SECTION I: INTRODUCTION

Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.

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

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50 Practical Negotiation Tactics

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

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Unfortunately. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement. with neighbors. • A co-worker asks for volunteers for a new project. they pay the sticker price. • A child wants a new toy now. Instead. with family members. But if you scored 8 or less. or engage in an unproductive argument. at a flea market. but many of us miss the opportunity to bargain in other situations. exactly. few people understand that normal interactions represent bargaining opportunities. Who. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven.negotiator! Pass this book on to someone else who needs it. practical tactics useful in real-life situations at work or at home. accept what is given. 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. some will in retrospect even remember being the victim of one or two of them. Most readers will no doubt recognize some of these strategies. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. such as these: • You receive the wrong order at a restaurant. 4 50 Practical Negotiation Tactics .

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

6 50 Practical Negotiation Tactics . Keep this book handy when preparing for any type of negotiation. the facts. but I believe it adds value to our house. 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. negotiations can be concluded with a written or oral agreement. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations.time to look over this performance review and respond point-by-point. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. and meet with you again. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated.” To a neighbor you can say. and use the forms in the back to identify the issues. the other party will realize that you intend to negotiate and do not accept the situation. “I see why you want to cut down the tree. the parties and their interests. Once a settlement is reached. and the tactics that might move the negotiations along.

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

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

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

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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

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50 Practical Negotiation Tactics

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

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

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notified all the employees of their intentions. and final offer. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. and it now employs 230 craftsmen. was a power play. 16 50 Practical Negotiation Tactics . When negotiations with the union became hopeless. but rather what the buyer planned to do with the car. as Harvey had for many years. best. and equipment. 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 Jaggers decided to seek buyers for their land. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. For the past two months. as a last resort. inventory.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. The Jaggers gave the union their “last. In this case. The $56 million dollar business took them 30 years to grow. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. The union is demanding wage and benefit increases. The owners. The union negotiators convinced the employees that this too. selling became an attractive alternative to a strike or prolonged battle. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. his BATNA was not to hold out for more money. They learned that their assets would be easy to sell and were worth more than originally estimated. The threatened strike became a reality. The union negotiators thought the Jaggers were bluffing. With only two weeks remaining before a threatened strike. providing them with a very good income for life. Conclusion Selling their business was the Jaggers’ BATNA.” which was refused.

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

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

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

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

they control the breaks and environmental factors. (Think of the showroom tactics used by car dealers. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. Bailey: Cybil: Preparation 21 . and go play somewhere! Cybil: Well … Okay. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. the frog is everybody’s favorite. Cybil. and so on.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. Make up your minds. such as a hotel conference room. I like the frog. girls. (thirty minutes later) Bailey: So. they have the information they need at their fingertips.) Let’s take all our Beanie Babies to my house to trade! Okay. Mother: Hush. too. it’s a deal. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking.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. 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.

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

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

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

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

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

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

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

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

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

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

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

The buyer loved the location. and the buyer was able to completely renovate the house and still have a great deal. For example. but the inside was a complete turnoff. half-serious. His teenage sons had “trashed” the house. two people on the team will be more successful because they evoke different emotions from the other side. with “All right. 34 50 Practical Negotiation Tactics . 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).side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. the seller’s agent called the buyer about the property. If there is a significant weakness in your position. By assuming opposing roles. The agent explained that the seller was desperate. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). The desperate owner agreed. let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country.” The agent took the offer to the seller. The buyer said he wasn’t interested. “Please make any offer—they are motivated!” The buyer responded. I offer half the asking price. Weeks later.

