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SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
with neighbors. or engage in an unproductive argument.negotiator! Pass this book on to someone else who needs it. few people understand that normal interactions represent bargaining opportunities. with family members. but many of us miss the opportunity to bargain in other situations. Most readers will no doubt recognize some of these strategies. But if you scored 8 or less. at a flea market. some will in retrospect even remember being the victim of one or two of them. 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. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. • A child wants a new toy now. accept what is given. practical tactics useful in real-life situations at work or at home. Who. such as these: • You receive the wrong order at a restaurant. they pay the sticker price. 4 50 Practical Negotiation Tactics . This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. • A co-worker asks for volunteers for a new project. Instead. exactly. Unfortunately.
“I’d like Introduction 5 . The parties involved can make a decision by themselves. perhaps you can say to a hotel clerk. The parties are interdependent: what one party does affects the other. Both sides want a settlement. that can be negotiated. There must be a conflict in the sense that what one wants is not what the other wants. The parties involved are interested in reaching a common goal. 5. such as price. Each one has the five key characteristics necessary for bargaining: 1. 4. In some situations. In some circumstances. and each side can involve one person or several people (each representing one “side” of the issue). be prepared to bargain. Your spouse wants to buy new furniture. A neighbor wants to remove an old tree on your property line. you must advise the other party of your intention to negotiate. A teenager wants to buy his/her first car. since you lost my reservation. and I don’t have time to wait for another. or items of value. some resolution must be negotiated. Flexibility. All of these situations are opportunities to negotiate. one party is only allowed to follow policy or must wait “until the manager arrives. What are my alternatives?” During an employee evaluation. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. 2. 3. Interdependency. perhaps the employee can say. Mutual goals. A service repair person gives you an estimate on some work. Therefore. A friend is about to select the movie he/she wants everyone else to see. time.• • • • • • • A hotel clerk tells you that your reservation was lost. condition. There are flexible elements to the situation.” When you recognize that something can be negotiated. Your boss reviews your past year’s performance. Decision-making ability. Two or more sides are involved. For example. “Well. Multiple parties.
and meet with you again. negotiations can be concluded with a written or oral agreement. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. and the tactics that might move the negotiations along. Keep this book handy when preparing for any type of negotiation. the parties and their interests. but I believe it adds value to our house. the other party will realize that you intend to negotiate and do not accept the situation.time to look over this performance review and respond point-by-point. Once a settlement is reached. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. the facts. 6 50 Practical Negotiation Tactics .” To a neighbor you can say. “I see why you want to cut down the tree. 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. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. and use the forms in the back to identify the issues.
have you ever required a written agreement covering chores. spouse. When making a major purchase. In the past. did you request appropriate compensation? 6. As a parent. etc. allowance. have you ever felt that you were not adequately prepared to negotiate a job offer? 2.How good are your negotiation skills? Place a check in the box that applies to you. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . or division of household duties. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. Do you routinely negotiate for better accommodations when you check into a hotel? 3. Do you wish you could negotiate a change in your job duties or salary? 7. but you did not? 8. do you routinely negotiate a last add-on before you close the deal? 9.? 10. do you believe that you negotiated the best possible deal? 4. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. Yes No Self-Assessment Quiz 1. or child. The last time you received sub-par service or food in a restaurant. In the past. When you purchased your last home or car.
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Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). including those that are less obvious. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. 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 . state. decide how complicated the issue is. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer 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. If it is a relatively informal situation.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. one for another.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. On the other hand. the process will probably take several weeks or months as the parties move through all the stages. They’re referred to as “win-win” because each side can achieve their goal. thus allowing each side to achieve one of their goals. the process will be fairly straightforward. Examples: • office location (city. etc.
Depending on the situation and the parties involved.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book. stages can be combined. Examples: • an item sold by one party and bought by the other • wage increases won by one side. 10 50 Practical Negotiation Tactics . the other side loses. or even skipped altogether. The Comprehensive Model Negotiation is more of an art than a science. What one side gains. rearranged. but feel free to try them when they seem most appropriate to your specific circumstance.
The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 . Information.
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
The threatened strike became a reality. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. his BATNA was not to hold out for more money. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. 16 50 Practical Negotiation Tactics . 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. and equipment. as a last resort.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. When negotiations with the union became hopeless. providing them with a very good income for life. was a power play. notified all the employees of their intentions. selling became an attractive alternative to a strike or prolonged battle.” which was refused. In this case. and it now employs 230 craftsmen. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. For the past two months. The Jaggers gave the union their “last. inventory. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. With only two weeks remaining before a threatened strike. The union negotiators thought the Jaggers were bluffing. Conclusion Selling their business was the Jaggers’ BATNA. The union negotiators convinced the employees that this too. and final offer. but rather what the buyer planned to do with the car. They learned that their assets would be easy to sell and were worth more than originally estimated. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. The owners. The union is demanding wage and benefit increases. best. the Jaggers decided to seek buyers for their land. The $56 million dollar business took them 30 years to grow. as Harvey had for many years.
Make me an offer. right? John: Sure. John assured Tom that this would never happen. it’s to your advantage to know what is behind a seller’s decision to put it on the market. It is extremely rare—one of only 100 made with that bore and handle. and told John several times to let him know if he ever wanted to get rid of it. I think so. so Tom was surprised when John called him out of the blue one day with a proposal. what the other party’s desired outcome is. 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. A person who has to sell her home because her company is relocating her. Just running out of space. This is a good thing to know. Tom: $20. it’s still perfect. John: Tom: John: Tom: Tom. for example. you know. Are you finally ready to sell it? Yes. I guess I couldn’t take less than $20. you still interested in my rifle? Of course.000? That’s more than I planned. I’ll have to think about that. 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. Preparation 17 . Just as important is the why. because if the company does not provide relocation benefits. she might have to take a lower offer just to be able to move.000. Example 1 Tom had always admired John’s 1861 Confederate rifle. What changed your mind about getting rid of it? It is still in perfect condition. at some point. sure.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. Gosh. If you are the party making the offer on the house. I’ve been thinking of getting rid of it for a while. How much are you thinking it’s worth? John: Well.
BigManu: Rick. Well. Without some trust. has begun negotiations to sell his firm to BigManu Company. parties to a negotiation are not likely to reach agreement. the owner of a small manufacturing company. but then he will be happy to retire. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. fearing that this will put all of his employees out of work.Tom: Okay. No longer worried about John’s motives. Tom: Okay. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. we really want to buy your company. Rick needs to remain president of the company for the next two years. Example 2 Rick. I don’t think I can go higher than $18. we 18 50 Practical Negotiation Tactics .000. but I could get the money to you right away.) Tom: John. Tom now felt comfortable negotiating the price. let me think about it and I’ll get back to you. Conclusion Tom entered into the negotiations suspicious of John’s motives. 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.500 had an 1861 for sale. However. I’ve been thinking about your offer. it made the negotiations easier. He is two years away from retiring and does not want his business to fail before he does. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. but thought this might explain John’s sudden interest in selling the rifle. Was Tom interested? Tom declined. if you could come up a little—say $18. let’s do it.500—we’d have a deal. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. When Tom found out why John decided to sell his rifle. and now the two-year requirement has become a stumbling block in the negotiations. John: Well.
they decided to put their price on the table and revisit the issue after a price was agreed upon. Preparation 19 .cannot guarantee to you that ALL of your employees will be retained for two years. We still can’t find a way to do it. BigManu: You know we want you to stay on and manage this division for us. (Between negotiating sessions. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. and I hired every one of these people. Let’s talk later. let’s talk about the job guarantee you wanted. my employees will prove to you that they are uniquely able to run this place. In hopes of pushing the deal forward. Working as a division of your company. Rick: I built this business from the ground up. I just want them to have a real chance to show you how good they are. you will have a say in how the employees are treated. I just can’t go through with this sale. BigManu: We just don’t see a way to give you what you want on this. I need to give them some sense of comfort if this deal goes through. You’ll be in place to participate in our employment decisions. I just don’t want it to change after I’m gone. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. Without this commitment. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. Within the parameters of efficiency and effectiveness. and he accepted it subject to agreement on the two-year employment guarantee clause. and we think it’s an odd request anyway. Rick: These people are the best at what they do.) BigManu: Okay. The price they gave Rick was actually more than he had expected. We just can’t make good operational decisions with our hands tied.
you’ll have a guaranteed “in” to protect your people.BigManu: We intend for you to stay and become a big part of our company. that might work. 20 50 Practical Negotiation Tactics . This wouldn’t have anything to do with your own plans for the future. Let me get back to you. would it? Rick: Well. Conclusion By masking his real objective (giving himself two more years as president before retiring). he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. I certainly want to do all I can until then to protect my people. to tell you the truth. Surely you’ll be able to “protect” your people if they are as good as you say. Rich almost lost the deal. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. Rick: Well. but we won’t be completely tied to operations as they are now. I’m hoping to retire in two years.
and so on.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.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. Mother: Hush. (thirty minutes later) Bailey: So. and go play somewhere! Cybil: Well … Okay. too.) Let’s take all our Beanie Babies to my house to trade! Okay. it’s a deal. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. I like the frog. such as a hotel conference room. Cybil. they have the information they need at their fingertips. they control the breaks and environmental factors. 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. Make up your minds. 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. girls. Bailey: Cybil: Preparation 21 . how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. (Think of the showroom tactics used by car dealers. the frog is everybody’s favorite.
having set up beds. non-stop negotiations wore down the members of Team A. until we have a settlement. They were blamed for accepting the same deal that had been rejected only days earlier. as long as they met in the boardroom of Team B. Team B. Team A agreed to a settlement almost identical to the one rejected days before. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. was still going strong. while members of Team B were able to stay fresh.” The chief negotiator for Team B agreed. The firm deadline was only four days away. Team A was whipped physically and emotionally. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known.Conclusion Bailey. After forty hours of negotiating. About thirty-six hours later. meals. That’s why she wanted to go to her house. Team A agreed to change the meeting place. and other conveniences in the adjoining room. Both sides desperately needed to settle a property dispute. Team B had clearly used its home turf to gain a substantial advantage. The physical and emotional demands of 24-hour. not one member of Team A was chosen to return to the table. When negotiations resumed in two months over another piece of property. in their own familiar setting. although only ten years old. around the clock. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. 22 50 Practical Negotiation Tactics . Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month.
and show them the actual work that got done. though. Larry was thrilled. I was kind of surprised at how high it was. rather than give them the “advantage. Let’s get the guys back in who gave you estimates. If you think that the other party knows more than you do. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. about your bill. you are likely to resent them for it and hold out.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. If they tell us that they either Preparation 23 . I anticipated much less work. Larry: Well.” This can hold up an agreement and cost you in the end. Will: Larry. Believe me. based on objective criteria (think property appraisals in real estate). and they were much lower than this. This uncomfortable negotiation followed: Larry: Will. Will is a licensed plumber. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. I gave you my “family” rate. when Will presented Larry with his bill. and he and Larry have always gotten along. I did get some estimates from plumbers. When you first told me about your project. Larry: But Will. I would have charged anyone else much more. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. Larry: Just make sure you’re comparing apples to apples. Larry had expected to pay him for his time. When we got into it. Things turned sour. it became clear that all of those pipes had to be pulled and new ones put in. It was twice as high as the estimates Larry received from other plumbers before they started the project. After all. but was shocked at the amount of the bill.
he used his financial expertise to analyze the investments of the college’s endowment fund. He was disappointed in the performance of the fund. I certainly didn’t mean to offend you. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . The college’s budget officer was understandably offended. while she wasn’t an expert. Conclusion When the other plumbers looked at the work. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. From a look at the portfolio. Comparing the estimates to Will’s actual costs would have been counterproductive. The estimates would have been higher than what cousin Will charged. they would have had to revise the figures. 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. Example 2 After Stuart was appointed to the college’s Board of Trustees.disagree on the need for that work or that they would have done it for less. she had been investing the college’s endowment funds for many years. Larry: That sounds fair. Budget Officer: I don’t know what your problem is. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. and no one had ever questioned her performance. The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. they said. Had they actually prepared bids on the work. they had to agree that their early estimates were low. and decided to bring the matter up at a Board meeting. I’ll revise my bill to meet the lowest estimate you get.
but some of these stocks have really lost their value. At the end of two months. because she did not have the background in investments necessary to trust such advice. Okay? Budget Officer: Okay. but such a strategy also increases risk and costs more money to administer. As you know. there might be increased risk and some expenses for commissions. but I want to be involved in the discussions with them about what we’re asking. Stuart: Yes. 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. Now. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. Preparation 25 . if both of them demonstrate a similar strategy and produce better results after expenses. I have a suggestion. Budget Officer: Yes. but we can ask them to plan and cost out each move. In this situation. and its resources are limited.were stale. considering commissions and all. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. then you and I can talk about changing our investment strategy. Stuart: No problem. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. I don’t want you directing how they’re going to go. I don’t question that they were sound at one time. I find that a more aggressive investment strategy produces a better return. the college is a private institution. 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.
