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



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


50 Practical Negotiation Tactics

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



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

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

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

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

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

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

The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. 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 .

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




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


50 Practical Negotiation Tactics

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

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.



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

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

we 18 50 Practical Negotiation Tactics . we really want to buy your company. it made the negotiations easier. Tom now felt comfortable negotiating the price. has begun negotiations to sell his firm to BigManu Company. No longer worried about John’s motives.) Tom: John. I don’t think I can go higher than $18. let me think about it and I’ll get back to you. When Tom found out why John decided to sell his rifle. let’s do it. parties to a negotiation are not likely to reach agreement. Tom: Okay. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. but I could get the money to you right away. and we’re committed to keeping it open as a major division of our company. The sale price for the company has not yet been agreed to. but then he will be happy to retire.Tom: Okay. Example 2 Rick. However. Well. Without some trust. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. fearing that this will put all of his employees out of work. Was Tom interested? Tom declined. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. Conclusion Tom entered into the negotiations suspicious of John’s motives. but thought this might explain John’s sudden interest in selling the rifle. John: Well. BigManu: Rick.000. and now the two-year requirement has become a stumbling block in the negotiations. Rick needs to remain president of the company for the next two years. the owner of a small manufacturing company.500 had an 1861 for sale. if you could come up a little—say $18.500—we’d have a deal. He is two years away from retiring and does not want his business to fail before he does. I’ve been thinking about your offer.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The buyer said he wasn’t interested. The desperate owner agreed. The buyer loved the location. “Please make any offer—they are motivated!” The buyer responded. two people on the team will be more successful because they evoke different emotions from the other side. the seller’s agent called the buyer about the property. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). For example. half-serious. I offer half the asking price. The agent explained that the seller was desperate. and the buyer was able to completely renovate the house and still have a great deal.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. but the inside was a complete turnoff. If there is a significant weakness in your position. By assuming opposing roles.” The agent took the offer to the seller. 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. Weeks later. 34 50 Practical Negotiation Tactics . with “All right. His teenage sons had “trashed” the house.

her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Each time.000. we think $160. but the house has increased in value. but not so high as to end the negotiations before they begin. Buyer: We really like the house.000. And I don’t see a lot of difference in the neighborhood. Carol: Maybe not. and then look at the demand from your opponent’s perspective. Finally. Carol: We really want to sell. but the redecorating is of little value. Planning a Strategy 35 . as well. one buyer shows some interest. but quite frankly. However. so think this through well ahead of time. it is likely that your opponent will. with no success. It’s a good neighborhood. six years ago you bought it for $60.000 is very high. First. You are not likely to get more than you request. After all. your request must not be so low that the other party concludes that you are not negotiating in good faith. but we simply can’t take less than $160. Buyer: The air conditioning might have increased the value of the house. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. The market hasn’t gone up that much in six years. Surely there’s some flexibility in your asking price. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. Be realistic. She has had it on and off the market for the last five years. Anyone buying the house would want to change wall colors or add new carpets. so do not underestimate what you might be able to achieve. If you consider the demand ridiculous.000.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Carol wants $160. We also think that the neighborhood has improved over the last few years. Your demand should be high enough to give you room to compromise. but certainly not exceptional in any way. and just refuses to reduce it.

Buyer: What if we offered you $100. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. When Carol refused to budge. Here’s how the initial negotiations went: Partners: Well. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. Neither Edward Bits nor Edmund Bites. as to how you think the name is going to benefit you. we are certainly interested in your request to “buy” our firm name to use in your city. The other law firm was prepared to pay $100. though.000? Carol: We really can’t take less than $160. Inquiries to other law firms were not very helpful because in almost all of the instances. or she has unreal expectations. We’re curious. enjoying a statewide reputation for quality representation. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. the founders of the firm. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. 36 50 Practical Negotiation Tactics .000. The partners are interested in selling the name. were still alive. but they have no idea what the value of their firm’s name might be in this nearby city.000 immediately. In any event. Example 2 The law firm of Bits & Bites was a Sioux City institution. and then $10.000 offer by coming down in price at least a little. the buyer took it as a signal that either Carol didn’t want to sell. Carol drove off a potential buyer by setting an asking price that was just too high.

