me more than $10—about $35 per week. a sixteen-year-old who lives with her parents and three younger sisters. not just an allowance increase! There is: (1) a $10 increase. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. I need more money for clothes and CDs. baby-sit your sisters.

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

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

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

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

That effort failed. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. timing was everything. He planned for it accordingly.. during an hour break in the meeting. A member of the pro-project group quickly called for a vote after the leader gave a signal.m.. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.m.. When the meeting resumed at 4:00 p. The measure passed 6–5 at 5:45 p. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years.m. For weeks.deadlock. and it worked.m. as predicted. in the end. Preparation 31 . At 5:30 p. the project had been stalled by 6–6 votes. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. a member of the anti-project group left the room. Then.. and the meeting was adjourned. Both sides caucused: The leaders on each side met to negotiate a compromise.

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

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

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

but they have no idea what the value of their firm’s name might be in this nearby city. were still alive. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.000. The other law firm was prepared to pay $100. When Carol refused to budge. 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. Here’s how the initial negotiations went: Partners: Well. or she has unreal expectations.Buyer: What if we offered you $100.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. we are certainly interested in your request to “buy” our firm name to use in your city. The partners are interested in selling the name.000? Carol: We really can’t take less than $160. We’re curious. Example 2 The law firm of Bits & Bites was a Sioux City institution. as to how you think the name is going to benefit you. though. In any event.000 immediately.000 offer by coming down in price at least a little. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. 36 50 Practical Negotiation Tactics . Inquiries to other law firms were not very helpful because in almost all of the instances. the buyer took it as a signal that either Carol didn’t want to sell. and then $10. Neither Edward Bits nor Edmund Bites. the founders of the firm. enjoying a statewide reputation for quality representation. Carol drove off a potential buyer by setting an asking price that was just too high. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name.

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

The price they were willing to pay would have indicated what the naming rights were worth. rather than negotiate. Either side could have asked for too much. 38 50 Practical Negotiation Tactics . It immediately dropped the idea. 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. Bits and Bites should have let the prospective firm make the first offer. In this situation. since they had initiated the contact. Both parties were probably at a disadvantage.

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

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

Sandy. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent.m. I want to keep you as a customer. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. even though it was far above the previous contract. Miguel! We’ve worked out a deal I think you can live with. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. I’ll stop back about 2:00 p. but Miguel’s right. you two? Good news. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. (Three hours later) I’m back. Planning a Strategy 41 . I’m afraid our relationship is over. Any luck. If not. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. I hope you can meet my terms. these terms will put me out of business—I’m a small 20-person operation. Sandy. Liz. I’m going on to lunch. with a position he knew was unreasonable. Sandy. Our customer base has grown. I’ll explain on the way back to the office.

made some very good purchase decisions for his small business. This will put you at a distinct disadvantage from this point on. I noticed this. he was very unhappy. 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. and might even harden your opponent into an unfavorable position (for you or for both of you). 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. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. He had. 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. in fact. but I recently was sold a $. The fault was partly his because he did not stay on top of changes. 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. It seems that the rate you are charging me on my home phone is $1.00 a minute. 42 50 Practical Negotiation Tactics .10 a minute rate at my office location. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. such as deals on computer packages and phone services. How may I help you? Hello. I have a problem with my recent bill and my billing rate.Tactic 9: Control Your Emotions Stay cool. He decided that the best approach was to act indignant when he spoke to the company representative. So. because we have had a sick relative out of town and we used long distance a lot this past month.

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. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . I would have known I was paying too much. It hasn’t been increased at any time. how would anyone who might only have residential service even know to ask? Well. to begin now. Had you brought this to our attention before.10 per minute rate on your long-distance service. Customer representative: Let me pull up your account. of course it is not always possible to give existing customers some of the “offers” we have out. But I am able to offer you a $. (beginning to sound irritated. 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. But as a very good customer of yours. Mike. but this was quite a shock. 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 think you would have given me the best rate you offer new customers. and I also realize that if I had examined my bill closely. we certainly would have discussed your options. 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’s willingness to show a measured “flare of temper” brought results.Mike: I would imagine so. which should rightly be $50. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. The latter would not have produced the desired results.10 per minute. But I’m looking at a $500 longdistance bill. In doing so. but I am very angry with Over-the-Air Company. and I should be treated with more respect! I’m sorry. strategic anger and abusive behavior. after all. We certainly don’t want to lose you as a customer. but I can’t do that. The best we can do is fix the rate for the future. a long-time customer of your company. 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 $. If you can’t get me someone to talk to. between controlled. don’t think this is directed at you personally. He was walking a thin line. and I want to speak to someone in authority so I can terminate my service. (with a much angrier tone) Madam. however. controlled voice) I need to talk to someone who can do it immediately. 44 50 Practical Negotiation Tactics . I would hope that you would credit my account for this better rate for past service. I … (interrupting and in a stern. there’s no reason for this conversation to continue. Wait—I’ll get my supervisor. either. I am. she kept Mike as a residential customer as well as a business customer.