Shari: I’m four years older than the next-oldest. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. and ask the other party to add to the list. (3) more chores. Example 1 Shari. Mother: But your allowance is based on what you earn in your weekly chores. It will cost me more than $10—about $35 per week. wash the cars. Mother: That’s a large increase—and we just raised it last year! Shari: Well. a sixteen-year-old who lives with her parents and three younger sisters. what else can I do. cut the grass. not just an allowance increase! There is: (1) a $10 increase. Once you both agree on the list of things to be negotiated. if I give you an increase. 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. your little sisters will want equal treatment. Shari: Well. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. and for going out with my friends. has asked her mother for a $10/week increase in her allowance. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . I need more money for clothes and CDs. not on what you want to spend.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. (2) a later curfew. baby-sit your sisters. You can’t treat me the same! Mother: Well—so we’re talking about several issues. This strategy can build trust in the negotiation process itself.
And if you clean the whole house on Saturday. Now we have a package deal to propose … Preparation 27 . An allowance increase. was avoided. opens by proposing the list of items. while the mother won a Saturday house-cleaning and a night out each week.Shari: Right! Mother: So … I suggest no allowance increase. which the other children would have requested as well. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. Now it is time for each side to list their desired outcome for each item. and item #23 (the wellness program voucher). in the first session. item #11 (the clothing allowance). since all of their items were included as requested. 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. you get to stay out an hour later that night. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). The union’s chief negotiator. I’ll pay you $10 to babysit every Wednesday night. if you agree to our proposals on item #3 (the paid vacation schedule). The trading of items (where initial demands are discussed and agreed upon) begins. Shari got the $10 she wanted and a later curfew. Then a “win-win” solution could be determined. but unlike your sisters. while your Dad and I go out. Management agrees.
Then negotiations can resume on the remaining 43 items. 28 50 Practical Negotiation Tactics .Conclusion In most labor negotiations. the two sides will at this point sign and date the list of proposed items. other trade-offs are proposed and agreed to until only a few items remain. thus removing them from the discussion table.
000? No. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. He stopped and knocked on the door. One day. I live a few blocks from here. Bob followed the man home. on Briarwood Road. As the man got out of his car. my name is Bob Hillard. That’s a generous offer. (For the next three years. as he left the supermarket. 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.Tactic 6: Timing Is Everything The exact month. Bob made it a point about once a month to go out of his way and drive by the man’s house. Not even for. time of day. and general circumstances under which negotiations take place can substantially impact the outcome. $12.) Preparation 29 . he saw an elderly man get in his dream car and drive away. which turned out to be only a few blocks from his own house. day. Prepare carefully. but money doesn’t mean anything to me at this point in my life … Well. One day. say. he noticed a FOR SALE sign in the yard. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. I love this car—restored it myself. just out of curiosity. It was nice meeting you. and do your homework. Would you possibly be interested in selling it? No. thanks. Hi! What can I do for you? I’ve admired your ‘63 Impala for years.
I’ll see you on Monday. resulted in another 6-6 30 50 Practical Negotiation Tactics . The board members had met twice before.000. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. The partner organization. so I guess I will be selling it. December 31st.m.m. and the vote was a 6-6 tie each time. had issued a deadline of December 31st. A majority was needed to pass the partnership agreement. beyond which the project would have to be abandoned. Conclusion While Bob did not achieve his goal during his first negotiation effort. Follow me. as a matter of fact. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. to seal the agreement at the courthouse? Sure. 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. I’m moving to California to live with my daughter. and I promise to take good care of it. Then it’s a deal? Yes.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. if a seventh vote could not be found by the pro-agreement side. (after a careful inspection) It’s a very nice car! I’ll give you $12. Can I see it? Sure. for tax reasons. the proposal would die at midnight. Well. A third vote at 3:00 p. Can you come back on Monday at 10:00 a. I can’t take it with me. that’s a fair price. Example 2 It was Sunday.
For weeks. during an hour break in the meeting..m.m. Preparation 31 . because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years.. as predicted.. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage.. When the meeting resumed at 4:00 p. and the meeting was adjourned. in the end. At 5:30 p. The measure passed 6–5 at 5:45 p. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. and it worked. a member of the anti-project group left the room.deadlock. timing was everything.m. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. Then. the project had been stalled by 6–6 votes. Both sides caucused: The leaders on each side met to negotiate a compromise. A member of the pro-project group quickly called for a vote after the leader gave a signal.m. That effort failed. He planned for it accordingly.
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For example. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. If you prefer to take a firm and direct approach. if you want to begin in a friendly. for example. and Tactic #48 (Walk Away). Be sure you are aware of this at the beginning. Identify all outside influences and hidden agendas before you develop your strategy. Are there any outside people who might influence the process. such as a buyer and a seller or a city and its union. 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. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . uncaring approach (Tactic #9: Control Your Emotions. In some cases. or one-time-only. Tactic #12: Find Common Interests can be helpful. but in practice it will likely influence the whole process. might step in and help settle negotiations between a union and administration negotiators. Third parties sometimes have their own hidden agendas. such as a third-party negotiator. a third party can serve as a mediator (a legislative body. you must first evaluate your needs and those of your opponent. as well as their bargaining history and financial and political positions. Before you can do this. 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. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. After you have evaluated these factors. cooperative manner. decide whether the negotiations should be continuous. Tactic #43 (Nickel and Diming). Tactic #33 (Bluff). 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. as it can substantially alter the negotiations between two primary parties. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). The overall strategy chosen does not limit the use of other tactics.
but the inside was a complete turnoff. The agent explained that the seller was desperate. By assuming opposing roles. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). the seller’s agent called the buyer about the property. “Please make any offer—they are motivated!” The buyer responded. Weeks later. The buyer loved the location. For example. If there is a significant weakness in your position. The buyer said he wasn’t interested.” The agent took the offer to the seller. 34 50 Practical Negotiation Tactics . half-serious. His teenage sons had “trashed” the house.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. I offer half the asking price. with “All right. The desperate owner agreed. 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). and the buyer was able to completely renovate the house and still have a great deal. two people on the team will be more successful because they evoke different emotions from the other side. 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.
000. It’s a good neighborhood. Carol: Maybe not. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. We also think that the neighborhood has improved over the last few years. Each time. so think this through well ahead of time. If you consider the demand ridiculous. Your demand should be high enough to give you room to compromise. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. However. Planning a Strategy 35 . six years ago you bought it for $60. The market hasn’t gone up that much in six years. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. it is likely that your opponent will. Carol: We really want to sell. First.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. You are not likely to get more than you request.000.000 is very high. Surely there’s some flexibility in your asking price. but certainly not exceptional in any way. we think $160. Carol wants $160. one buyer shows some interest. And I don’t see a lot of difference in the neighborhood. She has had it on and off the market for the last five years. and then look at the demand from your opponent’s perspective. but the redecorating is of little value. as well.000. Buyer: The air conditioning might have increased the value of the house. so do not underestimate what you might be able to achieve. but not so high as to end the negotiations before they begin. After all. with no success. but quite frankly. but we simply can’t take less than $160. Buyer: We really like the house. your request must not be so low that the other party concludes that you are not negotiating in good faith. Be realistic. but the house has increased in value. Finally. and just refuses to reduce it. Anyone buying the house would want to change wall colors or add new carpets.
The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites. and then $10. though. we are certainly interested in your request to “buy” our firm name to use in your city. When Carol refused to budge. Carol drove off a potential buyer by setting an asking price that was just too high. or she has unreal expectations.Buyer: What if we offered you $100.000 immediately.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. enjoying a statewide reputation for quality representation. Neither Edward Bits nor Edmund Bites.000? Carol: We really can’t take less than $160. In any event. We’re curious. the buyer took it as a signal that either Carol didn’t want to sell. The other law firm was prepared to pay $100.000. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. Here’s how the initial negotiations went: Partners: Well. Inquiries to other law firms were not very helpful because in almost all of the instances. as to how you think the name is going to benefit you. The partners are interested in selling the name. the founders of the firm.000 offer by coming down in price at least a little. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. but they have no idea what the value of their firm’s name might be in this nearby city. 36 50 Practical Negotiation Tactics . were still alive. Example 2 The law firm of Bits & Bites was a Sioux City institution.
In every instance. you have a very solid reputation there. To offer it now would be an insult. (surprised) Well. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . expect to pay for that. What number were you thinking about? Well. Yes. it would be impossible to create a new name out of the names of our key partners. and then 10% of your profits each year for as long as you use the name. And even though you don’t have an office in our city. (concerned about loosing the opportunity) Wait. I really don’t feel comfortable doing that now. one of these two attorneys carries the surname of the firm they are leaving. we want $500. Let’s just pretend this didn’t happen. If at any time we feel that you have “harmed” our name. that’s just our initial figure. Using the Bits & Bites name can only enhance our profitability. but we get to keep all of the money we’ve received up to that point. we reserve the right to withdraw our permission. I guess this is just not something we’ll be able to pursue. We weren’t really thinking about that amount of money. Give us some range. Thanks so much for meeting with me. we do. that you anticipate to build a very profitable law firm. And we. because we were not even close to that number. Well. of course.000 initially.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. We should assume. So. We probably won’t be insulted. I’m kind of embarrassed now. that is a very high number. starting with the ten partners you describe. then. because you are in the state capital and your firm has handled a lot of high-profile political cases.
rather than negotiate. 38 50 Practical Negotiation Tactics . The price they were willing to pay would have indicated what the naming rights were worth. Either side could have asked for too much. In this situation. because there was no “objective” criteria available to help them set a reasonable price.Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. It immediately dropped the idea. Bits and Bites should have let the prospective firm make the first offer. Both parties were probably at a disadvantage. since they had initiated the contact.
Half what it cost us new. you’re really moving! I hate to see you leave. (bad guy) and implies that his or her side will hold firm on their demands. I’ll go home and you can call me if you two can reach an agreement.400 if the catcher and can are included. only three years ago.200. Andy and Paula: Yes. and I know how you take care of things. Peggy: I assumed they went with the mower. etc. Peggy: So. I don’t know what the deal is now. Peggy. Andy: I want them… Paula: Go ahead and take them. Peggy: Planning a Strategy 39 . since they are sitting out in the driveway with it. And take the leaf-catcher attachment and the gas can. Andy and Paula.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. angry. Andy: No. what’s your price? Andy: $1. Peggy: That’s fair. so I’ll take it. Paula: Go ahead and ride it home. Andy: No. not for $1. I want to keep those. while another acts difficult. we won’t need it at the new condo. Example 1 So.200! We should get $1. I heard that you want to sell your riding mower. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. I can use them. Peggy: I’m hearing one thing from Paula and another from Andy. They cost about $300. threatening.
Miguel: But not at this ridiculous rate. the quality of the technicians’ work. 40 50 Practical Negotiation Tactics .000 per month is one of the highest in town.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Miguel: Well. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). we’re here to negotiate a new service agreement. For the past three years. And we want to change the 24-hour service response time to 48 hours.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. perhaps even unintentionally. your account has taken too much time. causing our reps to spend hours on the road. Sandy: What? First of all. Sandy. Liz: But we still want to renew your contract. Sandy.000 in service calls last year alone because your damn people don’t take care of the equipment. firm offer if they decided to continue negotiations. Miguel: I’ve figured $4. we’ve been fairly happy with your responsiveness. She very wisely recognized the routine and forced Andy and Paula to give her a clear. We estimated that it has cost us more than $50. She realized that it put her in an impossible negotiating position. and your training programs. Let’s talk. And we need to add a clause that holds your company responsible for machine damages. You are located outside our primary service area. And cut the training hours from 55 to 20. your rate of $3.
but Miguel’s right. Miguel! We’ve worked out a deal I think you can live with. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Sandy. (Three hours later) I’m back. with a position he knew was unreasonable. I’ll explain on the way back to the office. What can I do? Let’s try to negotiate something reasonable before Miguel gets back.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 believed that she was able to avoid a terrible deal and negotiate a fairly good one. I’m afraid our relationship is over. I want to keep you as a customer. I’ll stop back about 2:00 p. you two? Good news. Any luck. Liz. I’m going on to lunch. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Sandy. If not. these terms will put me out of business—I’m a small 20-person operation.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Sandy. Our customer base has grown. I hope you can meet my terms. Planning a Strategy 41 .
10 a minute rate at my office location. because we have had a sick relative out of town and we used long distance a lot this past month. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company.00 a minute.Tactic 9: Control Your Emotions Stay cool. It seems that the rate you are charging me on my home phone is $1. and might even harden your opponent into an unfavorable position (for you or for both of you). So. made some very good purchase decisions for his small business. He had. The fault was partly his because he did not stay on top of changes. How may I help you? Hello. 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. This will put you at a distinct disadvantage from this point on. such as deals on computer packages and phone services. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. 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. I noticed this. in fact. He decided that the best approach was to act indignant when he spoke to the company representative. he was very unhappy. I have a problem with my recent bill and my billing rate. but I recently was sold a $. 42 50 Practical Negotiation Tactics . 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.
how would anyone who might only have residential service even know to ask? Well. to begin now. but this was quite a shock.I expected the bill to be higher than usual.10 per minute rate on your long-distance service. (beginning to sound irritated. of course it is not always possible to give existing customers some of the “offers” we have out. I realize that that might be the rate I started paying when I first took your service over eight years ago. Customer representative: Let me pull up your account. we certainly would have discussed your options. Had you brought this to our attention before. and I also realize that if I had examined my bill closely. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . I would have known I was paying too much. It hasn’t been increased at any time. But I am able to offer you a $. But as a very good customer of yours. Well. 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. I would think you would have given me the best rate you offer new customers. I see that the rate you are being charged is the rate we offer for the type of service you have with us. Mike.
but I am very angry with Over-the-Air Company. which should rightly be $50.10 per minute. If you can’t get me someone to talk to. between controlled. We certainly don’t want to lose you as a customer. after all. don’t think this is directed at you personally. In doing so. but I can’t do that. there’s no reason for this conversation to continue. The latter would not have produced the desired results.Mike: I would imagine so. 44 50 Practical Negotiation Tactics . (with a much angrier tone) Madam. either. Mike’s willingness to show a measured “flare of temper” brought results. and I should be treated with more respect! I’m sorry. 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 $. a long-time customer of your company. He was walking a thin line. controlled voice) I need to talk to someone who can do it immediately. Wait—I’ll get my supervisor. strategic anger and abusive behavior. however. I would hope that you would credit my account for this better rate for past service. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. The best we can do is fix the rate for the future. she kept Mike as a residential customer as well as a business customer. and I want to speak to someone in authority so I can terminate my service. I am. But I’m looking at a $500 longdistance bill. I … (interrupting and in a stern.