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

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

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

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

Peggy: I assumed they went with the mower.200! We should get $1. I don’t know what the deal is now. so I’ll take it. Andy: I want them… Paula: Go ahead and take them. I can use them. etc. Andy and Paula: Yes. Paula: Go ahead and ride it home. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Andy: No. Peggy. Andy and Paula. what’s your price? Andy: $1. angry. And take the leaf-catcher attachment and the gas can.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Peggy: I’m hearing one thing from Paula and another from Andy. I want to keep those. I’ll go home and you can call me if you two can reach an agreement. Peggy: Planning a Strategy 39 . since they are sitting out in the driveway with it. Half what it cost us new. we won’t need it at the new condo. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. and I know how you take care of things. threatening. (bad guy) and implies that his or her side will hold firm on their demands. while another acts difficult. Example 1 So. not for $1.200.400 if the catcher and can are included. Peggy: So. only three years ago. Peggy: That’s fair. Andy: No. I heard that you want to sell your riding mower. They cost about $300. you’re really moving! I hate to see you leave.

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

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

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

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

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

They will be putting the plant AND their fellow workers at risk by not being here. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. The owner told the employees that he was worried that during the overtime shifts. lesssenior employees might be at greater risk of injury because they have to handle explosives. Working with fireworks is working with explosives.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. and that they should be asking for a fairer base wage for the work they do for you. On those overtime shifts. and you just can’t be too careful. 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. The employees’ negotiator finally decided to use “indignation” to break the stalemate. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. I’ve got to have the employees with the most experience to protect this place. they would become dissatisfied with their pay and want their base pay increased. Owner: Now. and it’s getting old. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. that’s just not fair. and it’s not what we’re even talking about. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks.

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

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

I’ll pick it up tonight. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book.Susan: Mike: Well. Thanks for making this last step as easy as possible. Both came to Raiffa to help negotiate a settlement. Lectures on Negotiation Analysis. and then decide how much more “emotional value” it held. Two business partners had been working together for ten years to build a successful business. to submit a sealed offer to buy/sell the business sixty days from today. They thus were able to determine the highest price each was willing to pay for it or receive for it. They accepted his suggestion to use the “reciprocal buy-sell strategy. which will bind us to the outcome. You will both agree. 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. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. I choose to buy it. Both sisters felt that the process enabled them to resolve the issue fairly. After I open the 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). Here is my check for $800. (sixty days later) 48 50 Practical Negotiation Tactics . in writing.” Howard: Since in this case you are talking about a multi-million-dollar business. I suggest a slight modification to the process.

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

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

Preferred Provider Organizations (PPOs). 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. you gain an edge when negotiating a new plan for your company. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. he argues that she is the expert. and Point of Service (POS) plans.investment decision or deal with an error in a bill. and should therefore handle the problem.” If you spend many hours learning about Health Maintenance Organizations (HMOs).

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

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

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

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

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

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

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

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

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

Another common strategy is to start with the status quo. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. This is a practical starting point that will not anger the other side (and might even be expected). Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000) Settlement Range ($22.000) Target Point ($23. for example. “Distributive” bargaining (“win-lose” or “zero sum”) is used. as illustrated in the following figure: Seller Resistance Point ($22.750) Target Point ($24. None is as important as the first one. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. Carrell and Christina Heavrin.000 22 23 24 25 26 27 Initial Offer $28. quick agreement.500) Fig. Adapted from Labor Relations and Collective Bargaining. such as proposing to continue at the current rate or price. 2: Distributive Bargaining Process. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.500) M $21. by Michael R. 190–192.500) Resistance Point ($25. Exchanging Initial Offers 61 . The negotiator firmly states that it is their best offer in an attempt to gain a nice. (2004).750–$25.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.000 Buyer Initial Offer ($21.

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

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

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

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

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

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

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

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

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

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

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

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

Also. Executive Director: I think it’s a good idea to group items together. Employees: Okay. Let’s get started. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. Wages should not include merit pay raises. 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. 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. Executive Director: Well. to be honest with you. Executive Director: Sounds like a good agenda. 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. as well. Later negotiations were difficult. paid leave times. but I’d change your list. tuition benefits. 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. we are an agency supported generally by public funding. I think it also makes sense to include tuition benefits in the Working Conditions category. the paid leave categories are pretty clearly defined. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. I would include that under the Working Conditions category. that makes sense. 74 50 Practical Negotiation Tactics . but the parties were able to come to agreement because the wage issue had been resolved.efits (health insurance.