Where are your managers? Where is the training necessary to make Planning a Strategy 45 . 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. and you just can’t be too careful. and it’s getting old. they would become dissatisfied with their pay and want their base pay increased. and that they should be asking for a fairer base wage for the work they do for you. 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. They will be putting the plant AND their fellow workers at risk by not being here. The employees’ negotiator finally decided to use “indignation” to break the stalemate. Owner: Now. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. lesssenior employees might be at greater risk of injury because they have to handle explosives. The owner told the employees that he was worried that during the overtime shifts. On those overtime shifts. that’s just not fair. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. Working with fireworks is working with explosives. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay.

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

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

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

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

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

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. Preferred Provider Organizations (PPOs).investment decision or deal with an error in a bill. you gain an edge when negotiating a new plan for your company.” If you spend many hours learning about Health Maintenance Organizations (HMOs). he argues that she is the 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 . and Point of Service (POS) plans. and should therefore handle the problem. 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.

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

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

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

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

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

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

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

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

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

Carrell and Christina Heavrin. by Michael R. This is a practical starting point that will not anger the other side (and might even be expected). The negotiator firmly states that it is their best offer in an attempt to gain a nice. 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.000 22 23 24 25 26 27 Initial Offer $28. 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 Buyer Initial Offer ($21. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.500) Fig.750) Target Point ($24.500) Resistance Point ($25. 190–192. Adapted from Labor Relations and Collective Bargaining. 2: Distributive Bargaining Process. None is as important as the first one.000) Settlement Range ($22. such as proposing to continue at the current rate or price. Another common strategy is to start with the status quo. quick agreement.000) Target Point ($23. “Distributive” bargaining (“win-lose” or “zero sum”) is used. (2004). for example. Exchanging Initial Offers 61 . Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).500) M $21.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.750–$25. as illustrated in the following figure: Seller Resistance Point ($22. 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. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.

The settlement range is the distance between the resistance points. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. and is the range in which most negotiations actually occur. 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. 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. When the two parties agree to a price within the range. thus producing a true “win-win” negotiation.000 and $28. A target point is the desired settlement value a party has set as a goal when negotiations begin. it is termed the settlement point – not the “right price” or “fair price.” but the settlement price. each initial offer ($21. 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). usually. the other side does not agree to this value). In the example. these points have set the outer limits. thus starting out on a positive note. 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. After initial offers are exchanged. if the buyer’s initial offer was $25. 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). the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. See Tactic #18: Agree on Something As Soon As You Can. 62 50 Practical Negotiation Tactics . Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). the process quickly narrows to the range between the initial offers. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package.000.000) is reasonable.In this example.

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

Shelly. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. I guess the VFW will work.—that’s so “baby. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . Dad. Jerry from down the street is in a really good band that all of the crowd likes. And midnight is definitely too late. Your dad and I already talked about this and agreed that 20 guests would be the limit. alone. I think the band would be fine. (During the caucus. In fact. we could rent the VFW hall. we’ll call you when we’re ready. That would be great! It would keep everyone entertained. We could play records and you guys could dance.m.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. Time out! Dad. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. And they can’t go home at 10:00 p. That sounds like too many for here at the house. Actually. Oh. I think we can handle a few more kids—how about 35? And midnight sounds okay.” They would never expect a party to end before midnight. I’m sure we can ask them to tone it down a little. (with some irritation) I’m not sure. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. (excited) That would be so cool. and then the number of kids won’t matter. It’s special!!! Well. okay. We’ll get a band—everyone does. Mom! This is my “Sweet Sixteen” party. we need to talk.

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

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

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

I know.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. At a point late in the negotiations. But for this price. you don’t want your opponent to know what these things are.” Throwaway items are those things that hold little or no value to you. I can go to another dealer and get a green exterior—the color I like best. so be sure you present them in a way that suggests importance. but he makes a mental note to use color as a “throwaway” item. I’ll go get him. but … Salesman: But what? Hobbs: Well. However. Salesman: Let me talk to my manager.” Party B thinks that A has sacrificed one important objective to gain another. A has gained something of true value and given up nothing he values in return. but the key to making it work is to include the throwaways in an initial list of demands OR add it in at a strategic time. but in reality. when the two sides are only a few dollars apart. it’s a great car and a fair deal. you are making $200 profit over the true dealer’s cost. Mr. Hobbs. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . and noticed that none of the vehicles have a green exterior. this conversation takes place: Hobbs: Yes. Here’s how it works: Party A exchanges the item for something of true value. quickly checked the dealer’s inventory of sport utility vehicles in stock. not revealing that the item exchanged is a “throwaway. we’ve got expenses and we need to make some profit. Salesman: Well. Example 1 The buyer. according to the Consumer Reports listing of the cost of the vehicle. It is a useful tactic in any negotiations. Hobbs: Yes. according to my figures. He doesn’t really care about the color of the new vehicle.