I’ve got to have the employees with the most experience to protect this place. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. 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 .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. Owner: Now. The owner told the employees that he was worried that during the overtime shifts. and it’s not what we’re even talking about. and you just can’t be too careful. and that they should be asking for a fairer base wage for the work they do for you. they would become dissatisfied with their pay and want their base pay increased. 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. 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. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. lesssenior employees might be at greater risk of injury because they have to handle explosives. Working with fireworks is working with explosives. The employees’ negotiator finally decided to use “indignation” to break the stalemate. that’s just not fair. and it’s getting old. On those overtime shifts.
I’m not coming back. Then you can’t have it both ways. That’s all. All I’m saying is that the most-senior employees have to be on the overtime shifts. either the employees are properly trained. he became more reasonable. You are not addressing the real issue for you: money. not at all. No one who takes a job with us can be unaware of that. In practice. The negotiator was also running a risk with his flare of temper. Until you’re ready to talk about that. now. 46 50 Practical Negotiation Tactics . or they’re not. But we protect our people. What if we were to agree that the senior employees could refuse half of the overtime offered to them. Had the owner let him leave. Sit down.) Now. (He begins to walk out. though. But the fireworks business is a business that involves risk. most of them continued to take all the overtime they could get. but not all? Conclusion The owner was on shaky ground with this one.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. Either they are properly protected. the negotiator would have had to find a way back into the negotiations without losing ground. don’t be so hasty. The end result was that the most-senior employees did win the right to refuse overtime. After the employees’ negotiator threatened to walk out. sit down. or they’re not. The safety of the plant demands it! (standing up to leave) This is just ridiculous.
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. a well-known negotiations professor from Harvard University. The second party then decides to either buy it at that price and pay the first party. Susan. Planning a Strategy 47 . However. 3) They can agree to sell the object to a third party. All the rest of the estate has been divided among the family. with the highest bidder paying the amount to the other side in compensation for their loss. called the “Reciprocal Buy-Sell Offer. you’re the oldest.” is the recommendation of Howard Raiffa. Then Susan. Mike: Mary Anne. 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. with winner taking all. A fourth option. Mike. since this one is in perfect shape and it was Mother’s. 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. The first party decides on a price for which he or she will either buy or sell the object to the second party. Both sisters covet it. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). I’m willing to pay or let it go for $800. 2) They can flip a coin. the executor of the estate. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. (two days later) Mary Anne: Well. and split the proceeds. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500.
Lectures on Negotiation Analysis. 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. Two business partners had been working together for ten years to build a successful business. They accepted his suggestion to use the “reciprocal buy-sell strategy. I’ll pick it up tonight. Both came to Raiffa to help negotiate a settlement. They thus were able to determine the highest price each was willing to pay for it or receive for it. I choose to buy it. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. I suggest a slight modification to the process. and then decide how much more “emotional value” it held. Both sisters felt that the process enabled them to resolve the issue fairly. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). to submit a sealed offer to buy/sell the business sixty days from today. After I open the bids. You will both agree. Here is my check for $800. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. (sixty days later) 48 50 Practical Negotiation Tactics . in writing.” Howard: Since in this case you are talking about a multi-million-dollar business. which will bind us to the outcome.Susan: Mike: Well. Thanks for making this last step as easy as possible.
The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. and we close by July 1st. your bid is $190 million. Agreed. your bid is $170 million. Bobby was willing to pay more than Abe to remain sole owner. you agree to sell your half-interest to Bobby for $180 million. and both men had carefully estimated the market value of half the business. And I will arrange financing to pay you $180 million to become sole owner. but only if they could become the sole owner. Planning a Strategy 49 . Abe. 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.Howard: Abe: Bobby: Abe. and to close within ninety days. I will arrange to sell him my half-interest for $180 million. Bobby. Conclusion Both parties wanted to keep the business.
” but there were substantial differences in price—differences that the wife did not see as a problem. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. and the husband felt like he saved them hundreds of dollars. he decided upon a strategy: First establish himself as the “dimension expert. The couple decided to limit their selection to those rated “excellent. When he showed his wife the detailed spreadsheet. This approach can also be reversed: The wife in this situation is a banker. and forcing him or her to control the discussion of the issue. It can also work in reverse: establishing the other person as the expert. This strategy worked.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. Based on seating capacity. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. He thus ended up having greater negotiating power. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . and created a spreadsheet to compare the five best-rated couches on their list. The husband found the dimensions of the couches in the brochures and Web sites. Conclusion The husband became the “expert” in this situation by doing the homework. the one he wanted (one of the least-expensive) was superior.” and then argue for the frugal alternative. When it came to comfort. the one that was the most expensive was superior. Looking at these statistics. They both expressed an interest in finding a couch that offered the most “interior” space. 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. she glanced at it and immediately deferred to his opinion.
he argues that she is the expert. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are.investment decision or deal with an error in a bill. 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 should therefore handle the problem. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. you gain an edge when negotiating a new plan for your company.” If you spend many hours learning about Health Maintenance Organizations (HMOs). and Point of Service (POS) plans. Preferred Provider Organizations (PPOs).
If this was chocolate icing. I missed dessert the other night because I had to get to baseball practice.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. they saw that there was one piece of cake left over from their mom’s bridge party. and their mother was tired of it. like we usually have. neither of you want to be embarrassed at the outcome. I also took out the garbage last week without being asked twice. The boys quickly huddled. This time. Russ: 52 50 Practical Negotiation Tactics . and then asked their mom for a chance to negotiate with each other. and I really love the banana/butternut/ sour cream frosting on this cake. Example 1 When Russ and Bill got home from school. When they boys returned. she decided to try something different. Usually. you both want to complete negotiations by a certain date. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. here’s what they said to her: I think I should be rewarded with the piece of cake. The two boys fought over the last piece of everything. I wouldn’t care so much. These positive things are part of your goals and objectives. and neither boy was very happy. point them out at the very beginning of negotiations and refer to them throughout the process. particularly when things seem to be at a standstill. Unless you can convince me otherwise. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. They immediately began to fight over it. you want to reach an agreement that is favorable to an outside party. and so on. the last piece of cake will get thrown away. because I am so conscientious about my paper route. That simply rewards your continual squabbling. she made them share whatever it was. Be clear on what you have in common at the start.
One day.m. and keeps it open longer so she can attract customers on their way to and from work. That sounds like a wonderful solution. Marilyn originally set her shop’s hours for 10:00 a. The last cake we had was chocolate cake.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice. and her children were in school. I helped with the bags without being asked twice. We really want you to go back to your original times.m.m. your new shop hours have caused your customers to park in our parking spaces. and I really like white cake. and better than a fast-food restaurant with late-night hours and a drive-through window. she got a visit from some of the residents. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. This cake is white cake. I can have the part with the icing and Bill can have the part with the cake and filling. We realized that if we cut the cake lengthwise. Residents: Marilyn. and that’s not my favorite either. Customers have started to park in nearby apartment lots. Now that her children are in college. because there is no parking along the street during morning and evening rush hours. so these hours worked out well. It was the type of shop the nearby residents preferred. Planning a Strategy 53 . so that your customers can park on the street. 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. to 3:00 p. 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.
So. my customers can’t park on the street. And we don’t think you want your customers’ cars towed.m. Do you? Marilyn: No. Between 7:30 a. if I go ahead and open the shop at 7:30 a.00 a. Okay. If you need to have the shop open more hours. But in order to keep my new customers. I really need that extra income to stay in business. let’s see what the options are.m. But I really am increasing my sales by being open longer hours. 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..m. Lets try it.m. Marilyn: Conclusion Marilyn needed the extra parking. then we’ll try and accommodate you.m. we have to be willing to tow the cars that violate it. and the residents needed Marilyn’s shop.I’m sorry this is happening. and see if it works. and is probably empty in the afternoon if they haven’t gotten home yet.m. and 9:00 a.. I don’t think that would be very good for business.m. and between 4:00 p.m. Most of our residents are gone by 8:00 a. Identifying their shared interests caused the nearby residents and the customers to reach agreement. and 9:00 a. I have to convince them to come before work. rather than after work.. the off-street lots probably won’t be used by my customers. or so anyway. The shared parking arrangement did work out for Marilyn. The parking lot used for apartment residents is probably full from 7:30– 9. and I close at 4:00 p. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a.m. and usually the car is gone by the time a tow truck shows up anyway.m. It is very costly to have cars towed. 54 50 Practical Negotiation Tactics . if residents haven’t left for work yet. We think they’ll be agreeable to the morning parking. and 6:00 p.? Residents: We certainly want you to stay in business here.
Example 1 Four adult children have gathered at the home of their recently deceased mother. how should we go about dividing up the furniture and possessions? I can’t talk about it.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. Well. That will take days! I haven’t been in this house for twelve years. 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). Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. How can I do that? You all live in this town and you know this house. A few hours? I can’t—I’ve got to leave shortly for the drive home. the first. one at a time: the youngest. We just don’t have the time … We’ve got to do this—the house is sold! Okay. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. let’s all take a few hours to look around. Then we can sit down at this table at 3:00 p. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay.m. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. A deadline can help you make the best possible agreement in the shortest amount of time. and start choosing things. I don’t. But at Planning a Strategy 55 . etc. Well. we can each take turns selecting things … Like each tool or dish. let’s all take two hours to look around and make a list of things we might want.
being the oldest. And besides. Example 2 Allan: As the negotiating team for the city. can sell or give away what is left. However. we all leave.Sue: Mary: Jenny: 5:00 p.m. Allan: Let me confer with the city attorneys. All of us must come back before Saturday to take what is ours—agreed? Okay. 56 50 Practical Negotiation Tactics . Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. and I appreciate your interest in the historic structure. David: I understand your concern. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. this is December 29. Okay.. your attorneys know the tax laws. if I cannot carry a negotiated and signed deal to my board by noon on December 31. December 31. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. Agreed. Sue. if we are not finished. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point.
Let’s continue. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired.) I understand the December 31 deadline.Allan: (One hour later. Conclusion Knowing the external deadline gave David a significant negotiating edge. Planning a Strategy 57 . and I don’t like it. we can’t get the reports we wanted in 48 hours. Obviously.
as well as those of the other side. so he was able to prevail upon her to let him continue. 58 50 Practical Negotiation Tactics . and Jason knows he is getting a D in Spanish. and this usually means having all the right information. I’ll give you money for it. Mom: All right. but his grades are good. But don’t lose it again.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. Then the teacher went back to the first one. He knows that a D will mean that he will have to change the way he studies. The objective is to negotiate from a position of strength. but I have a problem in my Spanish class. Unfortunately. His mother disapproves of his study habits. before your opponent tries to catch you off-guard. but remember that both sides have weaknesses. Mom: I gave you money to buy a workbook a few weeks ago. Did you buy it? Jason: Yes. We had one at the beginning of the semester that we were using pretty often. we need to talk. while watching TV. I bought the second one. as well as strengths. and I missed some assignments. and one of the ways to do that is to reveal a weakness at the beginning. He decided to preempt the discussion in order to make the best deal. don’t get mad. first-quarter grades are coming out at the end of the week. and you can neutralize its effect on the negotiations. Mom: What’s that? Jason: A few weeks ago I lost my workbook. There will be times during a negotiation when you will want to catch your opponent off-guard. Jason: Mom. Have a clear goal in mind AND all the information you need to make your points. One day mine disappeared. I’ll need to buy it again. Control the use of the information. but that was actually a different workbook. and we used it a couple of times. Now. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later.
my study habits are okay. Mom. then I’ll agree to make changes. I’m sorry. Although his Spanish grade was only a C+. I don’t think you’re taking your schoolwork seriously enough. but I think you do need to change your study habits. And I know I have to be better about getting in all of my assignments. Since I missed some assignments.(maybe C+). And those are hard classes—Algebra.Jason: Another thing. Thanks. The work I did turn in was fine. Obviously. she trusted it more. Jason’s decision to warn his Mom ahead of time rather than have her see the D on his report card gave him an advantage in the negotiations about study time. Pizza Boy was interested and had even made inquiries about the property. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. I think I can do that. Environmental Science. and the D is directly related to my losing the book. His explanation made sense. so there’s no reason to think I need to change my study habits. Example 2 Jane once owned a piece of property she wanted very much to sell. Its owners found out that at least three other buyers had been in contact with Jane. but all three deals Planning a Strategy 59 . or borderline B. B. It’s because I didn’t have the book. English. If I don’t pull the D up to a C or better. The location was ideal for a convenience store or a fast-food restaurant. Mom: Well. I’ll give you more time. he was able to continue to study the way he wanted to. But that Spanish grade needs to come up to a B!! Jason: Okay. and since he offered her the information up front. Conclusion All of Jason’s grades did improve over the next quarter. all right. Jason: Spanish is just one class. All of my other classes are A. Mom: Well.
Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives.had fallen through. though. I know. A tentative deal was signed. Pizza Boy was prepared for her call. You are a big enough corporation to withstand her objections. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. They decided not to fight a disgruntled neighbor. When the neighbor heard about the new buyer. The real problem. either. since they were well aware of the negatives. I think you’ll find that this is only one person. and it’s zoned for commercial use. Pizza Boy: Well. really. Pizza Boy: We’ve checked the property out. When she contacts you. we’re not interested in neighborhood fights. it’s only the neighbor to the right of the property who has a problem. I’m very happy you’re interested in my property. Furthermore. But unlike your company. Jane: Oh. Pizza Boy: Well. there were no unpleasant surprises to stop the deal. however. however. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. the other interested buyers already have businesses in the neighborhood. I’m sure. What are you asking for the property? Conclusion Jane told them her asking price. What are her grounds for complaining? Jane: She doesn’t have any. she started her campaign to keep them from closing the deal. let’s assume that you are right. which was way below the price they were actually willing to pay. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. she will want you to think it’s the whole neighborhood. 60 50 Practical Negotiation Tactics . Actually. This is how the negotiations went: Jane: Pizza Boy. and was able to politely ignore her.
000 Buyer Initial Offer ($21. The negotiator firmly states that it is their best offer in an attempt to gain a nice.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. Carrell and Christina Heavrin.750) Target Point ($24. 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.500) Resistance Point ($25. 2: Distributive Bargaining Process.500) M $21.000) Settlement Range ($22. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.500) Fig. for example. Adapted from Labor Relations and Collective Bargaining. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000 22 23 24 25 26 27 Initial Offer $28. quick agreement. by Michael R. None is as important as the first one. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. Exchanging Initial Offers 61 . in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party.000) Target Point ($23. such as proposing to continue at the current rate or price. (2004). as illustrated in the following figure: Seller Resistance Point ($22. This is a practical starting point that will not anger the other side (and might even be expected). Another common strategy is to start with the status quo. “Distributive” bargaining (“win-lose” or “zero sum”) is used. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.750–$25. 190–192.
it is termed the settlement point – not the “right price” or “fair price. In the example.000) is reasonable. 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. each initial offer ($21. 62 50 Practical Negotiation Tactics . After initial offers are exchanged. See Tactic #18: Agree on Something As Soon As You Can. 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. and is the range in which most negotiations actually occur. if the buyer’s initial offer was $25. the other side does not agree to this value). thus starting out on a positive note. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. When the two parties agree to a price within the range. A target point is the desired settlement value a party has set as a goal when negotiations begin. usually.” but the settlement price. thus producing a true “win-win” negotiation. these points have set the outer limits. The settlement range is the distance between the resistance points. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). 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).000 and $28.In this example. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing.000. the process quickly narrows to the range between the initial offers. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package.
You can invite up to 20 of your friends. A caucus gives you an opportunity to work out problems with your own team in private. Shelly. There are many ways to use this strategy. without revealing their ideas to the other side. Unfortunately. We’ll just have chips and soda. because it might disturb the neighbors. so we’ll have the party from 7:00 p.–10:00 p. We don’t want it to be a late evening. the negotiations got out of hand when Shelly’s dad forgot what had been decided.m. If negotiations seem stalled. or if a member takes on a role in the negotiations that has not been assigned to them. Mom: We’re planning on having your party here on Saturday night. a caucus can be used as a break to calm the situation down. If the negotiations have suddenly gone in an unanticipated direction. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. it gives the parties an opportunity to reassess where they are and determine if everyone involved agrees that they should be heading in this direction. 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. If the negotiations are heated. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. make use of the opportunity to call for a caucus. If the team is feeling pressure to concede on certain items. and I already have 25 names.Tactic 15: Caucus If you are part of a negotiating team. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . To do so in front of your opponent would obviously undermine your team’s position in the negotiations.m. Her mom and dad had already talked about it privately. so her parents sat down with their daughter to discuss the details. and presumably had an agreement.
We could play records and you guys could dance. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . (excited) That would be so cool. 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. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. And they can’t go home at 10:00 p. Jerry from down the street is in a really good band that all of the crowd likes. Shelly. okay. That sounds like too many for here at the house. That would be great! It would keep everyone entertained. Your dad and I already talked about this and agreed that 20 guests would be the limit. I think the band would be fine. Time out! Dad. we’ll call you when we’re ready.” They would never expect a party to end before midnight. Dad. Actually. we could rent the VFW hall. I guess the VFW will work. Oh. (During the caucus. we need to talk. I’m sure we can ask them to tone it down a little. And midnight is definitely too late. Mom! This is my “Sweet Sixteen” party. We’ll get a band—everyone does. (with some irritation) I’m not sure. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. It’s special!!! Well. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. I think we can handle a few more kids—how about 35? And midnight sounds okay. In fact.—that’s so “baby.m. and then the number of kids won’t matter.
Agreed. When they called Shelly back in. And we’re serving chips and sodas. is for little kids!! No. we’re going to rent the VFW hall. and you can invite more friends. All right. A DJ? I guess that’s okay. can’t we? No band. But you are limited to 40. But we can have the band. please!! 11:00 p. Example 2 The contract negotiations between the company and the union had been going on for days. her mom presented the revised proposal. Okay. sorry. but we’ll schedule the party for 8:00 p. to 11:00 p. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. but your dad and I agree on getting a DJ to play. and not a huge production.m. Your mom and I agree—11:00 p. too? No way!! I want presents!! Conclusion In spite of their prior planning.) Okay. That way. Dad. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 .m.m. and we will need to approve the list. That’s so lame. this mom-and-dad negotiating team became unglued during the negotiations. midnight. Does that mean no presents.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. causing them to lose control and make compromises they hadn’t intended to make. but no Sweet Sixteen birthday party decorations.m. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. we will be better able to chaperone.
The company’s negotiator didn’t recognize the misunderstanding. Union negotiator #2: Please—just a moment outside. With the cost of college educations so high. What is this. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. The tuition benefits will encourage the workers to be prepared for new job opportunities. 66 50 Practical Negotiation Tactics . many will want to use it for their children’s education. Tuition in place of health insurances? They’ll think I’ve lost my mind. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. The union’s lead negotiator misunderstood the proposal. and the following conversation occurred. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No.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. 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. it’s a good 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. Union: (angrily) I’m not presenting this proposal to my people.
and I apologize for explaining it poorly. the parties returned to the room. I think that what you’re proposing is a really good idea. Now. we’ll be back in 5 minutes. I thought that the contract would cover one or the other for everyone.Union: Union: Company: Okay. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. and the parties were able to complete their negotiations. Negotiator #1 regained his footing. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session.) I’m sorry. let’s move on. Exchanging Initial Offers 67 . Good. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit.
but he makes a mental note to use color as a “throwaway” item. this conversation takes place: Hobbs: Yes. I know. However. not revealing that the item exchanged is a “throwaway. when the two sides are only a few dollars apart. A has gained something of true value and given up nothing he values in return. you are making $200 profit over the true dealer’s cost. we’ve got expenses and we need to make some profit.” Party B thinks that A has sacrificed one important objective to gain another. Example 1 The buyer. But for this price. but … Salesman: But what? Hobbs: Well. He doesn’t really care about the color of the new vehicle. and noticed that none of the vehicles have a green exterior. Hobbs. according to the Consumer Reports listing of the cost of the vehicle.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. according to my figures. so be sure you present them in a way that suggests importance. 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. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . I’ll go get him. I can go to another dealer and get a green exterior—the color I like best. Here’s how it works: Party A exchanges the item for something of true value. it’s a great car and a fair deal. you don’t want your opponent to know what these things are. Salesman: Well.” Throwaway items are those things that hold little or no value to you. At a point late in the negotiations. but in reality. Hobbs: Yes. It is a useful tactic in any negotiations. Mr. quickly checked the dealer’s inventory of sport utility vehicles in stock.
no it’s not.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal.. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). At the very end of the negotiations. Miguel. 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 .. The days in question are: Exchanging Initial Offers 69 . All three employees must agree to the schedule. Employees will be paid time-and-a half for each of these days. 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 three are sitting at a lunch table to discuss the schedule. Conclusion Mr. and seniority will be used to determine who gets to choose the first day.. Example 2 The office supervisor told the three internal sales representatives (Jenny. 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. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. I’ll take the red one for $100 less. The manager was convinced enough to sacrifice a final $100 for the throwaway. Hobbs successfully chose color as a throwaway item. Then we have a deal.
31. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. December 31 Miguel: November 25. She proposes to work five days. 2 In the first round of negotiation. 24. They have decided to start over. December 27. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. 30. A second and third round produced the following allocation: Jenny: December 23.November 25 (the day after Thanksgiving) December 23. 70 50 Practical Negotiation Tactics . January 2 None of the three are totally happy with the results. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. but that is a secondary consideration. each made a first choice of days they will work. 26 Miguel: November 25. 31 January 1. January 1. December 30. if they let her choose the two days she will be off and the five days she will work. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. She got what she wanted by giving up something she did not value: the two other days. They agree. 26. 30. This would allow Jenny and Miguel to each work only two days. 2 Jenny: December 23. They all agreed to their schedules. 27. January 1 Carolyn: December 24. She would actually prefer to work the extra days and get paid time-and-a half. and each chooses their days to work: Carolyn: December 27. in exchange for giving up earlier choices due to seniority. December 26.
we need to sell the house. one might package all of the financial issues in one group and negotiate on that package as one issue. were faced with the task of selling the house and disposing of their mom’s personal belongings. 300 shares of stock in a pharmaceutical company. realizing that the total cost of a deal might make or break the agreement. Anne and her sisters. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. a house valued at $250. Example 1 When their mother died at age 82. three ways. but I’d like to talk about the house and the furniture. For example. can indicate that something you think is minor is really a major concern to your opponent. for example. it is often helpful to package the items in distinct groups and then deal with each package separately. along with the cash. and a collection of antique furniture. they met at the house. A reluctance to include one particular financial item with other financial issues. Autumn and Angela. The house and much of the furniture has been in the Exchanging Initial Offers 71 . Anne: As I see it.000 with no mortgage on it. their mom left specific pieces of jewelry and art in the will to each of the girls.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. The process of grouping items can be an educational exercise because the response to one party’s suggested packaging of items might reveal how the other party views the various items on the table. and the stock and distribute the proceeds. 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 antiques. In addition. The estate’s assets included a checking and savings account totaling $450. When the girls decided it was time to talk about the estate.000.
Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. Autumn: Sounds good to me. and now that we have them. so I will be able to keep tabs on it. and if we wait a couple of years. 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. So we agree: We’ll leave $30. With no one living here. And we’ll fix the house up. Mother was born here and grew up here. but the operative word is “give. Angela: Now’s not a good time to sell either the stock or the house and antiques. I’d like to talk about the art works Mom left each of us. There was a reason why she gave us what she did. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . Why don’t we leave some of the cash in the bank. Frankly. it’s a magnet for vandals.family for years. Anne: But that means we have to continue to take care of the house and its contents. we’re really free to do with them what we want. In fact.” She gave those things to us. What would you think about agreeing today to distribute the cash and stock three ways. I’d really be interested in talking a trade for some of them. we will have a more valuable asset. Soon. and letting everything else wait for another discussion. we can sell ours. If Angela wants to hold on to her stock. We’ll split the stock three ways. Angela: I live close by. we’ll discuss again what happens to the house and the antiques. and use it to fix the house up? Then when we make a decision. I’d like it all to stay in the family. don’t you think? Angela: Maybe. If we want. she’s free to do so.000 in the bank and distribute the remainder three ways. It’s a buyer’s market now. Autumn: I think its awfully soon to be making these kinds of decisions. we’d get a lot more for them. Anne: Okay.
The second: working conditions (work schedules and promotional opportunities). what kind of paid leaves there will be (personal. Employees: We’ve got a lot of items to cover. The third: Ben- Exchanging Initial Offers 73 . May I suggest that we divide the items into three areas. The following tasks needed to be a accomplished: establishing basic pay schedules.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. and establishing a work schedule to accommodate evening and weekend clients. deciding whether there would be annual wage increases as well as merit increases. etc. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. health benefits. and the art works—will be more difficult. the jewelry. and the assignment of the limited number of parking spaces. but I’m making no commitment to trade. the antiques.). Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. including benefits for partners in non-traditional relationships. The negotiations on the other items—the house. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. Anne: Same with me. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. Angela: That’s fine. funeral. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). sick. Several issues also needed to be addressed: the ability of employees to move up through the organization. vacation. tuition benefits.
That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. Employees: Okay. as well. to be honest with you. I think it also makes sense to include tuition benefits in the Working Conditions category. we are an agency supported generally by public funding. Executive Director: Sounds like a good agenda. because they’re really an incentive for better performance. but the parties were able to come to agreement because the wage issue had been resolved. So I’d like to see us get through the wage issues quickly and then move on. but I’d change your list. paid leave times. that makes sense. Also. 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. 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. and the parking spaces). Later negotiations were difficult. the paid leave categories are pretty clearly defined. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. Wages should not include merit pay raises. Executive Director: I think it’s a good idea to group items together. Executive Director: Well. Let’s get started. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. I would include that under the Working Conditions category. tuition benefits. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be.efits (health insurance. 74 50 Practical Negotiation Tactics .