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

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

Peggy: Planning a Strategy 39 . Half what it cost us new. Peggy: I’m hearing one thing from Paula and another from Andy. Peggy: That’s fair. Peggy. so I’ll take it. Peggy: So. angry. not for $1. I want to keep those.200. what’s your price? Andy: $1. etc. since they are sitting out in the driveway with it. threatening. Andy and Paula: Yes. And take the leaf-catcher attachment and the gas can. Andy: I want them… Paula: Go ahead and take them. you’re really moving! I hate to see you leave. I’ll go home and you can call me if you two can reach an agreement. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. Paula: Go ahead and ride it home. Andy and Paula. I heard that you want to sell your riding mower. while another acts difficult. we won’t need it at the new condo. only three years ago. I can use them. Andy: No. Peggy: I assumed they went with the mower.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Example 1 So. I don’t know what the deal is now. They cost about $300.200! We should get $1. 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. and I know how you take care of things. (bad guy) and implies that his or her side will hold firm on their demands.400 if the catcher and can are included.

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

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

How may I help you? Hello. because we have had a sick relative out of town and we used long distance a lot this past month. but I recently was sold a $. 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. and might even harden your opponent into an unfavorable position (for you or for both of you). He had. he was very unhappy. He decided that the best approach was to act indignant when he spoke to the company representative.00 a minute. such as deals on computer packages and phone services.10 a minute rate at my office location. It seems that the rate you are charging me on my home phone is $1. made some very good purchase decisions for his small business. Your opponent might conclude that they have made a serious misjudgment and want to make a conciliatory move to get you back to the bargaining table. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. So. I have a problem with my recent bill and my billing rate. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. The fault was partly his because he did not stay on top of changes. in fact. 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. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. 42 50 Practical Negotiation Tactics . This will put you at a distinct disadvantage from this point on.Tactic 9: Control Your Emotions Stay cool. I noticed this.

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

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

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

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

you’re the oldest. Planning a Strategy 47 . However. a well-known negotiations professor from Harvard University.” is the recommendation of Howard Raiffa. Susan. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. with winner taking all. 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. Mike: Mary Anne. A fourth option. 2) They can flip a coin. Both sisters covet it. The first party decides on a price for which he or she will either buy or sell the object to the second party. Then Susan. The second party then decides to either buy it at that price and pay the first party. and split the proceeds. since this one is in perfect shape and it was Mother’s. 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. called the “Reciprocal Buy-Sell Offer. Mike. All the rest of the estate has been divided among the family. 3) They can agree to sell the object to a third party. (two days later) Mary Anne: Well. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). so you set a price at which you agree to buy or sell the coffee grinder. I’ll give you 48 hours to decide the price. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. the executor of the estate.

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

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

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

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

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

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

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

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

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

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

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

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

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

500) M $21. (2004). “Distributive” bargaining (“win-lose” or “zero sum”) is used. Exchanging Initial Offers 61 . by Michael R.750) Target Point ($24. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.000) Target Point ($23. Another common strategy is to start with the status quo. quick agreement.500) Fig. Carrell and Christina Heavrin. 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. 190–192.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.000 22 23 24 25 26 27 Initial Offer $28. 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. Adapted from Labor Relations and Collective Bargaining. This is a practical starting point that will not anger the other side (and might even be expected). The negotiator firmly states that it is their best offer in an attempt to gain a nice. None is as important as the first one. 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. for example. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). 2: Distributive Bargaining Process. as illustrated in the following figure: Seller Resistance Point ($22.000 Buyer Initial Offer ($21.750–$25.500) Resistance Point ($25. such as proposing to continue at the current rate or price.000) Settlement Range ($22. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.