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

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

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

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

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. period. we’ll sell it to you. Ann: That sounds great! I don’t want this to affect our friendship. we plan on selling our Ford tractor when we move. Okay? No quibbling. Why don’t you give me a price? Colleen: Oh. Jeff spends many hours mowing the yard every week.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. Example 1 Colleen: Ann. Exchanging Initial Offers 79 . Ann: Well. You must mean what you say and be prepared to walk away from an unacceptable offer. What do you want for it? Colleen: Well. I don’t have any idea. consider using the “First and Best” tactic. we paid $5. The “first and best” tactic enabled them to settle the matter easily. We plan to put an ad in the paper next week. and it came with the bush hog and the leaf pick-up. Ann: Thanks! We really need one. no hard feelings either way. 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. 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. 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. and even more hours in the fall picking up leaves. I don’t want to quibble.000 for it six years ago.

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

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

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

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

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

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

Jay: No. 86 50 Practical Negotiation Tactics . think things through before you make or accept the first offer.000. They found one they both like that lists for $325.” (You have won a settlement. The worst first offer is the one that is so high or so low that the other party jumps on it immediately—known as the “Winner’s Curse. is the most (or least) the other side will accept.000 and $337. We don’t know how anxious they are to sell or if they know the market. The other party will probably come back with an equally ridiculous offer. Their realtor told them that it sold for $290.000—what they paid for it.000 two years ago. Let’s low-ball them and offer $290. Jay: No. thus requiring greater concessions on both sides. That’s a fair price. such as last year’s price. offer $150. and you cannot withdraw it in good faith. which can be very useful). then $320.000 three years ago). at minimum cost. never give them their asking price. of course. because you have settled quickly.” The perfect first offer. 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.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer..000. and that two similar ones on the same street sold for $330. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. before someone else does.000 for a house that sold for $185. Sue: Let’s offer $325. The sellers must be willing to come down a few thousand … Sue: Well. but you feel cursed because you gave away too much.000 this year.e.000. Avoid giving away too much at the outset. particularly if you don’t know the other party’s “settlement range.) To prevent this from happening. 2) Start out with an old number. and houses in this area sell fast. or 3) Make an unrealistic offer (i.

If.000. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Give us your lowest price. since they had already bought another house.000 for each of us—$6. as Sue had first suggested. I can’t tell our realtor $290.Sue: Don’t be crazy. Both parties felt that they made a good deal.500—half the difference! Sue: Great.000 total. they had offered $325. the sellers obviously would have accepted and Jay and Sue. (the next day …) Jay: They made us a counteroffer of $307. Frank: Me too. (Bob and Frank meet privately to discuss the situation. the company president. 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. That’s an insult! Jay: Well. as requested by the human resource director. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. was very impressed with their presentation. Sue: Then you do it. and the offer was based on fact: the prior negotiated price. then let them make a counteroffer. The buyers were very motivated to sell. but who knows what they are planning on offering.000. realizing they offered too much. Exchanging Initial Offers 87 . Lyle Foxworthy.) Bob: I’d do it for $3. They outlined how they would develop a new employee performance-appraisal system.

That is all that’s left in this year’s training budget.000. but we know you must have an amount budgeted for this and we are willing to do it for that amount. What’s the cost? Bob: We want the job. We’ve waited long enough. Lyle: Okay. 88 50 Practical Negotiation Tactics . They also ended up getting three times ($18. Bob: That’s fair. I’m out of time.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room.) Lyle: Okay. and you two come highly recommended. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. We’ll do the job. but we can’t pay more than $18. and it would not apply.000) their minimum price of $6.000. 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.