Conclusion Mr. Miguel. Then we have a deal.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal.. Example 2 The office supervisor told the three internal sales representatives (Jenny. 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. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. The three are sitting at a lunch table to discuss the schedule. The days in question are: Exchanging Initial Offers 69 . Employees will be paid time-and-a half for each of these days. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker.. At the very end of the negotiations. I’ll take the red one for $100 less. and seniority will be used to determine who gets to choose the first day. Hobbs successfully chose color as a throwaway item.. 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 . Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). All three employees must agree to the schedule.no it’s not. The manager was convinced enough to sacrifice a final $100 for the throwaway.

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

When the girls decided it was time to talk about the estate. Anne and her sisters. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. and a collection of antique furniture. along with the cash.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. can indicate that something you think is minor is really a major concern to your opponent. and the stock and distribute the proceeds. for example. In addition. Example 1 When their mother died at age 82. For example. three ways. were faced with the task of selling the house and disposing of their mom’s personal belongings.000 with no mortgage on it. a house valued at $250. The estate’s assets included a checking and savings account totaling $450.000. The process of grouping items can be an educational exercise because the response to one party’s suggested packaging of items might reveal how the other party views the various items on the table. they met at the house. realizing that the total cost of a deal might make or break the agreement. The house and much of the furniture has been in the Exchanging Initial Offers 71 . the antiques. one might package all of the financial issues in one group and negotiate on that package as one issue. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. their mom left specific pieces of jewelry and art in the will to each of the girls. we need to sell the house. The house was closed up at the time of their mother’s death because she had been in a nursing facility for a couple of months. Anne: As I see it. it is often helpful to package the items in distinct groups and then deal with each package separately. 300 shares of stock in a pharmaceutical company. but I’d like to talk about the house and the furniture. Autumn and Angela. A reluctance to include one particular financial item with other financial issues.

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

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

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

You can also make an effort to agree on something your opponent offers early in the negotiations. You signed those papers. no matter how insignificant. Exchanging Initial Offers 75 . sets the stage for mutual respect and communication. Kathy was asked by her employer to relocate to another city. and both have good jobs. Kathy’s first job paid more than Tim’s because she had a graduate degree. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. and might not even be able to keep the house. are divorcing. They met and married in college. because Tim felt that Kathy had taken advantage of him during the marriage. They have no children. rather than disposing of assets. Example 1 Tim and Kathy. It was her idea to buy the house and go into debt to furnish it. Now. after a brief marriage. and that you are entering into the negotiations with the intent to reach agreement. too. It indicates to your opponent that you are a reasonable negotiator. Tim worried that he would be stuck with all of the debt. Kathy borrowed more money to go to graduate school full-time. without suggesting any changes or modifications. and she agreed. They had also furnished their house on credit. An initial agreement. The discussion might become very heated. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. The couple hoped to do the divorce without involving lawyers in order to save money. They were in the middle of buying a house. Their “property division” was mostly about dividing their debts. Tim began working right after graduation. Tim: You might be leaving town. with her promotion sending her out of town.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately.

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

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

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

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

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

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

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

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

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

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

but you feel cursed because you gave away too much.e. 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. think things through before you make or accept the first offer. Avoid giving away too much at the outset.000—what they paid for it. 2) Start out with an old number.” The perfect first offer. because you have settled quickly.000 two years ago. 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. or 3) Make an unrealistic offer (i. which can be very useful). of course. Sue: Let’s offer $325. We don’t know how anxious they are to sell or if they know the market. That’s a fair price. The sellers must be willing to come down a few thousand … Sue: Well.000.000 and $337. offer $150.000 for a house that sold for $185. 86 50 Practical Negotiation Tactics . then $320. particularly if you don’t know the other party’s “settlement range.000 this year. Jay: No. The other party will probably come back with an equally ridiculous offer. such as last year’s price. Their realtor told them that it sold for $290. Let’s low-ball them and offer $290. and you cannot withdraw it in good faith.000 three years ago).) To prevent this from happening. at minimum cost.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.000. Jay: No. and that two similar ones on the same street sold for $330. and houses in this area sell fast. thus requiring greater concessions on both sides. They found one they both like that lists for $325.” (You have won a settlement. is the most (or least) the other side will accept. before someone else does. never give them their asking price..000. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.

was very impressed with their presentation. but who knows what they are planning on offering. they had offered $325. the sellers obviously would have accepted and Jay and Sue.000.500—half the difference! Sue: Great. Both parties felt that they made a good deal.) Bob: I’d do it for $3. Exchanging Initial Offers 87 . Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. Lyle Foxworthy.000.Sue: Don’t be crazy.000 total. as requested by the human resource director. then let them make a counteroffer. 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. the company president. realizing they offered too much. since they had already bought another house. If.000 for each of us—$6. (Bob and Frank meet privately to discuss the situation. They outlined how they would develop a new employee performance-appraisal system. I can’t tell our realtor $290. The buyers were very motivated to sell. and the offer was based on fact: the prior negotiated price. Give us your lowest price. Sue: Then you do it. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. (the next day …) Jay: They made us a counteroffer of $307. as Sue had first suggested. That’s an insult! Jay: Well. Frank: Me too.