it is termed the settlement point – not the “right price” or “fair price.” but the settlement price.In this example. After initial offers are exchanged. 62 50 Practical Negotiation Tactics . You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. The most common method of negotiating more than one issue or item is to combine two or more in a deal that gives each side something (Tactic #17: Package Items). the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. 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.000) is reasonable. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. thus producing a true “win-win” negotiation. usually. See Tactic #18: Agree on Something As Soon As You Can.000 and $28. each initial offer ($21.000. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). the other side does not agree to this value). and is the range in which most negotiations actually occur. The settlement range is the distance between the resistance points. these points have set the outer limits. When the two parties agree to a price within the range. the process quickly narrows to the range between the initial offers. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. In the example. A target point is the desired settlement value a party has set as a goal when negotiations begin. if the buyer’s initial offer was $25. thus starting out on a positive note. 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).

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

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

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

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

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

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

Employees will be paid time-and-a half for each of these it’s not.. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth).Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal... Miguel. All three employees must agree to the schedule. The three are sitting at a lunch table to discuss the schedule. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. 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. At the very end of the negotiations. I’ll take the red one for $100 less. and seniority will be used to determine who gets to choose the first day. Then we have a deal. Hobbs successfully chose color as a throwaway item. Conclusion Mr. 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 . Example 2 The office supervisor told the three internal sales representatives (Jenny. The manager was convinced enough to sacrifice a final $100 for the throwaway. 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. The days in question are: Exchanging Initial Offers 69 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. Sue: Let’s offer $325.000. because you have settled quickly.. at minimum cost. 86 50 Practical Negotiation Tactics . Let’s low-ball them and offer $290. That’s a fair price.000.” (You have won a settlement.” The perfect first offer. such as last year’s price. never give them their asking price. Jay: No. offer $150. which can be very useful). Avoid giving away too much at the outset. They found one they both like that lists for $325. Jay: No.000 and $337. but you feel cursed because you gave away too much.000 two years ago. of course. We don’t know how anxious they are to sell or if they know the market. and that two similar ones on the same street sold for $330. Their realtor told them that it sold for $290.000.000 this year. or 3) Make an unrealistic offer (i.000—what they paid for it. and houses in this area sell fast. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.e.000 for a house that sold for $185. particularly if you don’t know the other party’s “settlement range. then $320.) To prevent this from happening.000 three years ago). The other party will probably come back with an equally ridiculous offer. think things through before you make or accept the first offer. is the most (or least) the other side will accept. The sellers must be willing to come down a few thousand … Sue: Well. 2) Start out with an old number.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. before someone else does. and you cannot withdraw it in good faith. 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. thus requiring greater concessions on both sides.

since they had already bought another house. Frank: Me too. was very impressed with their presentation.000. Exchanging Initial Offers 87 .000 total. as Sue had first suggested. I can’t tell our realtor $290.500—half the difference! Sue: Great. they had offered $325. Both parties felt that they made a good deal.000 for each of us—$6. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. then let them make a counteroffer.) Bob: I’d do it for $3. They outlined how they would develop a new employee performance-appraisal system. (the next day …) Jay: They made us a counteroffer of $307.000. If.Sue: Don’t be crazy. the company president. (Bob and Frank meet privately to discuss the situation. 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. as requested by the human resource director. That’s an insult! Jay: Well. Lyle Foxworthy. realizing they offered too much. the sellers obviously would have accepted and Jay and Sue. The buyers were very motivated to sell. but who knows what they are planning on offering. Sue: Then you do it. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. Give us your lowest price. and the offer was based on fact: the prior negotiated price.

Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. Lyle: Okay. We’ll do the job. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. but we can’t pay more than $18. Bob: That’s fair. and you two come highly recommended. and it would not apply. but we know you must have an amount budgeted for this and we are willing to do it for that amount. I’m out of time. We’ve waited long enough. They also ended up getting three times ($18.000.) Lyle: Okay. 88 50 Practical Negotiation Tactics . That is all that’s left in this year’s training budget. What’s the cost? Bob: We want the job.000.000) their minimum price of $6.