seeing no common ground. and attorneys use tried and true tactics in giving and receiving offers. but possibly of different values to your opponent. be prepared to divide an offer into smaller ones to make it appear to be more reasonable to the other party (see Tactic #31: Cut Salami Slices) or offer two or more alternative proposals of equal value to you. Also. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). and do not flatly reject it because it is not your offer. In some negotiation situations. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. T Making Counteroffers (The “Give and Take”) 89 . in fact. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). Skilled negotiators such as salespeople. do not dismiss it because it is not all you want. One or more parts might be acceptable or indicate movement from their previous positions. carefully evaluate an opponent’s offer. It has often been said that the key to negotiations is to be flexible (see Tactic #25). be enlarged (see Tactic #27: Expanding the Pie). which is often the case. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. what appears to be an outer limit of the settlement range when the process starts can. the other party. Experienced negotiators seldom reveal their exact priorities and objectives. is likely to pull away from the table. Instead. 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. because if you do not at least appear to be flexible. Expect that the “total pie” will be different from what it was at the outset. which would most likely weaken their position (see Tactic #26: Keeping Secrets).Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. When the other party makes an offer. labor negotiators.

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

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

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

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

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

that makes sense. We have $1.500 left. I’ll trade your sidewalk and trees for my whirlpool bath.# 1 Sod Item Cost $1. Maureen: No. $750 for lighting and $750 in the bank.500 $2.000 $500 $1. Making Counteroffers (The “Give and Take”) 95 . I’d like to spend some of it on lighting upgrades.000 $3. These are all permanent immediate needs.500 $5.000 $5.200 $200–$2.000! Brooks: Good. Can we split it evenly? Brooks: Okay.000 $2. which takes another $3. and we both get things we want.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well. which I’d like to keep in the bank.000 $1.500 $500 $1.

Drug-Testing Program 96 50 Practical Negotiation Tactics . Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). The combined lists total thirteen different items: Desired Outcome No. 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. even in difficult years. finally agreeing to split the difference on the remaining amount (distributive items). Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. All items to be negotiated and their desired outcome for each item were put in writing for review.Conclusion By taking the time to list all the items each person wanted and their cost estimates. This year. During that time. Profit-Sharing 5. management and union negotiators found that a “winwin” approach to negotiations worked well. both sides exchanged lists of initial demands at their first meeting. Wage Increase 4. Pension Increase 3. Length of Contract 2.

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

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

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

the positions of non-union crew leader and floor manager would both be eliminated. and that’s it. 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. midnight during the week is the only thing I’ll consider. Under ABC ‘s contract with the union.m. curfew on TV and other noise every night.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. and that’s not negotiable. 10:30 p. I want a 10:30 p. Jasper: Midnight. b) written complaint to a floor manager if the matter is not resolved in 5 days.) Listen.m. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. Rob: (there is no hesitation in this voice) No. No agreement was reached. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. and the union foreman would report directly to the plant manager. Jasper: (without taking a breath) At best. The appeals procedure would have to be altered to reflect the restructuring. is all I’ll consider. The union contract required that management renegotiate this change in the grievance procedure with the union. Under the restructuring. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . and d) a hearing with company owner if the matter is not resolved in 20 days. but changed his mind when he saw Jasper’s attitude. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader.

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

After a cooling off period. the two parties did meet again. rather than in the 35 days the current system provides. This time.two-step grievance procedure instead of a four-step procedure. and actually accepted a three-step procedure. Union: We’re very serious. 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. We’ll see you on the picket line. and we’ll strike if we have to. You can’t be serious. the company entertained the ideas the union had tried to propose before. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily.

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

Sue: Next year. I mean. There’s nothing “special” about Friday. Nancy: If we keep the time at 5:00 p. it’s okay with me if you can sell it to everyone else. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present.m. we’ll come to Mom’s. By being flexible. So that doesn’t work. Thanksgiving is Thursday. Celebrating the next day seems odd. 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. either. I thought of asking Mom if she could move dinner up to noon or so. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. 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. the holiday will be over. When that goal looked out of reach. Mom’s very upset. but she won’t tell you. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday.. I bet everyone could make it on Friday. she suggested a unique alternative. Sue: I don’t know. I know that I would rather not do two Thanksgiving dinners on Thursday. but then I realized that the rest of you already go to your in-laws earlier in the day.Nancy: It just won’t be right without you guys. and it became the family’s new tradition. Nancy: We’d make it special by all of us being together. some people have to work on the Friday after Thanksgiving. Nancy: I’ll let you know. Bill won the coin toss for this year.