Lyle: Okay. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. I’m out of time. We’ve waited long enough. but we know you must have an amount budgeted for this and we are willing to do it for that amount. That is all that’s left in this year’s training budget. They also ended up getting three times ($18. We’ll do the job. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. What’s the cost? Bob: We want the job. but we can’t pay more than $18.000.) Lyle: Okay.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. and you two come highly recommended. Bob: That’s fair.000) their minimum price of $6. and it would not apply.000. 88 50 Practical Negotiation Tactics .

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

Dad: Wait a minute. except when you’re negotiating. 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. Jerry had already started his summer job. We have four options. Option 1: No family vacation. Option 2: Mom and I go before Jerry leaves on August 1. Here’s the discussion that followed: Mom: Well. while it may be your best option. Jerry will be here. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. I don’t want to give up on a family vacation that quickly. gives your opponent little maneuvering room and might even prolong or damage the negotiations. 90 50 Practical Negotiation Tactics . Sydney. Jerry pointed out that he is expected to work until July 31st. completed his first year of college and came home for the summer around the middle of May. Proposing only one solution to a problem. Proposing multiple ways to reach your goal can get you to the same place. Dad. finished his freshman year of high school at the beginning of June. In mid-June. 15. so you can go without me. it looks like we can’t really plan a vacation for all four of us.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. 19. what say you. Example 1 Jerry. their parents began discussing a family summer vacation. Let’s see what we can work out. 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. 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. His brother Sydney. and quicker. He planned on being home for one last week before having to pack up and go back to college. The week he would be home would be the first week of school for Sydney.

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

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

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

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

which takes another $3. These are all permanent immediate needs.000 $1. that makes sense.000 $2.500 $5.000 $5.500 left.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.000 $500 $1.500 $2. Making Counteroffers (The “Give and Take”) 95 .000! Brooks: Good. Maureen: No. Can we split it evenly? Brooks: Okay. We have $1. and we both get things we want. which I’d like to keep in the bank.000 $3. I’d like to spend some of it on lighting upgrades.500 $500 $1.200 $200–$2.# 1 Sod Item Cost $1. $750 for lighting and $750 in the bank. I’ll trade your sidewalk and trees for my whirlpool bath.

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). finally agreeing to split the difference on the remaining amount (distributive items). Drug-Testing Program 96 50 Practical Negotiation Tactics . Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. Profit-Sharing 5.Conclusion By taking the time to list all the items each person wanted and their cost estimates. All items to be negotiated and their desired outcome for each item were put in writing for review. management and union negotiators found that a “winwin” approach to negotiations worked well. even in difficult years. This year. Pension Increase 3. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. Length of Contract 2. both sides exchanged lists of initial demands at their first meeting. The combined lists total thirteen different items: Desired Outcome No. During that time. Wage Increase 4.

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

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

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

and that’s it. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . Under ABC ‘s contract with the union. and that’s not negotiable. Under the restructuring. No agreement was reached. curfew on TV and other noise every night. The union contract required that management renegotiate this change in the grievance procedure with the union.m. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. The appeals procedure would have to be altered to reflect the restructuring. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. 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. b) written complaint to a floor manager if the matter is not resolved in 5 days. 10:30 p. midnight during the week is the only thing I’ll consider. but changed his mind when he saw Jasper’s attitude. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Rob: (there is no hesitation in this voice) No. is all I’ll consider. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. and the union foreman would report directly to the plant manager. and d) a hearing with company owner if the matter is not resolved in 20 days. Jasper: Midnight.m. the positions of non-union crew leader and floor manager would both be eliminated. I want a 10:30 p.) Listen.