Now. no matter how insignificant. An initial agreement. It was her idea to buy the house and go into debt to furnish it. too. are divorcing. Kathy borrowed more money to go to graduate school full-time. It indicates to your opponent that you are a reasonable negotiator. They were in the middle of buying a house. Kathy’s first job paid more than Tim’s because she had a graduate degree. Tim: You might be leaving town. Tim worried that he would be stuck with all of the debt.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. without suggesting any changes or modifications. rather than disposing of assets. and that you are entering into the negotiations with the intent to reach agreement. because Tim felt that Kathy had taken advantage of him during the marriage. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. You signed those papers. Tim began working right after graduation. Exchanging Initial Offers 75 . They met and married in college. They have no children. and both have good jobs. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. Kathy was asked by her employer to relocate to another city. You can also make an effort to agree on something your opponent offers early in the negotiations. after a brief marriage. The discussion might become very heated. sets the stage for mutual respect and communication. and she agreed. with her promotion sending her out of town. and might not even be able to keep the house. The couple hoped to do the divorce without involving lawyers in order to save money. Their “property division” was mostly about dividing their debts. They had also furnished their house on credit. Example 1 Tim and Kathy.
If both of us had been working the year I went to graduate school.Kathy: Hey. They also agreed that Tim wouldn’t have to pay her that amount for five years. When we bought them two years ago.. about the house and furnishings. and XYZ Co. The monthly payments are about the same. I got my convertible. I don’t intend to “stick” you with anything. Tim: Well. I think it only fair that I take over repayment of all the school loans. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. I can hardly argue with that. hold on. an art gallery. Tim: Okay. Kathy: I suppose we should look at the school loans next. Okay. Kathy: Now. 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. Example 2 ABC Company. 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. yes. and he could pay it in annual installments over a five-year period. as you remember. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. a wholesale art dealer. 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. ABC usually uses UPS 76 50 Practical Negotiation Tactics . we would have paid down our school loans more. and you got your sports car. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. I think that makes sense. Frankly. The first thing I’d like to talk about is what we are going to do about the cars.
ABC refused to pay WeCanShipArt until it received payment from XYZ.to ship artwork. XYZ: ABC: Exchanging Initial Offers 77 . There was no indication that the gallery’s electricity had gone out over the weekend. The artworks filled four boxes. and the boxes showed no external damage. and arrived on time and apparently in good condition. They arrived right before the holiday weekend began. The other times this happened. but only if you let us ship it UPS. ABC’s position was that the artwork was fine when it left their location. 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. XYZ’s manager failed to open the boxes or remove the artworks. 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. it was obvious that the art in one of the boxes had suffered considerable water damage. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. and we will continue to discuss who is liable for the three water-damaged works. ABC: Before we begin. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. We’ll expect you to pay for the 12 works that will be in your show. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. or else the box was damaged in XYZ’s warehouse. However. and began preparing to return all of the artwork to ABC. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. XYZ contacted ABC immediately. when the boxes were opened on Monday. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. Unfortunately.
XYZ: Okay. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ.XYZ: Agreed. Now. I can’t see how I can refuse that. that’s okay with me if it’s okay with XYZ. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. ABC: Well. 78 50 Practical Negotiation Tactics . WeCanShipArt: Wait a minute. generated a like offer from WeCanShipArt and a reasonable response from XYZ. regardless of where the original three artworks were damaged. The artwork was not damaged while in our control. Having reached an amiable solution to the immediate problem. And we’ll eat the cost of shipping. we’re ruined. They also agreed that if the investigations are not conclusive. 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.m. they will split the cost of the three damaged pieces three ways. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. and if word gets out that you think it was. at its financial risk. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. You can’t just ignore us.
Ann: That sounds great! I don’t want this to affect our friendship. The “first and best” tactic enabled them to settle the matter easily.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. we paid $5. 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. and even more hours in the fall picking up leaves. Why don’t you give me a price? Colleen: Oh. Example 1 Colleen: Ann. What do you want for it? Colleen: Well.000 for it six years ago. no hard feelings either way. 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. Jeff spends many hours mowing the yard every week. 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. consider using the “First and Best” tactic. I don’t want to quibble. we plan on selling our Ford tractor when we move. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. I know you and Jeff said you’d like one because you have about five acres. Exchanging Initial Offers 79 . we’ll sell it to you. Ann: Well. We plan to put an ad in the paper next week. Okay? No quibbling. Ann: Thanks! We really need one. but if you’re interested. period. and it came with the bush hog and the leaf pick-up. I don’t have any idea. You must mean what you say and be prepared to walk away from an unacceptable offer.
We want you. Archie: Thanks. and I’ll take 48 hours to consider it. but I don’t want to start off in a new job by negotiating with my boss! So. who admired the way Archie negotiated his starting salary. I came up with the best salary offer I can make. how about you making your first salary offer your best one. So. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. and you know my current salary. I expect a fair increase. I’ll discuss it with my wife and get back to you in 48 hours. (three days later) Vernon: Archie. as we agreed. Okay? Vernon: That sounds good. I want the job. on this slip of paper. I’ll get back to you in three days. I don’t like negotiating over salary either. no questions asked. 80 50 Practical Negotiation Tactics . but we have internal budget considerations and we must consider equity with other employees. Here it is.Example 2 Archie: Well. He also started the job with a positive working relationship with Vernon. except salary. Conclusion Archie accepted the job offer. I’ll either accept it or reject it. I think we have agreed to all aspects of the job offer.
Fourth.) During the posturing phase. Kevin had “negotiated” with his parents before. you only have one Senior Prom in your life. Exchanging Initial Offers 81 .Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. we’re all meeting at Donna’s so we can share a limousine. you will probably have to modify some of your positions if you are to reach agreement. 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. since Sally is going away to college next year.m. I’m the only junior in the crowd. and in a favorable light. a 4:00 a. Present your position and demands as if yours is the only logical position. you know that Sally is really looking forward to this. so the prom is a pretty big deal to both of us. First we’re going to dinner. Third. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. (Once negotiations get underway. Kevin: Mom and Dad. Posturing is indeed “acting.” As you know. He knew his parents would not agree to let him stay out all night. Example 1 Kevin. was dating a senior. and we’ve made a lot of plans with our friends that I need to talk to you about. This is called posturing—presenting your position strongly and completely. then the prom. so he knew that he would have to sell them very quickly. It might be your only opportunity to explain your position without interruption. and ignore or deny any weaknesses in it.m. Sally’s Senior Prom is coming up. but he figured “all night” was relative. 17 years old and a junior in high school. look for indications from your opponent as to what he or she believes is their best position.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. Second. curfew would be okay. First. He and his date had decided that as long as they could join their friends for breakfast after the prom. we’re not going to be dating exclusively after this summer. and then to breakfast at “Timothy’s.
we told you that we would not be changing our rules to accommodate that older group. 82 50 Practical Negotiation Tactics .m. we’ll have to get in our car and drive home very early in the morning. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. and we’re just not happy about that. You realize that this could be as late as 4:00 a. but because the owner’s daughter goes to Sally’s school. Donna’s parents are not as strict as they could be when a bunch of you are there. remember that when you started dating Sally and hanging out with an older crowd. you have been fairly good about making your curfew—most of the time. of course.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. so there will be plenty of chaperoning. That’s the deal then? Okay. I’ve never missed my curfew. I think I ought to be able to stay out all night. And. this prom is a one-night thing—a dance that is dressier than you’re used to. Things can happen on a night like that that adversely affect you for the rest of your life. we know. I don’t drink or do drugs. the limousine will take us back to Donna’s house to spend the night. and the crowd we hang with doesn’t either.or drug-free. Sally’s parents trust us and have already said yes to her. happy about your plans to use a limousine so you kids aren’t driving. We are. Donna’s parents will be there. which could be dangerous. Yes. but to use that as a reason to stay overnight doesn’t make sense. However. you and Sally need to call it a night (or really a morning). You make some good points. So. Second. for sure. We think that after the breakfast. That’s asking us to believe a lot. We’re just not convinced that your entire group has been alcohol. And if we don’t spend the night. We’ve heard that they allow kids to drink. I believe you can pay a little more and have the limousine bring you both home. but it should not be oversold. From where we sit. Fifth. I know you trust me and that I’ve earned the trust. Finally. they will be open for the Prom crowd only. Also. yes.
The assembly plant is out-of-date. our Exchanging Initial Offers 83 . Tencro is not going to leave the state. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. we’d be adding at least 500 new jobs. If we can expand here. other companies have received incentives and Tencro certainly wants all it can get. and it does not really need any help. Nevertheless. With 800 employees. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. Also. It currently employs 800 people. one-floor operation would be very profitable. but we’re getting a lot of interest from other states willing to help us relocate. Tencro approached the state’s Economic Development Officer. we are one of the largest employers in this county. The spin-off business from our operations is huge. regardless of the incentives.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. we’re of course interested in keeping you here. Tencro has approached the state’s Office for Business Incentives to see what. but there are limited options available. Tencro: Let me just remind you of what our company means to this state. The company approached other states to see what incentives they might offer Tencro to locate in their state. and a new. and had this conversation: Tencro: We really want to keep our company here and expand it. but was disappointed to learn that they offer very few incentives. Example 2 Tencro Company decided to modernize and expand its business.m. EDO: Well. but it could easily add another 500 if it had the space on its assembly line. because his parents could not disagree with such wellthought-out ideas. if anything. We need to find out what you’re willing to do to keep us here. the state can do to help the company expand and rebuild.
Also. so we’d have to have it free here. and we’ve had to divert funds from business incentive programs over to basic services. and we are willing to offer some training dollars for the new workers. We need certain incentives. There are more residents in the state demanding more public services: road improvements. And we’ve been offered land practically free in the neighboring state. etc. additional police. we will need the two-lane entrance expanded to four lanes. We can’t possibly give it away to other companies coming in behind them. EDO: The state has very limited resources to pay for economic development incentives. and traffic signals. or else it will not be cost-effective for us to stay 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. And. now that the economy has improved. We 84 50 Practical Negotiation Tactics .. while we value your company as a long-time corporate citizen. paying taxes. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant. if the new location is at the local industrial park. Certainly. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. 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. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. schools. We do want you to expand your plant. That might involve the state building housing for them at a reduced cost and providing them with some retraining. EDO: Well. etc.employees pump money into the economy by buying houses and cars. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. 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.
Exchanging Initial Offers 85 . borrowed money for the new building. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. Tencro bought land in the industrial park. Tencro was able to pay off the borrowed money in half the time. we’re just not in a position to offer more than that at this time. EDO: Get back to us as soon as you can. 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. Future negotiations continued. but for the fact that each party did its homework and was aware of the true facts. However. The new set-up was so profitable. and hired 500 new employees. the training and the new road improvements were all the incentives offered to Tencro. Other than that.agree that the road into the industrial park must be widened and a traffic light installed at our expense. Tencro: Well.
and you cannot withdraw it in good faith. That’s a fair price. Avoid giving away too much at the outset.000 this year.” (You have won a settlement. They found one they both like that lists for $325. which can be very useful).000—what they paid for it. The other party will probably come back with an equally ridiculous offer.000. before someone else does. Their realtor told them that it sold for $290.000. Jay: No. never give them their asking price.. 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.000 three years ago). or 3) Make an unrealistic offer (i. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. particularly if you don’t know the other party’s “settlement range. Jay: No. 86 50 Practical Negotiation Tactics . at minimum cost. think things through before you make or accept the first offer. because you have settled quickly.) To prevent this from happening. 2) Start out with an old number. offer $150. such as last year’s price.000 two years ago.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. Let’s low-ball them and offer $290. but you feel cursed because you gave away too much. The sellers must be willing to come down a few thousand … Sue: Well. Sue: Let’s offer $325.” The perfect first offer. 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. thus requiring greater concessions on both sides. and houses in this area sell fast.000 for a house that sold for $185.000 and $337. of course.e. 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. then $320. is the most (or least) the other side will accept.000.
Exchanging Initial Offers 87 . as requested by the human resource director. was very impressed with their presentation. Give us your lowest price. If. (the next day …) Jay: They made us a counteroffer of $307. as Sue had first suggested. The buyers were very motivated to sell.000 total. the sellers obviously would have accepted and Jay and Sue. but who knows what they are planning on offering. (Bob and Frank meet privately to discuss the situation. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. then let them make a counteroffer. Frank: Me too.) Bob: I’d do it for $3. Sue: Then you do it. Lyle Foxworthy.000 for each of us—$6.500—half the difference! Sue: Great. I can’t tell our realtor $290.000.000. They outlined how they would develop a new employee performance-appraisal system.Sue: Don’t be crazy. realizing they offered too much. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. and the offer was based on fact: the prior negotiated price. they had offered $325. Both parties felt that they made a good deal. That’s an insult! Jay: Well. since they had already bought another house. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company. the company president.
Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. Bob: That’s fair. but we know you must have an amount budgeted for this and we are willing to do it for that amount. 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.000) their minimum price of $6.000.) Lyle: Okay.000.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. but we can’t pay more than $18. and it would not apply. Lyle: Okay. They also ended up getting three times ($18. We’ll do the job. 88 50 Practical Negotiation Tactics . and you two come highly recommended. What’s the cost? Bob: We want the job. That is all that’s left in this year’s training budget. I’m out of time. We’ve waited long enough.
carefully evaluate an opponent’s offer. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. but possibly of different values to your opponent. is likely to pull away from the table. be enlarged (see Tactic #27: Expanding the Pie). and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). what appears to be an outer limit of the settlement range when the process starts can. seeing no common ground. and do not flatly reject it because it is not your offer.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. Expect that the “total pie” will be different from what it was at the outset. Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. in fact. T Making Counteroffers (The “Give and Take”) 89 . and attorneys use tried and true tactics in giving and receiving offers. Experienced negotiators seldom reveal their exact priorities and objectives. When the other party makes an offer. One or more parts might be acceptable or indicate movement from their previous positions. which would most likely weaken their position (see Tactic #26: Keeping Secrets). which is often the case. Also. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. Instead. In some negotiation situations. 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. because if you do not at least appear to be flexible. do not dismiss it because it is not all you want. labor negotiators. the other party. Skilled negotiators such as salespeople. It has often been said that the key to negotiations is to be flexible (see Tactic #25).
except when you’re negotiating. Jerry pointed out that he is expected to work until July 31st. 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. Option 1: No family vacation. their parents began discussing a family summer vacation. and quicker. 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.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. Let’s see what we can work out. it looks like we can’t really plan a vacation for all four of us. Proposing only one solution to a problem. so you can go without me. what say you. 15. Jerry had already started his summer job. I don’t want to give up on a family vacation that quickly. gives your opponent little maneuvering room and might even prolong or damage the negotiations. 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. 19. In mid-June. Dad. Here’s the discussion that followed: Mom: Well. finished his freshman year of high school at the beginning of June. Jerry will be here. Option 2: Mom and I go before Jerry leaves on August 1. The week he would be home would be the first week of school for Sydney. 90 50 Practical Negotiation Tactics . Dad: Wait a minute. He planned on being home for one last week before having to pack up and go back to college. Proposing multiple ways to reach your goal can get you to the same place. Example 1 Jerry. His brother Sydney. completed his first year of college and came home for the summer around the middle of May. Sydney. We have four options. while it may be your best option.
Andrea considers Making Counteroffers (The “Give and Take”) 91 . By proposing numerous options. you have a half-day orientation on Wednesday. If we started the vacation on a Thursday. when we come home. me. Jerry: Okay with me. Sydney: Okay. Bob. It’s not perfect. and one secretary in his litigation unit. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. if it’s okay with Jerry. Conclusion The goal was to have a family vacation. and Carl). And I miss orientation and start school the next day? Dad: That’s an option. Then Jerry joins us until Thursday. Jerry: My friends and I have plans through Saturday of that week. actually. Sydney: Don’t I start school that week? I don’t want to miss school. Joe has no say in who was hired by the corporate legal office to work in his unit. but he can discharge employees for poor performance. Mom: Well. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. and Sydney go to South Carolina before his school starts. Classes don’t start until Friday. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals.Option 3: Mom. we meet up with him that week for vacation. so I won’t be able to meet up with you until Sunday. one paralegal. but it should work out all right. Mom? Mom: Let’s do it. we could return home on Thursday and still get a week’s vacation. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school.
Joe: That’s all well and good. however. Andrea: Wait Joe. so Joe took a “hands off” approach. let me say that I’m handling the missed deadline on the pleading. you have a job-performance problem. Andrea: Well. It is to the corporation’s benefit to address that problem here and now. Andrea. You had no authority to agree to settle the Stites case without clearing it with me. We have a formal procedure that you just don’t like to follow. Joe: Andrea. Before you start. In the last month. 92 50 Practical Negotiation Tactics . and I don’t see why we don’t have more independence. or you can work out a “supervision” agreement with me so that I can better monitor your performance. Her job performance was acceptable. Andrea: You didn’t list moving to another unit as an option. 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. isn’t it? But I don’t think just moving you really solves the problem. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. If you don’t like the way I do my job. It was just a comment. I really see your options as follows: You can leave the corporation. which forced Joe to take action. we have a very big problem. 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. To put it as bluntly as I can. but it doesn’t solve the problem—nor is it the only problem. you know that wasn’t an okay to settle. Joe: That is certainly an option.herself to be a professional. and resents any attempt by Joe to supervise her work. rather than to put it off on someone else or for some time in the future. The attorney for the other side has agreed to give me the additional time to file it. Joe: Come on. Andrea: We’re hired for our expertise. she made a two glaring errors in judgment.
my goal is the same is yours: to create an environment where you can perform to your full potential. in fact. If that option is okay with you.Joe: That could be an option. (Adapted from The Mind and The Heart of the Negotiator. Andrea: Well. But in fairness to our mutual employer. It also changed her attitude about being both a professional and a team player in a corporate office.) Making Counteroffers (The “Give and Take”) 93 . Andrea’s move and subsequent “approval” regime did. but it would still require some change in the way you work: either a demotion. rather than my staying here. Joe: That’s fine with me. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. Believe it or not. improve her work performance. the needs of the corporation have to come first. If you are convinced that I have to undertake an “approval” program. by Leigh Thompson. then it would save face for me if it comes with a move to another unit. lets talk to Bill about the move. I hope we can work it out. and propose an acceptable alternative. or I would advise your next supervisor to put you on a very formal approval program. I want to stay with the firm.
Wow! We are off to a good start. let’s see if there are any items we both want. then those which can be easily traded. we both want the sod. the fencing. These items often involve money). 2) exchange items (those that can be easily traded off—one item for another item of equal value. that’s $9.) Yes. They both agreed that this is the maximum they will spend on “extras” before moving in. Brooks: Right. Exchange. Let’s see. etc. three strategies are used. (She looks over the list. For example. Maureen: First. With distributive items.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. one person’s gain is another’s loss—zero-sum. 3) distributive items (those items for which the two parties have exactly opposite interests. then the contractor has lost $500 in revenue.500. It is used only when each side has several demands. Let’s agree to those things. 94 50 Practical Negotiation Tactics . or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides.). They have a fixed amount of money—$14. thus making it necessary to find a middle ground on each. and a home theatre. In essence. and finally.000. if a buyer negotiates a $500 reduction of a contractor’s bill. because it can speed up negotiations and produce a more desirable outcome. only those with polar-opposite interests that must be divided. 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. This approach is an important tactic. 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). Example 1 Brooks and Maureen Wilson have just finished building a new home.
500 $2.000 $5.500 $5. We have $1. and we both get things we want.000 $500 $1.500 left. I’ll trade your sidewalk and trees for my whirlpool bath. These are all permanent immediate needs. that makes sense. which I’d like to keep in the bank. $750 for lighting and $750 in the bank.000 $2. Can we split it evenly? Brooks: Okay.000! Brooks: Good.500 $500 $1.000 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.200 $200–$2.# 1 Sod Item Cost $1.000 $1. Maureen: No.000 $3. Making Counteroffers (The “Give and Take”) 95 . I’d like to spend some of it on lighting upgrades. which takes another $3.
both sides exchanged lists of initial demands at their first meeting. Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). finally agreeing to split the difference on the remaining amount (distributive items). This year. management and union negotiators found that a “winwin” approach to negotiations worked well. Profit-Sharing 5.Conclusion By taking the time to list all the items each person wanted and their cost estimates. even in difficult years. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. 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. Length of Contract 2. All items to be negotiated and their desired outcome for each item were put in writing for review. During that time. Wage Increase 4. Drug-Testing Program 96 50 Practical Negotiation Tactics . Pension Increase 3. The combined lists total thirteen different items: Desired Outcome No.
No Strike/No Lockout 10. Overtime Assignment 8. Because they held opposite positions on these issues. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). one Making Counteroffers (The “Give and Take”) 97 . Subcontracting 12. Next. and removed from the table. First. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8).Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Paid Funeral Leave 9. At this point.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. signed. Shift Differential 11. Next. eleven of the thirteen original issues to be negotiated had been agreed to. (#5) a new drug testing program. They proceeded to draft the language to settle these issues.Distributive rent program co-pay Exchange Exchange 7. Job Security 13. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). and (#9) to continue the often-discussed no strike/no lockout provision. Finally. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Clothing Allowance Based on senior.6. Health Insurance Employees pay 20% Continue cur. they began to trade off the exchange issues of similar value and nature. the negotiators agreed that they had compatible positions on three items: (#1) length of contract.
A middle ground often must be found on each of these distributive issues if you are to reach an agreement. 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. but a middle ground was eventually found on each and negotiations ended. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. the most difficult issues (often involving price or some other economic measure) can be negotiated because you know that most items have been settled successfully and only a few remain. Second. when you exchange items so that each party achieves their desired outcome on one of the two. Conclusion This tactic is simple. if both parties start from reasonable positions. but it can be very effective when a negotiation situation involves several issues. Third. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. you can use the process to settle many of the other issues on the table. 98 50 Practical Negotiation Tactics . Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. They then identify each as compatible. The tactic offers several advantages: First. exchange. negotiations begin on a positive “win-win” note.side’s gain is the other’s loss.
Jasper: Finish or not. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. each side is expected to put an offer on the table. It is especially important that you do two things: take your time before rejecting any offer from the other side. and looks like you are belittling them. This isn’t high school. last item: I’d like it quiet in the room at night. and studies late into the night. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Since they didn’t know each other well. you know. Waiting a respectful amount of time to counter. and refrigerator. Rob stays busy all day and evening with other activities. and can help you reach your goal. Mutual respect must be part of the negotiation process. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. I’m not interested in a curfew. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. will make your opponent feel good about the process. They agreed on which part of the room each would have. they decided to establish “room rules” so that they would both be comfortable with the room assignment. So when’s a good time? Jasper: (without hesitation) No way. Here is how the last issue was handled: Okay. so he wants a quiet room late at night. even if you aren’t going to accept their offer. and from a strategic standpoint. Rob: Wait a minute. The final issue had to do with “lights out” and quiet times for studying. Rob: Making Counteroffers (The “Give and Take”) 99 . 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. do not offer a counterproposal right away. the location of the TV. stereo.Tactic 24: Wait to Counter As the negotiations begin. Let me finish. so I can study.
m. is all I’ll consider.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. curfew on TV and other noise every night. Rob: (there is no hesitation in this voice) No.m. midnight during the week is the only thing I’ll consider. and that’s it. Under ABC ‘s contract with the union. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. the positions of non-union crew leader and floor manager would both be eliminated. and the union foreman would report directly to the plant manager. but changed his mind when he saw Jasper’s attitude.) Listen. The union contract required that management renegotiate this change in the grievance procedure with the union. I want a 10:30 p. Jasper: Midnight. and d) a hearing with company owner if the matter is not resolved in 20 days. The appeals procedure would have to be altered to reflect the restructuring. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. Under the restructuring. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. No agreement was reached. b) written complaint to a floor manager if the matter is not resolved in 5 days. and that’s not negotiable. Jasper: (without taking a breath) At best. 10:30 p. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics .
but to dictate. We’ve got a couple of alternative models for you to consider. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. Union: As you know. The union was prepared to accept the plant manager’s position as final. the employee and the foreman would meet with the plant manager and attempt to resolve it. our grievances often signal to management that there are real problems on the shop floor. and began the negotiation session concerning the grievance procedure. If the union foreman felt that the grievance had merit. Union: You obviously didn’t come here to negotiate. he/she can take the grievance to the plant owner for a hearing. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. Company: (rather abruptly) Let’s not drag this out. Company: Here’s the new draft of the grievance procedure. and everything else stays the same. 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. The redraft is simple and straightforward. rather than go on to appeal it to the company owner.any objection to the change. Company: (no hesitating) Trust me. rather than as a judge on the merits of the grievance. We’ve simply eliminated the first two steps.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . In fact. We just cut out two steps. An aggrieved employee can make a request for a meeting with the plant manager. (Note: An attitude change sets in. because those management layers are gone. no one can complain about that. Certainly. We’d like you to consider the plant manager’s role as a problem-solver. If in 20 days he/she has not been satisfied. Union: Hold on. this redraft is a very simple change to the contract. and I’m certain your members will be okay with it. After initial pleasantries were exchanged. ABC Company’s negotiator explained the management changes soon to be implemented.
to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. the company entertained the ideas the union had tried to propose before. After a cooling off period. Union: We’re very serious. 102 50 Practical Negotiation Tactics .two-step grievance procedure instead of a four-step procedure. We’ll see you on the picket line. This time. the two parties did meet again. rather than in the 35 days the current system provides. and we’ll strike if we have to. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. You can’t be serious. and actually accepted a three-step procedure.
Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. Mom says you. and ten nieces and nephews) always ate around 5:00 p. But after the negotiation gets started. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. and now have a new baby girl. If you are flexible. They flipped a coin to see who “got” them and the new baby this year. their spouses. Sue’s family (parents. The couple used to have Thanksgiving dinner at both families’ homes. two sisters. 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). They’ve done the research.m. Example 1 Sue and Bill have been married four years. two brothers. Bill’s family (parents. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. four brothers. we’ll get to our side. Nancy: Sue. Bill’s family won.m. and at least five aunts and uncles) ate around 7:00 p.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Making Counteroffers (The “Give and Take”) 103 . and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. and we’re really not able to enjoy either one. you can adjust your demands or goals to include such new ideas. established goals. Even before the baby’s arrival. Bill. Sue’s sister Nancy called her to talk her into coming anyway. and do not dismiss something said by your opponent just because it came from the opponent. it’s just too much to do both. one sister. Sue: Yes. Be open minded. Next year. Arriving late at Bill’s family gathering caused him to miss the “traditional” pre-dinner pro-football game on TV (which he had grown up believing was the real reason for thanks at Thanksgiving). and identified the range of options they feel comfortable with negotiating.