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

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

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

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

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

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

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

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

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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that is enough time. Clean it after your game. I’m not going back to him again to discuss this program.000. she chose the one she most preferred. or we lose a whole year. I’ll approve $15. I have three hours. B. Felipe: Sorry. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . I’ll approve $15.000 in the budget. but I will cut your staff by one part-time person (or $15. Take it or leave it. (long pause) Felipe: Let me give you three options: A. Example 2 Roberto: I can’t properly advertise this new program with a $5. Felipe: (Roberto’s supervisor) Sorry. but the company president does not share your optimism on this program. Roberto: Well. Amber resisted the chore she hated.000). I can accept B. I’ll do it now. Roberto: But it will never generate enough interest if no one knows about it. But when her mother laid out the schedule and gave her alternatives. I’ll find a way to do without one part-time person. Three.000 budget! I need at least $20.000 for advertising. Roberto: But I need to start the direct mail and newspaper ads within two weeks. keeping her Saturday free. but no TV or anything until it’s done! (pause) Okay. Conclusion At first. but I will cut your travel budget out completely. Felipe: Well.000 for advertising. I can’t help. or C. Use the $5.Amber: row before your basketball game. and clean it.

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

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

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

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

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

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

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

000.000.000 to cover the premiums for dependent coverage. as it has always been. you are taking a risk on the costs increasing. what they really need is for you to cover the costs of dependent coverage. The projections for the next five years were that these costs would increase to about $1.000.000 (which we reasonably should have expected to pay in premiums) in the pension account now.000 a year over the next five years? Company: Yes. The pilots want dependent coverage paid for by the company. Over the last five years. However. Company: This could not come at a worst time for us. and the premiums for health care just keep going up. dependent coverage could cost us $1. that would be the minimum increase.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000. This is just a cash-flow problem that your members have to understand. As best as we can tell. 124 50 Practical Negotiation Tactics .000 figure. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. And we cannot afford that $1. Pilots: Look. This would be a better benefit in the long run. and we know that with this new contract term of five years. But only a few of our people are close to retirement age. and are willing to keep pension benefits the same.000. we know that health insurance premiums might skyrocket. Over the next five years. the company can make your pensions much better. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. then the pension benefits overall will increase by $10. If we invest the $200. The company wants to trade paying for dependent coverage for better pension benefits. The airline industry is in a slump. With long-term planning and investments. with all wage and operations issues resolved fairly early. the airline paid a total of $200.000.000. Everyone was afraid that the dispute would cause an impasse and a possible strike.

so the decision to be flexible was a good one. or invest in the pension plan? Company: Yes. by agreeing to let the company cap its exposure for dependent health coverage.000 available. Conclusion The company was committed to limiting its exposure to $200.000 actually carried them through four years. however.000? Once the cap is met. the company will not be expected to give us this benefit. The pilots expanded the range of options. then those funds will not be available to invest in the pension plan. we are. if they were that high. Company: If the company spends the $200. If we can get two or even three years out of the $200. The $200. can we agree to a year-to-year agreement on dependent coverage. The dependent coverage is more important to us now than the pension benefits.Pilots: But you do have the $200.000 the first year on the premiums.000 to either pay one year of the premiums.000. and the pilots knew what to ask for when the contract expired. 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. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. The health insurance market stabilized. that would be worth it. with a cap of $200. It initially believed that the only option was to put that money into pension benefits. Making Counteroffers (The “Give and Take”) 125 .

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

I can afford $6.00 per month. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.99 per month. (looks at the numbers) That looks good.00 per month for your service. it will be a five-year lease. but let me see the numbers.000 down. Let’s see.Buyer: I don’t see how you can do that. down payment.” She decided to cut the $45. I can’t discuss another client’s account. can’t you? Buyer: Yes. Once the buyer volunteered that $300 was an affordable “slice.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. with your car and $6. Making Counteroffers (The “Give and Take”) 127 . Saleswoman: Simple.” she had him—she worked around the $300 slices. do you want Disney? Yes. You can do that. But my neighbor pays $39. and added the trade-in. Instead of a three-year lease. and payout slices to reach the total price she wanted. as promised.000 price into “slices” the buyer thought reasonable. I can’t afford that much. you can get the Disney channel for only $5. do you want HBO? How much? $5. Sure. but what else must I buy? Only the basic service for $8.00 per month. Great! So.