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

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

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

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

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

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

# 1 Sod Item Cost $1. Can we split it evenly? Brooks: Okay.500 $500 $1. and we both get things we want.000 $5. $750 for lighting and $750 in the bank. Maureen: No. which I’d like to keep in the bank.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.000 $1. Making Counteroffers (The “Give and Take”) 95 .000 $3.500 left.200 $200–$2. I’d like to spend some of it on lighting upgrades. These are all permanent immediate needs. I’ll trade your sidewalk and trees for my whirlpool bath.500 $2.500 $5. which takes another $3.000! Brooks: Good. that makes sense.000 $500 $1. We have $1.000 $2.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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


50 Practical Negotiation Tactics

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.

Making Counteroffers (The “Give and Take”)


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


50 Practical Negotiation Tactics

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

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-

Making Counteroffers (The “Give and Take”)


I’ll approve $15. Take it or leave it. and clean it. Roberto: But I need to start the direct mail and newspaper ads within two weeks.000 in the budget. Roberto: But it will never generate enough interest if no one knows about it. Felipe: (Roberto’s supervisor) Sorry. I’ll find a way to do without one part-time person. or C. Example 2 Roberto: I can’t properly advertise this new program with a $5.000 budget! I need at least $20. I can accept B. But when her mother laid out the schedule and gave her alternatives. Conclusion At first. I have three hours.000 for advertising. I’ll do it now. but I will cut your travel budget out completely. Felipe: Well. she chose the one she most preferred. Roberto: Well. I’ll approve $15.000). but the company president does not share your optimism on this program. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . or we lose a whole year.Amber: row before your basketball game. Three.000. Use the $5. but no TV or anything until it’s done! (pause) Okay. keeping her Saturday free. (long pause) Felipe: Let me give you three options: A. that is enough time. B. Amber resisted the chore she hated. Felipe: Sorry.000 for advertising. but I will cut your staff by one part-time person (or $15. I’m not going back to him again to discuss this program. I can’t help. Clean it after your game.

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

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

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

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

Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) 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. 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. I hate not to attempt to add some additional areas to the agreement. Mayor’s representative: Well. I’ll go back and tell Madame Mayor your position. He either had to end the session or figure out what to say to reengage the other side. 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. Conclusion By remaining silent. Making Counteroffers (The “Give and Take”) 121 . In the end. the Town Council’s representative left the mayor’s representative with no room to maneuver. the Town Council representative’s position prevailed.

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

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

000. The projections for the next five years were that these costs would increase to about $1. The company wants to trade paying for dependent coverage for better pension benefits. that would be the minimum increase. The pilots want dependent coverage paid for by the company. And we cannot afford that $1. the company can make your pensions much better.000. With long-term planning and investments. The airline industry is in a slump.000. you are taking a risk on the costs increasing.000.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. If we invest the $200. and the premiums for health care just keep going up. what they really need is for you to cover the costs of dependent coverage. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. As best as we can tell. we know that health insurance premiums might skyrocket. But only a few of our people are close to retirement age. Over the last five years. and are willing to keep pension benefits the same. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.000 (which we reasonably should have expected to pay in premiums) in the pension account now. Pilots: Look. and we know that with this new contract term of five years.000 to cover the premiums for dependent coverage.000 figure. This is just a cash-flow problem that your members have to understand.000 a year over the next five years? Company: Yes. Over the next five years. the airline paid a total of $200. This would be a better benefit in the long run. dependent coverage could cost us $1. as it has always been. However.000. 124 50 Practical Negotiation Tactics . then the pension benefits overall will increase by $10. with all wage and operations issues resolved fairly early.000.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. Company: This could not come at a worst time for us.