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

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

They flipped a coin to see who “got” them and the new baby this year. Sue’s sister Nancy called her to talk her into coming anyway. one sister. Making Counteroffers (The “Give and Take”) 103 . we’ll get to our side. Nancy: Sue. and ten nieces and nephews) always ate around 5:00 p. If you are flexible. and do not dismiss something said by your opponent just because it came from the opponent. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. They’ve done the research. Even before the baby’s arrival. Be open minded. their spouses. and at least five aunts and uncles) ate around 7:00 p. Next year. two sisters.m. four brothers. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. and now have a new baby girl. Sue’s family (parents. and identified the range of options they feel comfortable with negotiating. Example 1 Sue and Bill have been married four years. you can adjust your demands or goals to include such new ideas. it’s just too much to do both.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. the Thanksgiving marathon caused problems: They would have to leave Sue’s family’s celebration before the “traditional” after-dinner trivia games (which Sue really enjoyed). two brothers. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. The couple used to have Thanksgiving dinner at both families’ homes. Bill. and we’re really not able to enjoy either one.m. But after the negotiation gets started. established goals. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. Bill’s family (parents. Bill’s family won. 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). Mom says you. Sue: Yes.

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

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. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. but we can’t fund all of the $12 or $15 million. a non-profit organization for orphaned children. City officals: We can probably give you the land for free. depending on the cost of the land. They are meeting with the city to ask that the land be donated by the city for the project. we’re committed in theory. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. Kids’ Home: As you know. the interest income of around $6. the foundation’s regular annual grants come to roughly half of their available funds. Each year. Foundation officals: Oh. but the principal of the fund can’t be touched. Kids’ Home hoped to get $500. City: Can’t you borrow the money from a bank to build the facility.000 a year for operations.5 million is available for distribution to numerous charities. We need the city’s help by allowing us to get the city land donated to us (for free). Estimates for building a new orphan home ranged from $12–$15 million. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . Kids’ Home: That’s why we brought the foundation’s officials with us. The foundation has a substantial endowment fund. Unfortunately (for Kids’ Home). but we need some assurance that you will be able to build and operate the orphan home at that location.Example 2 Kids’ Home.

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

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

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

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

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

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

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

Example 1
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.

Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.

Conclusion
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.

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Example 2
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.

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Conclusion
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.

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Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.

Example 1
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-

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

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

Unfortunately. She was determined to hold her ground for at least a 13% pay increase and a promotion. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. Susan: I hope so. received a glowing report from her boss on her job performance. Example 1 Susan. inviting a response. Here’s how the negotiations went. After a few minutes of silence. 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 for the other side says nothing. and 118 50 Practical Negotiation Tactics . but one side comes back with a non-negotiable demand. nearing her third year with the company. I very much appreciated the fair job performance review you gave me. You know my commitment to this company. you are a valued employee.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. Susan: Mr. If his opponent cannot agree to the demand but does not want to end the negotiations. the promotion had not yet been approved. This should have resulted in an automatic promotion and a sizable pay increase. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. 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. 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. he can make an open-ended statement. It was 16% less than she had been led to believe she would be getting. I think you would agree with me that I have performed well above expectations this past year. Jones: I certainly do. I have to tell you that while I appreciate what you have done for me. Jones.

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

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

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

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

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

The pilots want dependent coverage paid for by the company. and we know that with this new contract term of five years.000 (which we reasonably should have expected to pay in premiums) in the pension account now.000. then the pension benefits overall will increase by $10.000. we know that health insurance premiums might skyrocket.000 to cover the premiums for dependent coverage.000. The projections for the next five years were that these costs would increase to about $1. With long-term planning and investments. Over the next five years.000 figure. This would be a better benefit in the long run. and the premiums for health care just keep going up. This is just a cash-flow problem that your members have to understand.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. the airline paid a total of $200. Company: This could not come at a worst time for us. dependent coverage could cost us $1. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. you are taking a risk on the costs increasing. what they really need is for you to cover the costs of dependent coverage. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.000 a year over the next five years? Company: Yes. Over the last five years. with all wage and operations issues resolved fairly early. Pilots: Look. 124 50 Practical Negotiation Tactics . The airline industry is in a slump. that would be the minimum increase.000. as it has always been. And we cannot afford that $1. But only a few of our people are close to retirement age.000. The company wants to trade paying for dependent coverage for better pension benefits. the company can make your pensions much better. If we invest the $200. However. and are willing to keep pension benefits the same.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. As best as we can tell.000.

Company: If the company spends the $200. It initially believed that the only option was to put that money into pension benefits.000 available. The pilots expanded the range of options. can we agree to a year-to-year agreement on dependent coverage. 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. we are. if they were that high. however. so the decision to be flexible was a good one. by agreeing to let the company cap its exposure for dependent health coverage. The dependent coverage is more important to us now than the pension benefits. If we can get two or even three years out of the $200. then those funds will not be available to invest in the pension plan. The health insurance market stabilized.000? Once the cap is met. The $200.000 actually carried them through four years. the company will not be expected to give us this benefit. Conclusion The company was committed to limiting its exposure to $200. with a cap of $200. that would be worth it.Pilots: But you do have the $200. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes.000. and the pilots knew what to ask for when the contract expired.000 the first year on the premiums.000 to either pay one year of the premiums. or invest in the pension plan? Company: Yes.