That’s another $5. Disney is for the kids! The sports channels are for me. and SI 1.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. That’s $5. What about the music package? Yes. 2.99 per month. Conclusion The owner thought his neighbor’s service at $39. we had that before.00. The total is $38.00 per month. Thanks. Okay.00! Why? Because he judged the per-slice price to be reasonable. Yeah. and probably felt much better about the total negotiated package because it was presented in modest individual slices. 2? How much? $8.00 per month was far too much.00 a month. Great. instead of one total amount. they asked about the Cartoon Network. 3. But that’s all! Then we’ll hook you up on Monday. Any other kids’ channels? Yes. I really want the sports channels. and my wife wants the old movies. but he agreed to six “salami slices” for a total of $38. 128 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

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

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

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

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

I think I have acted properly. and that they had invested and spent the tax dollars wisely. and I hope I can convince you of that. The defendants contended that the auditor’s actions were politically motivated. to no avail. The tactic was so successful. Conclusion Dad’s use of a “surprise” tactic was extreme. 144 50 Practical Negotiation Tactics . Susie: Daddy didn’t say anything about the shoes. at great expense to the auditor’s office and the school board. The local newspaper was prepared to urge the auditor to end the litigation. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. in fact. Dad tried correcting them a few more times. and reached back for the doll. charging that they breached their duty in their handling these funds. Both Andrea and Susie were so shocked by their dad’s action. Finally. She can have them later. but nothing else up to that point was working. they didn’t say another word. Dolly has to have her shoes. The litigation itself had been going on for more than three years. he slowed down.) Dad: Now there’s no more fighting over the doll. Dolly doesn’t need shoes on in the car. The auditor asked to meet with the editor to explain his position. He initiated the litigation against the local school board members and several banks that invested the money for the board. He grabbed it and threw it out the window. I want the shoes. Daddy said I got the doll on the way to Grandma’s house. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled.Andrea: Give me the shoes back. that they never fought over a toy in the back seat of the car again!! Example 2 The editor of a local newspaper was planning on writing an editorial critical of a locally elected auditor who had filed a very nasty lawsuit. so it was worth the risk. (They continued to argue and whine and pinch each other.

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

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

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

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

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

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

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

the south parking lot has not been used much. but it’s not ever full.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. We hope you’re right. the closest parking to it is along Elm Street. What if I changed the entrance to the middle of the lot? That way. and we’d like to keep it that way. Many of our homes back up to that lot. We’d really like to block off that cut-through and have the theater face the south. We’d like you to prohibit cars from entering or leaving from the south lot. So. In fact. Not having in and out traffic to the south of the mall is just not very practical. driveways on the south side of the mall are along the east and west side of the parking lot. I’m afraid. And. not having direct access to the south lot from the street would be unworkable. The neighbors: Owner: 156 50 Practical Negotiation Tactics . Right now. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. with your plans to put the entrance of the theater on the east side of the mall. the north lot is used more. lights in and out at night can be very annoying. I could put a privacy fence along the east and west—at the backs of your yards. and break in his door. as you said. We’re just not convinced. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. even though I’m not adding any parking. only when that lot is full would cars come around the mall and park on the south side. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. With the Comedy Club and the grocery store on that end. You could have all of the traffic enter from the north lot. if I agree to move the theater entrance to the south side. Right now.