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. Thanksgiving is Thursday. Sue: Next year. I know that I would rather not do two Thanksgiving dinners on Thursday. So that doesn’t work. 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. she suggested a unique alternative. Sue: I don’t know. either. Nancy: If we keep the time at 5:00 p. some people have to work on the Friday after Thanksgiving. 104 50 Practical Negotiation Tactics . I mean.Nancy: It just won’t be right without you guys. Nancy: I’ll let you know. Celebrating the next day seems odd. it’s okay with me if you can sell it to everyone else. Isn’t that what Thanksgiving is about—taking a day to give thanks for our blessings with the people we love? We’ll just arrange it so we do it two days in a row! Sue: Well. I bet everyone could make it on Friday. but she won’t tell you. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway.. we’ll come to Mom’s. There’s nothing “special” about Friday. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. the holiday will be over. When that goal looked out of reach. Mom’s very upset. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. and it became the family’s new tradition.m. Nancy: We’d make it special by all of us being together. I thought of asking Mom if she could move dinner up to noon or so. By being flexible.
the foundation’s regular annual grants come to roughly half of their available funds. but we can’t fund all of the $12 or $15 million. We need the city’s help by allowing us to get the city land donated to us (for free). the interest income of around $6. Kids’ Home: As you know. a non-profit organization for orphaned children.5 million is available for distribution to numerous charities. City officals: We can probably give you the land for free.Example 2 Kids’ Home. but we need some assurance that you will be able to build and operate the orphan home at that location. We only have maybe $2 million a year to put toward this charity. City: Can’t you borrow the money from a bank to build the facility. Kids’ Home hoped to get $500. Foundation officals: Oh. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. 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 . Estimates for building a new orphan home ranged from $12–$15 million. Unfortunately (for Kids’ Home). The foundation has a substantial endowment fund. Each year. depending on the cost of the land. 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 and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. we hope to break ground early next year for the new orphan home. but the principal of the fund can’t be touched. we’re committed in theory. They are meeting with the city to ask that the land be donated by the city for the project. 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. Kids’ Home: That’s why we brought the foundation’s officials with us.
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. 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. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. 106 50 Practical Negotiation Tactics . And “donations” aren’t a very safe collateral for any bank that wants to loan us money. it could end up costing double that amount. We wouldn’t want to make such a commitment to a bank. We’re not familiar with that program. I’ll contact the state tomorrow.Kids’ Home: Borrowing the money gets very expensive. but we’re willing to look at it. If we borrowed $15 million at 10% interest. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. We’ve never committed our funds to pay back a bank loan. We probably would not be able to participate. and really taxes our ability to raise funds. We’re a nonprofit group.
The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. it is not acceptable to lie.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. The Jones family suspected that the Smiths called the police. and asked the officers to cite the Jones kids for parking too close to a corner. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. Example 1 Soon after the Jones family moved in next door to the Smiths. Mr. At the same time. and often lasted until 2:00 or 3:00 a. each side has to know generally what each other wants to accomplish. It is perfectly acceptable to say that you are not ready to reveal certain things. These parties could get rather loud. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. and we would very much like to talk about how we can resolve these issues. and trust can only be established if all parties interact truthfully. Mr. Making Counteroffers (The “Give and Take”) 107 . However. Successful negotiations depend on trust. yet not reveal all of your goals and objectives. you might not want to reveal all of your priorities at first. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights.m. The Smiths called the police to complain about a late-night party. the neighbors began to have problems. Jones: We’ve obviously gotten off on the wrong foot. Before the Jones family moved into the neighborhood. They asked to meet with the Smiths to talk about these disagreements. and often took up all the space along the street in front of the two houses. the Smiths could count on parking their car directly in front of their house. But the Jones clan had four cars altogether. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. In order for a negotiation to be successful. Smith: We don’t know what you’re talking about.
that wasn’t us. but we do know that someone has complained. the Jones were visited by a city inspector because of a complaint from the Smiths about the tree branches hanging over the fence and brushing against the garage roof. I guess. then they’ll need to come in at midnight so that their talking doesn’t disturb you. they’re hitting baseballs into our yard. And we’ll make sure none of our cars are parked in front of your house. In good weather. if they are outside. So. we’d like to be able to park our car in front of our house.Mr. Mr.) 108 50 Practical Negotiation Tactics . since you’ve asked. Mr. and was met with the following: Mr. we have a problem walking long distances in bad weather. Jones: I wish you had mentioned that the last time we talked. It is really very disturbing. Also. the late-night parties are a problem. Mr. At our age. we’re good now? Mr. (A week later. Muffin. Smith: Yes. the next time the boys were out playing and the ball came into the Smiths’ yard. Smith: Well. And the music is to be off at midnight. and not in the back yard. Smith: You know that your boys are causing our dog. Jones: Well. Jones came to see what the problem was. we thought you might have called the police about our kids’ party and our cars. Is that everything now? Mr. In spite of the Smiths’ assurances. Mr. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Smith: Well. Smith: No. fine. we would like to work out some solution. they kept it. yes. and they won’t be having friends over more than one night a weekend from now on. Jones: We’ve already talked to the girls about the parties. Mr. I’ll talk to the boys and we’ll make sure they play baseball in the park. Almost every day. a lot of problems. Jones: Okay.
Why didn’t you tell us? We can’t read what’s on your mind! Mr. Its local headquarters has a union to handle its international shipping. the tree was clearly over the fence. because they didn’t like a grievance decision. The union knows that the company is up for sale. You could have seen that yourself. Mr. Jones: (at the Smiths’ door. the British firm will walk away from the deal.S.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property.Mr. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Example 2 Neno Enterprises is a shipping company with extensive global operations. irate) I can’t believe you people called an inspector on us. Making Counteroffers (The “Give and Take”) 109 .S. 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. But we didn’t call the inspector. Neno’s president and the Union representative met to discuss the walkout. 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. but Neno cannot tell the union this. We would have fixed the tree if you had asked. You obviously don’t want to be “good neighbors. Japanese companies often do not “recognize” labor unions the same way U. Smith: Well. Jones: Sure. Neno has been negotiating the sale of its business to a British company. and the deal is close to being final. Union officials are afraid that a Japanese company might purchase it. or the deal is off. have labor unions. although none of the facilities outside the U. you’ve said that before. The union laborers walked off the job on Friday. or European companies do.
Union: What aren’t you telling me? A labor shutdown. we will resolve it to your satisfaction by the end of the day. We can’t put up with the kind of decision we got on our grievance. and if the guys are back on Monday. Have the guys back on Monday. then there’s probably no harm done. do you? Union: No. it will impact our marketability. Neno: Look. 110 50 Practical Negotiation Tactics . But I have to have everyone back on Monday. I’m certain that if we can sit down and talk next week. I know it’s not news to you that this business is up for sale. And 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. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. If they do come back. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. Union: We think that the grievance decision affects our wages. is still a labor shutdown. I need your guys to come back to work on Monday. It’s not the time to have one. We’ll meet with all of the parties on the grievance first thing Monday. we don’t. no harm-no foul. You don’t want to mess up our negotiations. any interruption in our shipping could affect how these buyers look at our business. If everyone is back on Monday. so the union won’t be hurt by the buyout.Neno: You know this is a wildcat strike and that it is in violation of our contract. But if your guys are out past Sunday. If that’s going to have a bad effect on your being able to sell the business. this is a legal strike under the contract. You really don’t want to do that. We’ve not had a labor shutdown in 20 years. Neno: Look. I think it already has. Our guys are prepared to stay out a lot longer than Monday. Neno: All I’m saying is that there is a difference. I can’t really be more explicit than that at this time. maybe by next Friday or the week after that we’ll have our guys back to work. I promise you. whether it’s for one weekend or a week. Therefore. I’ll forget all about the strike.
the union was willing to trust Neno—even though he couldn’t tell them everything. I can. while the grievance was being resolved. If I could. as well. and it’s that important to you as well. Conclusion On Monday. He told him that it would mean that the union would not only keep its jobs here. Union: Okay. Neno called the union negotiator in and briefed him on the sale. Making Counteroffers (The “Give and Take”) 111 . I’m going to go along with you because you’ve always dealt straight with me. rather than make up reasons.Union: It’s that important to you? Neno: Yes. Union: Okay. but the British firm will allow them to organize at their foreign locations. But I can’t. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. Can you assure me of that? Neno: Yes. Because the parties had dealt honestly with each other in the past. was the right decision to make. I would be more specific. the sale was finalized. But I need to tell my guys that this is important to them as well. we’ll be back to work on Monday.
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
I’m not going back to him again to discuss this program. B. she chose the one she most preferred. keeping her Saturday free. I’ll do it now.000 in the budget. (long pause) Felipe: Let me give you three options: A. Roberto: Well. I’ll find a way to do without one part-time person.Amber: row before your basketball game. I can accept B. Example 2 Roberto: I can’t properly advertise this new program with a $5. but I will cut your travel budget out completely. I have three hours. Roberto: But I need to start the direct mail and newspaper ads within two weeks. But when her mother laid out the schedule and gave her alternatives. that is enough time. or C. Clean it after your game. I’ll approve $15. I’ll approve $15.000.000 for advertising. Amber resisted the chore she hated. Take it or leave it. Conclusion At first.000).000 for advertising. Felipe: Well. or we lose a whole year. Roberto: But it will never generate enough interest if no one knows about it. Felipe: Sorry. but the company president does not share your optimism on this program. Felipe: (Roberto’s supervisor) Sorry.000 budget! I need at least $20. but I will cut your staff by one part-time person (or $15. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . and clean it. I can’t help. but no TV or anything until it’s done! (pause) Okay. Use the $5. Three.
” He offered Roberto three alternatives of equal cost.Conclusion Felipe was willing to think “outside the box. thus achieving his goal of not having to ask for a larger budget. which was his goal. would enable him to adequately promote the program. Making Counteroffers (The “Give and Take”) 117 . One alternative. Roberto believed.
I think you would agree with me that I have performed well above expectations this past year. Susan: I hope so. 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. This should have resulted in an automatic promotion and a sizable pay increase. After a few minutes of silence. Jones: I certainly do. If his opponent cannot agree to the demand but does not want to end the negotiations. received a glowing report from her boss on her job performance. The negotiator for the other side says nothing. 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.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. nearing her third year with the company. and 118 50 Practical Negotiation Tactics . But she also knew he would have to be willing to go to bat for her with his superiors if she was to get her advancement. She was determined to hold her ground for at least a 13% pay increase and a promotion. Unfortunately. I have to tell you that while I appreciate what you have done for me. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. I very much appreciated the fair job performance review you gave me. the negotiator who feels the most uncomfortable with the silence will fill the gap and most likely make a concession in order to get the other party to speak. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. Here’s how the negotiations went. the promotion had not yet been approved. inviting a response. Susan: Mr. It was 16% less than she had been led to believe she would be getting. but one side comes back with a non-negotiable demand. Jones. he can make an open-ended statement. Example 1 Susan. you are a valued employee.
(says nothing) Or. the company’s refusal to grant them now was a harder position to support. of course I will be glad to do that. and sell it to management that way. If there is some flexibility in your request. I could probably find a way to phase it in over a two. maybe we can talk about the promotion later in the year. Jones to continue to offer solutions. I would very much appreciate it if you could ask the company to reconsider. it could help. and I think that I really haven’t been dealt with fairly. because I feel my future with the company might be at stake here. and I’m sure management will agree. Well. I really want you to stay with the company. if management can see their way to giving you the pay increase now. Promotions of this type are all but automatic around here. Susan’s silence prompted Mr. (says nothing) If I can’t get that pay increase approved right now. Okay? (says nothing) Let me check it out and I’ll get back to you. Conclusion Mr. I must ask you to try to get both.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration.or three-year period. but a pay increase of that size might be more difficult. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. I suppose I could get the promotion approved with the proper presentation. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. Once he acknowledged that both items might be awarded sometime in the future. Making Counteroffers (The “Give and Take”) 119 .
Mayor) said that she was considering running for office. by saying that she might run for Chair. but now they’ve got to ask what Madame Mayor’s motivations are.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. My bosses might not have been inclined to expand the agreement anyway. has colored these negotiations. Town Council Chair). 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. 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. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. Mr. The mayor. I don’t think it’s a problem. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. He decided to push for a simple renewal of the original terms. She has not decided what she’s running for. The term of the original agreement was nearing its end. her plans really don’t have any bearing on these negotiations. Town Council Representative: I think you’re wrong. and were trying to settle on new and expanded areas when one of the elected officials (Ms. The end of the agreement coincided with the election cycle for the two towns. and until she does. Also. The parties agreed to continue the previous terms of the agreement.
Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well.represents have to worry that her desire to switch governments might taint the negotiations. I hate not to attempt to add some additional areas to the agreement. the Town Council representative’s position prevailed. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. and the agreement was renewed with no new provisions. Making Counteroffers (The “Give and Take”) 121 . Conclusion By remaining silent. Mayor’s representative: Well. He either had to end the session or figure out what to say to reengage the other side. I don’t know what her reaction will be. I’ll go back and tell Madame Mayor your position. In the end. 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. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. the Town Council’s representative left the mayor’s representative with no room to maneuver.