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

(looks at the numbers) That looks good.000 down. Sure.000 price into “slices” the buyer thought reasonable.00 per month.” she had him—she worked around the $300 slices. down payment. but what else must I buy? Only the basic service for $8. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. But my neighbor pays $39. You can do that. I can’t discuss another client’s account. Instead of a three-year lease. Making Counteroffers (The “Give and Take”) 127 . and payout slices to reach the total price she wanted.Buyer: I don’t see how you can do that. with your car and $6. as promised. do you want Disney? Yes. do you want HBO? How much? $5. but let me see the numbers. Great! So.” She decided to cut the $45. Let’s see. Saleswoman: Simple.99 per month. you can get the Disney channel for only $5. it will be a five-year lease. and added the trade-in. I can’t afford that much.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. I can afford $6.00 per month for your service. Once the buyer volunteered that $300 was an affordable “slice. can’t you? Buyer: Yes.00 per month.

00. Okay. That’s another $5. 2? How much? $8. What about the music package? Yes. Disney is for the kids! The sports channels are for me. 2. The total is $38.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.00! Why? Because he judged the per-slice price to be reasonable.00 per month was far too much. 3. But that’s all! Then we’ll hook you up on Monday. I really want the sports channels. we had that before. Great. instead of one total amount. Any other kids’ channels? Yes. but he agreed to six “salami slices” for a total of $38. That’s $5. they asked about the Cartoon Network. Conclusion The owner thought his neighbor’s service at $39.00 per month. Yeah.00 a month. and my wife wants the old movies. and SI 1.99 per month. Thanks. and probably felt much better about the total negotiated package because it was presented in modest individual slices. 128 50 Practical Negotiation Tactics .

Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. and it can destroy your credibility.m. but in tense. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. angry negotiations. For example. A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. which can be successful if the opposing team has two or more members who hold different views of an issue. 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). and the use of humor. the traditional car salesperson might tell the buyer. turned off by the tactic. Tactic #33 (The Bluff) is a classic pressure tactic. so are you ready to make a deal? This might convince a few buyers. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). pressure tactics should probably be avoided. In some cases. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. Applying Pressure 129 .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. It should be used with caution: It can end negotiations immediately. however. Humor might not look like pressure. but it can be used effectively when one party clearly has an edge. today. “I can only guarantee this price until 6:00 p. but others will walk out the door. When both sides believe that each has equally strong positions. it is effective.

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

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

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

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

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

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

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

Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.

Conclusion
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.

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Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.

Example 1
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her

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idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance

Conclusion
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.

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

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the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.

Conclusion
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.

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

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

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

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

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

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

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

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

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

Cory:

You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)

Conclusion
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.

Example 2
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.

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Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!

Conclusion
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.

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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.

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

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. The owner and a small group of neighbors met to talk about these problems. The owner decided to try for a variance. neighbors became concerned about the changes to the mall. 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.” No. Conclusion The children stayed inside and played dress-up. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. or apply for a variance. you can come back in and play “Prince and Princess. the parking lot will start to look trashy. C. Mr. We want to play dress-up and then color. however. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. When his variance application was made public. We don’t want to go outside. According to the city’s zoning laws. failed to offer the children something that was as important as the plans they had made. C. and teenagers attracted by Making Progress 155 . They did all the compromising they were willing to do. the owner had to supply additional parking. and they still had time to color. 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.: Julie: Hey.

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

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

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

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

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

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

He asked his elder daughter about the arrangement. threats. She borrowed a tape recorder so she could ask her father if this was a fair deal. are talking about a possible settlement of the issue. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. South Carolina. had $40. Fred Adams.00 to spend. but Susan had only $20. Alexis knew this was not fair. The two sisters had saved up a little money so that they could buy souvenirs. were on vacation with their parents in Myrtle Beach. Somehow. who was disappointed to hear that she might propose such a deal.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. or simply “bad faith” methods have been used by the other party. Example 1 Susan. Susan denied it. the accused. Conclusion For the first time in her life. the younger sister. and Jones. The effect on the other party might be even more substantial if lies. 162 50 Practical Negotiation Tactics . Alexis then played the tape for her father. Susan repeated her demand. and Alexis. age 15. or used to pressure the other side to agree to certain demands. Alexis. Alexis agreed. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. age 14. thus becoming a source of embarrassment. Michael Wood. Then he played the tape. They might worry that the tapes will be made public or given to others. until Susan said they would evenly split what they bought. Jones’s supervisor.00. Susan understood the impact a tape recording can have when it reveals a lie. this time in front of a hidden recorder. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. the investigator.

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

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

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

and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics .Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. and both men were happy with the arrangement. Archie chose the parcel with the three lakefront lots.

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

At the end of negotiations. This experienced bargainer said. 168 50 Practical Negotiation Tactics . the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. “Okay. we’ll agree to Health Plan A with another ½ cent on the pension fund.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. it can be a dealbreaker. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. In one case. If one party misjudges the situation. so be prepared to withdraw the nickel and dime item at the hint of trouble. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan.important item.