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

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

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

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

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

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

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

… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. which certainly is large enough (he naively thought) for two young children to easily share. Their dad instructed them to share the candy bar.” the divider. Maria and Roberto: No. Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. is usually careful about dividing the object into two equal parts. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . The second person then chooses which of the two parts they will receive. Oh. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. because you did the cutting. with the remaining part going to the person who did the dividing. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. the classic “split and choose” tactic might be the best way to settle the issue. take this knife and slice the Snickers into two halves. Maria.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. of course. Realizing the potential of getting the “smaller half. one person is given the task of dividing the object(s) into two parts. Roberto will get to choose which half he wants. Many of us learned this one from our parents: After two people agree to the strategy.

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

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

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

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

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

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

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

I’ll get back to you. the other party will ignore or refuse to believe the information. but you’ve priced it way too high. but we feel that it’s a fair offer.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. They sold for: $225. but the key is to gather facts that you might need—not just the facts that you will need. This offer is for more money than any four-bedroom houses on this neighborhood list.000. (Next day) We’ve reviewed the records you’ve produced. They believe it is overpriced. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. 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. and $237. What? That’s $35. Sometimes.000. $237. Here’s a list of the five that are about the same size as yours.500. Sam Jones. has owned the house for 24 years and is downsizing to a condo. $235. $229.000 under the listing price! We realize that. We love your house. and we are countering with an offer of $250. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. but the right facts presented at the right time can chill or astound and completely turn things around. The owner. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.000.000.

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

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

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

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

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

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

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

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

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

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

One day. Larry: Judy. Michael: Well. Michael: Good morning. today. Larry: Michael. so why are you here? Michael: I’ve discussed it with my partners. Two months later. Michael: I have a check right here for 4.5 million. and I only need your building to own it. What do you think? Judy: Larry. our accountant said it’s worth $6 million. come out here! (Judy comes out from the back room. In reality. I still want to develop this block.0 million.) Larry: Michael is here again. and he is offering us $4. Larry: Yes. which the Bizannes accept. after no contact from Larry or Judy. Larry.5 million for the building. but their continued walkout convinced Michael that they would hold firm. You rejected it. you’ve already told us that. Judy: Larry.5 million. Michael Roberts. visited their store. with a certified check. and we gave you our price. Michael calls on them again with a check for $5. He met with Bizannes twice before. a local developer. and I’m not interested in less. How’s business? Larry: Great! I’m surprised to see you again. and I’m prepared to offer you $4. let’s eat lunch. go back to your office.5 million. (Judy and Larry walk into the back room and close the door. they were prepared to accept $5.both of them love their store.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price. Larry. Reaching Agreement 183 .

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

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

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

we won’t be involving our real estate agent. Bill: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay.000. Example 1 Bill and Paulette had been house-hunting for some time. 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.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. however. If we shake hands on it right now. Bill: Reaching Agreement 187 . all the usual stuff in a sale. During a discussion. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. and while Bill and Paulette had been using an agent to help locate houses.000. and one of the other couples looked very interested. Seller: Yes. They were not the only couple to come to the open house. and felt that they would have to work fast to make an offer before someone else did. They saw the “For Sale” and “Open House” signs. They finally looked at a house they really liked. At the very least. Bill and Paulette fell in love with the house. Obviously. We’d like to make you an offer of $150. they looked at this particular house on their own. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. everyone is busy grappling with the details of the negotiations. The owners were selling the house without a real estate agent. and decided to stop by to see if they liked the house. Seller: We’re asking $152. Bill pulled the seller aside. not the furniture.

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

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

000 and the conditions of the offer.000 just to get the employee to “withdraw” the complaint. to his disadvantage. 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. I’ll take your offer back to her and let you know.000. but word did get out that a public agency paid $200. It was made clear that the employer had paid the additional $100. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.She: authorized to pay $200.000. There was a confidentiality agreement.000 when all that was asked for was $100. 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 . Monica accepted the $200.

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

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

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

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

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

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

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

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

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

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

202 50 Practical Negotiation Tactics . 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. Recently voters approved the merger of the City of Louisville and Jefferson County Governments.park and a successful industrial park in the City’s enterprise zone. the City and a for-profit hospital for guaranteed indigent health care services for city residents. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. an agreement between the State of Kentucky. Ms. Jefferson County. 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.

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