The health insurance market stabilized. Making Counteroffers (The “Give and Take”) 125 .000 to either pay one year of the premiums. so the decision to be flexible was a good one. can we agree to a year-to-year agreement on dependent coverage. The $200. the company will not be expected to give us this benefit. however. The dependent coverage is more important to us now than the pension benefits. Company: If the company spends the $200.000 available.000.000? Once the cap is met. by agreeing to let the company cap its exposure for dependent health coverage.Pilots: But you do have the $200. that would be worth it. The pilots expanded the range of options. and the pilots knew what to ask for when the contract expired. It initially believed that the only option was to put that money into pension benefits. then those funds will not be available to invest in the pension plan.000 actually carried them through four years. we are. If we can get two or even three years out of the $200. if they were that high. Conclusion The company was committed to limiting its exposure to $200. Company: Then it’s okay with us. with a cap of $200.000 the first year on the premiums. or invest in the pension plan? Company: Yes. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.

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

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

128 50 Practical Negotiation Tactics . What about the music package? Yes.00 per month was far too much. we had that before.00.00! Why? Because he judged the per-slice price to be reasonable. 3. they asked about the Cartoon Network. and my wife wants the old movies. Yeah. Any other kids’ channels? Yes. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00 per month. That’s another $5.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. I really want the sports channels. Okay. The total is $38. Disney is for the kids! The sports channels are for me. Great. and SI 1. instead of one total amount. 2. Conclusion The owner thought his neighbor’s service at $39. That’s $5. But that’s all! Then we’ll hook you up on Monday. 2? How much? $8. Thanks.99 per month.00 a month. but he agreed to six “salami slices” for a total of $38.

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

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

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

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

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

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

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

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

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

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

Applying Pressure


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


50 Practical Negotiation Tactics

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

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

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

Applying Pressure


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

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


50 Practical Negotiation Tactics

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

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

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. Andrea: Okay. the argument is over the doll’s shoes. the little girls began to fight over the doll. Andrea. Susie: Okay. Andrea had taken them off the doll. you have it this part of the trip. The doll can be shared. (Their dad pulls to the side of the road and turns to face them in the back seat. You’re driving me nuts. This time. Andrea: The doll is mine. We’ve got a long ride ahead of us. I took it out of the box. I can’t drive if you keep this up. Mom said so. Consider making a suggestion or a proposal that completely surprises your opponent. the girls had been fussy.) Dad: Stop it right now. the fighting starts up again. (In a few minutes. you have it when we drive home.) Applying Pressure 143 .Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. Just share the doll. and Susie hid them under the seat. Their dad tried to reason with them. Almost from the beginning of the three-hour drive. Why? A sudden surprise can disrupt the dynamics of a negotiation. Just because you saw it first doesn’t make it yours. and Susie. About an hour into the drive. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Susie: The doll belongs to both of us. but use this tactic judiciously. because you will probably only get to use it once. Tell Susie to let me have it. and I can’t stand it.

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

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

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

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

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

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


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

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

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.


50 Practical Negotiation Tactics

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

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

Applying Pressure


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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.


Making Progress


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

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

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

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

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

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

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

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

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

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

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

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

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

” Under store policy. so the salesperson delivered the suite himself. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. attach legs. However.” Many people have witnessed or used this effective negotiating tactic. miles from their home. What started out as a single issue is now a combination of a major issue and a much smaller issue. supposedly the bargainer in the household. Brenda did her part when she said. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . delivery was limited to a small geographical area. we’ll take the suite if you’ll throw in free delivery and set up the furniture. and the delivery carrier doesn’t set up mirrors. etc. is expected to dicker over the price.Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way. Her husband Jason. Conclusion The amount the couple spent was fairly large. Jason was having a hard time getting the salesman to lower the price. he also set up all of the furniture in a second-floor bedroom.” thus extending the scope of the negotiations. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. “Okay. His tactic was to throw in a “nickel” in order to make lots of “dollars. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). With a great deal of effort. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town.

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

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

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

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

What? That’s $35. but we feel that it’s a fair offer. Sometimes. the other party will ignore or refuse to believe the information. 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. Here’s a list of the five that are about the same size as yours. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. but you’ve priced it way too high.000. Sam Jones. I’ll get back to you. and we are countering with an offer of $250.000. $237. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000.000. They believe it is overpriced. but the right facts presented at the right time can chill or astound and completely turn things around. $235.000. The owner. This offer is for more money than any four-bedroom houses on this neighborhood list. (Next day) We’ve reviewed the records you’ve produced. but the key is to gather facts that you might need—not just the facts that you will need.500. They sold for: $225. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000. $229. We love your house.000.000 under the listing price! We realize that.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. has owned the house for 24 years and is downsizing to a condo.