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

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

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

but the right facts presented at the right time can chill or astound and completely turn things around. $229. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Sam Jones.500.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. I’ll get back to you. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. but we feel that it’s a fair offer.000.000. the other party will ignore or refuse to believe the information.000. What? That’s $35. but the key is to gather facts that you might need—not just the facts that you will need. $235.000.000 under the listing price! We realize that. 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. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. and we are countering with an offer of $250. We love your house. has owned the house for 24 years and is downsizing to a condo.000. They sold for: $225. $237. (Next day) We’ve reviewed the records you’ve produced. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. and $237. This offer is for more money than any four-bedroom houses on this neighborhood list. but you’ve priced it way too high. They believe it is overpriced.000.000. Sometimes. The owner. Here’s a list of the five that are about the same size as yours.

I’ll get called on the carpet. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. The last 20 were over $2. Example 2 Supervisor: You know the policy. who was not particularly knoledgeable about real estate. and did his homework. and we know that only this model will meet our needs. We’ve talked with purchasing and we have the authority to buy seven for $2. Here it is. if other departments have ignored the policy.400 each.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. I’ll be… Okay. I asked for a list of all new PCs bought this year. He found facts that supported his position. No one can go over $1.600 for a computer. let’s not worry about it. Conclusion The Joneses had based their asking price on the advice of a friend. Hatfield: My staff has done a lot of research. Well… We have a written counter of $245. Supervisor: If I okay this purchase order. and wisely chose exactly when to present them in order to make his point.600 unless the company president approves.000 each. Supervisor: Well. Hatfield: While I was at purchasing. We accept. Making Progress 173 .000. Conclusion Hatfield had anticipated what his supervisor’s position would be. Order the new computers. That’s the bottom price. You can’t pay more than $1.

Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. yes. I can’t check out these four books? Jenny (Librarian): That’s the policy. I can do that within the rules. A maximum of three books can be checked out to a person at any one time. 174 50 Practical Negotiation Tactics . and two are for my husband. Example 1 Maureen: What. Maureen: Well. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. The effective use of probing questions can help achieve a favorable settlement. reveal misperceptions or lack of knowledge about positions that can be corrected. I trust you. but you don’t want to jeopardize your job? Jenny: Yes. Would I do that? Jenny: Maureen.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. If you trust me. but I don’t set the policy and I can’t make exceptions. I’m sure you would not. I want two of these. Maureen: Well. But I can’t break the limit rule—it is an absolute rule here. and they would all be unavailable to others. Maureen: So you trust me with the books. Maureen. They can help you identify or better understand what the other side really wants. can you check out two on a card for him? Jenny: Well. some people would have forty or fifty books out at the same time. Otherwise. you know me.

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

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

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. hours. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. In this process. or even months after the first offer is presented. and the classic Walk Away (Tactic #48). If friends or neighbors need to settle something but prefer to avoid the negotiation process. They bring it out when a dispute arises. this process can easily result in a final settlement. T Reaching Agreement 177 . 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. 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. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. days.Stage 7: Reaching Agreement he final stage! It might come minutes. When multiple issues are at stake and most have been agreed upon during negotiations. this tactic can produce an agreement. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. and the child learns an important lesson about life. When two parties believe they have an oral agreement.

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

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

knowing that it will probably be agreed to in order to continue in the euphoria of the moment.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. However. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. 180 50 Practical Negotiation Tactics . The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.

the following exchange occurs. Jay. too. You bought your wife a new van just last year. or go after you and perhaps make a new concession in order to get you back to the table. Your opponent will have to either let you go and run the risk that things are really over. I don’t want to negotiate. and he can simply buy it when the lease expires. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. a veteran salesperson. here are your keys. Whether you are really bluffing or you are serious. all from Sue Wilson. but his Avalon has been a good car. what can you do on a 36-month lease? Reaching Agreement 181 . Sue: Let me get you the keys so you can take this one home overnight to see how you like it. (Vahaly drives the new Highlander home. My name is Jay Vahaly. He stopped by Pembroke one day to look at the new models. Sue: I remember you. but I thought I might want to try a new Highlander. You had time to assess my car. Jay. I’ve worked with you before.) Jay: Sue. and the lease on my Avalon is about to expire. but my Avalon is a good car. if I roll over the lease to a Highlander.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. I like it. He really likes it. Sue: Well. Jay: Hi. The next morning. right? Jay: Yes. how did you like it? Jay: Okay. be sure you think this through beforehand.