Hatfield: My staff has done a lot of research. Example 2 Supervisor: You know the policy. Order the new computers. The last 20 were over $2. who was not particularly knoledgeable about real estate. Supervisor: If I okay this purchase order. let’s not worry about it. I’ll get called on the carpet. Well… We have a written counter of $245.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute.600 unless the company president approves. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. He found facts that supported his position. and we know that only this model will meet our needs. You can’t pay more than $1.000 each. and wisely chose exactly when to present them in order to make his point. Here it is. Supervisor: Well.400 each. We accept. and did his homework. Conclusion Hatfield had anticipated what his supervisor’s position would be. We’ve talked with purchasing and we have the authority to buy seven for $2. Making Progress 173 .000. Hatfield: While I was at purchasing. if other departments have ignored the policy.600 for a computer. Conclusion The Joneses had based their asking price on the advice of a friend. I asked for a list of all new PCs bought this year. I’ll be… Okay. That’s the bottom price. No one can go over $1.

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

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

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

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. the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. hours. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. When two parties believe they have an oral agreement. In this process.Stage 7: Reaching Agreement he final stage! It might come minutes. They bring it out when a dispute arises. When multiple issues are at stake and most have been agreed upon during negotiations. this process can easily result in a final settlement. or even months after the first offer is presented. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. If friends or neighbors need to settle something but prefer to avoid the negotiation process. days. 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. 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. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. this tactic can produce an agreement. and the classic Walk Away (Tactic #48). 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). T Reaching Agreement 177 . and the child learns an important lesson about life.

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

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

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 . the negotiator skillfully finishes his words of congratulations by inserting one last key demand.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. However. knowing that it will probably be agreed to in order to continue in the euphoria of the moment.

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

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

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

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

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

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

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

Conclusion The seller had always intended to leave the garbage disposal. real. the refrigerator. she said that her supervisor had repeatedly asked her out. and that the problems with her job performance were. all window blinds and drapes. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. the hutch. that’s what I meant. Let me just get the standard “offer of sale” form and fill out what I hear you saying. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . but I’d like to make sure there are no misunderstandings. he listed the stove.000.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse.000. he listed an attached hutch in the kitchen. a public agency. The supervisor assured the employer that there was no basis for her complaint. Seller: Okay. and the two area rugs were specifically included. since he probably would have missed them) Yes. he left the price at $150. If it’s what you meant. The supervisor pointed out that he had a staff of 20 or so women. look this over. and had been prepared to drop his price to $145. Sign here. then we have a deal. Under the section for appliances to be left on the property. he began to have “problems” with her job performance. In her complaint.Seller: Just a minute. When he had the chance to put the deal in writing. Bill: (pleasantly surprised to learn that the garbage disposal. the hutch. in fact. (The seller recorded the offer of $150.) Seller: So. I think we can work something out. and two area rugs. and the two area rugs. and when she refused. It worked. and the garbage disposal. Example 2 Monica brought a sex discrimination charge against her employer. the house is yours. In the section for fixtures and miscellaneous items to be left on the property.

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

000. to his disadvantage.000 just to get the employee to “withdraw” the complaint. 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.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. Monica accepted the $200. 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.000 and the conditions of the offer. 190 50 Practical Negotiation Tactics . There was a confidentiality agreement. I’ll take your offer back to her and let you know.000.She: authorized to pay $200.

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

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

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

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

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

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

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

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

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

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

Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 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. the City and a for-profit hospital for guaranteed indigent health care services for city residents. 202 50 Practical Negotiation Tactics . a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. Ms. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. an agreement between the State of Kentucky. Jefferson County.park and a successful industrial park in the City’s enterprise zone.

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