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

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

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

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

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

They saw the “For Sale” and “Open House” signs. not the furniture. They were not the only couple to come to the open house.000. We’d like to make you an offer of $150. Bill: Reaching Agreement 187 . seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. The owners were selling the house without a real estate agent. Seller: Yes. They finally looked at a house they really liked. and felt that they would have to work fast to make an offer before someone else did. During a discussion. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. 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.000. all the usual stuff in a sale. Seller: We’re asking $152. however. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. Obviously. they looked at this particular house on their own. and decided to stop by to see if they liked the house.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. Example 1 Bill and Paulette had been house-hunting for some time. and one of the other couples looked very interested. and while Bill and Paulette had been using an agent to help locate houses. Bill pulled the seller aside. everyone is busy grappling with the details of the negotiations. Bill and Paulette fell in love with the house. At the very least. If we shake hands on it right now. we won’t be involving our real estate agent.

and that the problems with her job performance were. In the section for fixtures and miscellaneous items to be left on the property.000. and two area rugs. the hutch. When he had the chance to put the deal in writing. Example 2 Monica brought a sex discrimination charge against her employer. and had been prepared to drop his price to $145. In her complaint. real. he listed the stove. all window blinds and drapes. Bill: (pleasantly surprised to learn that the garbage disposal. then we have a deal. the house is yours. and the two area rugs. but I’d like to make sure there are no misunderstandings. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. I think we can work something out. the refrigerator. Sign here. and when she refused. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics .Seller: Just a minute. since he probably would have missed them) Yes. she said that her supervisor had repeatedly asked her out.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. he listed an attached hutch in the kitchen. If it’s what you meant. Seller: Okay.) Seller: So. he left the price at $150. look this over. Under the section for appliances to be left on the property. The supervisor pointed out that he had a staff of 20 or so women. in fact. a public agency. The supervisor assured the employer that there was no basis for her complaint. Let me just get the standard “offer of sale” form and fill out what I hear you saying. (The seller recorded the offer of $150.000. and the two area rugs were specifically included. Conclusion The seller had always intended to leave the garbage disposal. that’s what I meant. the hutch. he began to have “problems” with her job performance. and the garbage disposal. It worked.

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

Monica accepted the $200.000.000 and the conditions of the offer. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. 190 50 Practical Negotiation Tactics .000. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 when all that was asked for was $100. It was made clear that the employer had paid the additional $100. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. to his disadvantage.000 just to get the employee to “withdraw” the complaint. There was a confidentiality agreement.She: authorized to pay $200. I’ll take your offer back to her and let you know. but word did get out that a public agency paid $200.

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

When communication is limited to the spoken word only. sounds. seek information. a couple of months away. 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. or express a thought or emotion through words. Who isn’t excited about buying a brand new SUV or truck? Until.Communication is a process that involves a sender and a receiver. that is. 192 50 Practical Negotiation Tactics . 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. His mom could more easily enforce the agreement if she had it in writing. you have created something tangible that can be referred to in the future when memories become fuzzy. the message being conveyed and received might be understood differently. pictures. The receiver has to decode the message being sent by trying to understand and interpret the words. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. 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.944. If Jason fails to live up to his side of the deal.” In Tactic #14 (Don’t Always Hide Your Weaknesses). In Tactic #4 (Use Objective Criteria). he can be reminded of the details because it’s all there in black and white. The sender wishes to convey an idea. And because the sender and the receiver are two unique individuals. the price is spelled out in the loan document as “twenty-two thousand. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. When you create a written record of the details of an agreement. nine hundred and forty-four dollars—$22. or movements. pictures. sounds. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement.

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

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

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 .

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

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

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

and Public Personnel Management. Carrell is Dean of the College of Business at Northern Kentucky University. and served as President of the Board and Mayor Pro-tem for three terms. Labor Law Journal. HR Magazine. Organizational Behavior and Human Performance.A. M Christina Heavrin J. and MBA and B. In addition. Personnel Journal. Bakersfield. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. and the University of Louisville. During his academic career he has received awards for both outstanding research and teaching.ABOUT THE AUTHORS ichael R. In addition to negotiating numerous litigation settlements and contracts. and negotiations.D. he was elected to the City of Louisville Board of Aldermen for five terms. Carrell has held academic positions at California State University. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. The Academy of Management Review. Personnel. Human Resource Management. Morehead State University. Books published by Dr. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. The Journal of Accountancy Training. which is located in the greater Cincinnati area. The Personnel Administrator. Business Forum. Carrell are in the fields of collective bargaining and labor relations. He received his doctorate from the University of Kentucky. organizational behavior. Dr. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. in Economics from the University of Louisville. The University of Nebraska-Omaha. Marshall University. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 .

the City and a for-profit hospital for guaranteed indigent health care services for city residents. Ms. Jefferson County. 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. 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.park and a successful industrial park in the City’s enterprise zone. an agreement between the State of Kentucky. 202 50 Practical Negotiation Tactics . a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. Recently voters approved the merger of the City of Louisville and Jefferson County Governments.

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