This range for maneuvering is not the same thing as the list of items you make at the outset—it’s the last space separating you and your opponent. The property came with three acres of forest alongside a meandering brook. you should always enter the talks with a good idea of what you are willing to agree to. The reason I built it was so that I could protect my patio. 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. “I have to have this. which an upstream neighbor had built. the brook was the property line separating her property from a neighboring farm. Example 1 Madeline bought an old farmhouse outside of a small town. the brook and rock barrier are on my property. she noticed that the brook came within 100 yards of it. Neighbor: Well. after the gazebo had been there for about five months. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. when one of you might say. As was sometimes the case in these parts. You will have to remove the rock barrier. or we will be at an impasse. Madeline built a gazebo about 500 yards from the brook. Madeline: Hi. Obviously. Joe. 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. One day.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. It calls for compromise. She traced the brook back along its course to see why and where it had changed its path. Your rock barrier has sent the brook onto my property and it is too close to my gazebo.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. The brook 122 50 Practical Negotiation Tactics . She discovered that a rock barrier. in a small clearing. I have a problem. Madeline. had redirected the brook further into her property.
I can’t have the brook in my house. I couldn’t have that. When she found out that this was not going to solve her neighbor’s problem. 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. restore her property line. Neighbor: I’m sorry. This will put these houses right next to me. I won’t remove the rock barrier. My neighbor on the adjacent farm wants to sell part of his property for a housing development. she widened her range of options. What if you removed the barrier for a short time. Madeline: But by diverting the brook. It might not be necessary to make such a dramatic change. Making Counteroffers (The “Give and Take”) 123 . and return everything as it was. She left room for a compromise. I’ve lost 400 yards of property on my three acres. what I need is to protect my property line and my gazebo.extended right up to my back door when the rain was heavy. at least I’ve maintained my property line. you have not only threatened my gazebo. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. and allowed me to have a survey done so that my deed can be corrected to describe the “existing brook” boundary line by other landmarks. Madeline: Well. and allow the neighbor to protect his home. Madeline: Yes. By expanding the range of options available to resolve the dispute. Then. Also. Madeline was able to protect her gazebo. I understand that. but you’ve changed the boundary line of my property. but I don’t know what I can do about it. which enabled her to achieve her goals. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. Neighbor: I can do both of these things. if the brook is redirected.
The pilots want dependent coverage paid for by the company. Over the next five years.000 to cover the premiums for dependent coverage. and are willing to keep pension benefits the same. Over the last five years. we know that health insurance premiums might skyrocket.000. then the pension benefits overall will increase by $10. However. As best as we can tell.000 figure. that would be the minimum increase.000.000 a year over the next five years? Company: Yes.000. you are taking a risk on the costs increasing. The company wants to trade paying for dependent coverage for better pension benefits.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. the company can make your pensions much better. But only a few of our people are close to retirement age. with all wage and operations issues resolved fairly early. And we cannot afford that $1. the airline paid a total of $200. With long-term planning and investments. This is just a cash-flow problem that your members have to understand. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000.000. as it has always been. The airline industry is in a slump. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. This would be a better benefit in the long run. 124 50 Practical Negotiation Tactics .Example 2 The contract negotiations between the pilots and the airline had been going pretty well. dependent coverage could cost us $1. If we invest the $200. and we know that with this new contract term of five years. The projections for the next five years were that these costs would increase to about $1. Pilots: Look.000. and the premiums for health care just keep going up. what they really need is for you to cover the costs of dependent coverage. Company: This could not come at a worst time for us.000 (which we reasonably should have expected to pay in premiums) in the pension account now.
000. If we can get two or even three years out of the $200. Company: If the company spends the $200. Company: Then it’s okay with us. however. Conclusion The company was committed to limiting its exposure to $200.000 to either pay one year of the premiums. The pilots expanded the range of options. the company will not be expected to give us this benefit. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. 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. with a cap of $200. by agreeing to let the company cap its exposure for dependent health coverage. The dependent coverage is more important to us now than the pension benefits. or invest in the pension plan? Company: Yes. if they were that high. we are.000 actually carried them through four years. that would be worth it. then those funds will not be available to invest in the pension plan. The health insurance market stabilized.000? Once the cap is met. Making Counteroffers (The “Give and Take”) 125 .000 the first year on the premiums. The $200.000 available. so the decision to be flexible was a good one.Pilots: But you do have the $200. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. can we agree to a year-to-year agreement on dependent coverage.
Buyer: Yes. 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.500! Saleswoman: Yes. I guess it would be around $600 per month. $45. if I can give you this car with a $300 monthly payment. do you want to look at something else? Buyer: No. and compare it to your strategic objective. If you are on the receiving end of such a tactic. Saleswoman: I’ll be right back. Saleswoman: With your 740 in trade.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. be sure to add up the total cost. I love this car. Buyer: Way too much! Saleswoman: Well.000 car.” “affordable weekly payments. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. what monthly payment did you have in mind? Buyer: More like $300 per month. it’s a deal? 126 50 Practical Negotiation Tactics . I recall the day you drove it out of here. I just can’t imagine the monthly payment on a $45.000 for a Volvo? I bought the one I’m driving for $19. but that was several years ago. Phrases such as “for only pennies a day.… (20 minutes later) Saleswoman: So.” and “low monthly rates” are examples of the salami tactic.
do you want HBO? How much? $5. Saleswoman: Simple. I can’t afford that much.000 price into “slices” the buyer thought reasonable.” She decided to cut the $45. You can do that.00 per month. and added the trade-in. can’t you? Buyer: Yes.000 down. Let’s see. but let me see the numbers. and payout slices to reach the total price she wanted.00 per month for your service. Instead of a three-year lease. with your car and $6. (looks at the numbers) That looks good. do you want Disney? Yes. Sure. but what else must I buy? Only the basic service for $8.Buyer: I don’t see how you can do that. down payment. Great! So.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. But my neighbor pays $39. Once the buyer volunteered that $300 was an affordable “slice. I can afford $6. I can’t discuss another client’s account. as promised.” she had him—she worked around the $300 slices.00 per month. Making Counteroffers (The “Give and Take”) 127 . Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. you can get the Disney channel for only $5. it will be a five-year lease.99 per month.
we had that before.00 per month. Thanks. 2? How much? $8.99 per month. but he agreed to six “salami slices” for a total of $38. But that’s all! Then we’ll hook you up on Monday. 128 50 Practical Negotiation Tactics . and SI 1. and my wife wants the old movies. Disney is for the kids! The sports channels are for me.00. Great. Okay. 2. instead of one total amount. they asked about the Cartoon Network. I really want the sports channels. The total is $38. Conclusion The owner thought his neighbor’s service at $39. Yeah. 3. What about the music package? Yes.00! Why? Because he judged the per-slice price to be reasonable. That’s $5.00 a month.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. That’s another $5. and probably felt much better about the total negotiated package because it was presented in modest individual slices. Any other kids’ channels? Yes.00 per month was far too much.
It should be used with caution: It can end negotiations immediately. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). and it can destroy your credibility. When both sides believe that each has equally strong positions. Humor might not look like pressure. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). it is effective.m. Applying Pressure 129 . Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Tactic #33 (The Bluff) is a classic pressure tactic. but it can be used effectively when one party clearly has an edge. and the use of humor. turned off by the tactic. however. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. which can be successful if the opposing team has two or more members who hold different views of an issue. so are you ready to make a deal? This might convince a few buyers. pressure tactics should probably be avoided. today. For example. “I can only guarantee this price until 6:00 p. but in tense. In some cases.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. but others will walk out the door. the traditional car salesperson might tell the buyer. angry negotiations. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. 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.
We’d hate to give it up.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. When Lacey found out that his employer was transferring him to another city farther down the coast. I don’t know. Chloe and I would like to take the sailboat with us. and we’ll be moving south in the next month or so. Your opponent will consider you untrustworthy and might even be insulted by your attitude. but Don. It 130 50 Practical Negotiation Tactics . Although I do think there ought to be some consideration for the two years you had use of the boat. Such exaggerations are easily revealed or uncovered. Lacey: I know. getting a divorce and each moving away (and would have no more use for the sailboat). And we don’t want to be unfair. Abby really loves that boat. Lacey: Don. boat prices have really gone up. The two couples used the sailboat a lot the first couple of years. Don and Abby now use it less and less. big news! I’ve been promoted. he and Chloe wanted to buy out Don’s and Abby’s interest. I think Chloe and I would be willing to pay more than just the money you guys put into it. Don: Wow. and they will weaken your credibility. Lacey. in fact. but it is not a good idea to exaggerate what you are offering or what you are giving up. In the last couple of years. Don: Absolutely. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. and we need to talk to you about how we can buy you guys out. Lacey and Chloe didn’t know that Don and Abby were. together and separately. I can’t tell you how many times Abby has said how happy she is that we have the sailboat.
Don and I are getting a divorce. I’ve been thinking. Don. We’ll be leaving here for the Midwest. It’s about time now for some major investment. Abby: Well. (After Lacey and Chloe had a chance to talk. It just reminds me of how happy Don and I used to be. Don: Lacey. 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. Applying Pressure 131 . and we’re moving farther south. and I’ll get back to you. Lacey and Don’s negotiations changed considerably. he likely would have found himself in a stronger negotiating position. I thought you understood how important this boat is to Abby. I’ll be glad never to see it again.) Lacey: Don. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. the boat has depreciated. Lacey: Cut it out.is just about the most important thing we own. and neither of us put much in for upkeep. Abby told Chloe about the divorce and about how she never wants to see the boat again. but separately. Let me talk to her. Abby is having this conversation with Chloe) Chloe: Abby. After all. big news!! Don got his promotion. I was afraid something was going on when you all-butstopped joining us on the boat. I’m surprised by your attitude. though it’s not so happy. (Around the same time. I’m sorry. Chloe: Oh. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. I have big news too. Abby: That boat. which you would have to share if you want to retain half-ownership.
I think you’ll have to agree with me that wage increases in this next contract will not be available. in this global market. the situation in the stock market is not good. Company president: Well. Union negotiator: The stock price might be down right now. I’ll have to show them 132 50 Practical Negotiation Tactics . the company president decided to use the stock price as a negotiating tool during the current union contract talks. I’ll be going back to them as soon as next week. I’ll be looking to you to make some major wage concessions on this upcoming contract. we will need to make drastic cuts in our operating costs just to survive. but this has been such a crazy situation. I read in the papers every day that the market is still strong. and that the economy is strong. 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. our production line changes at least three times a year. I can’t see how today’s numbers really impact the long-term profitability of this company. Here’s how these negotiations went: Company president: Well. And as you know. I’m telling you the stock price is having a huge impact on us already. they will make their decision based on a review of the stock price that day.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. in fact. The current stock price is the lowest it has ever been. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other. And while these fluctuations have little to do with the health of the company itself.
They told union officials that it would be very rare for a bank to make its decision solely on stock price. but your proposal to cut wages is just not going to fly. Conclusion Because the company’s president over-emphasized the impact of the market on the company. Applying Pressure 133 . okay. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. they would do a thorough analysis and look at the health of the company over the long haul. no concessions! In fact. Union negotiator: I know that’s what you told me. If the stock goes up next week. (In the interim. Let’s get back together next week. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. he lost the trust of the union. we’d like to reopen talks on next year’s pay increase.that we’ve cut expenses to counter the losses in the stock market.) Union negotiator: I’m sorry. and the union ended up with a substantial increase in their contract. but I checked it out and it’s not totally true. The union became hardened in its position that the employees needed wage increases in the new contract. When negotiations resumed. the company’s position was weakened even more. When the market took a swing up during the negotiations. the union checked into the Letter of Credit transaction with some experts in banking. Company president: All right. here’s what happened. let’s talk about it. and I’ll have our people look at it. Union negotiator: Well. We think this company is very healthy and can withstand the temporary downturn. So. Give me your proposal for wage concessions. If you put it that way.
There is a chance that the tactic will work and that both sides will agree to the proposal on the table. Both of them were still in graduate school and worked full-time. I called Charlene and she was available. they are bluffing. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. but Christy thought the relationship was heading in that direction. You’re not upset about that. I knew you had a class. Example 1 Christy and Tom had been dating for about a year. you will have lost credibility with your opponent. and they really have no intentions of doing so. but I really am. Sara said she saw you at the movies with Charlene yesterday. I really hate it that you chose to see the movie with Charlene. and she didn’t think Tom had. it might backfire. are you? Christy: I don’t want to be.Tactic 33: Bluff! Bluff with caution. I guess I’m just surprised. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. Charlene. She knew that if she made such a demand and threatened to leave him unless he made a commitment. If you subsequently agree to begin talks again. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. We don’t have that much free time together. yeah. either. Tom: Oh. so their “free” time was very limited. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. and I really wanted to see the new Lenny Bruce movie. Here’s how the discussion went: Christy: Tom. This can come back to haunt you. 134 50 Practical Negotiation Tactics . but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. The couple had not discussed marriage. Poker players know all-too-well-that bluffing can be very costly.
Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. 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. It is.Tom: She’s a friend who happens to be a girl. if you can’t make that kind of commitment. Tom: You’re serious? It’s that important to you? Christy: Yes. Tom: Okay. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. I certainly don’t want to lose you. I’m willing to risk losing you. If that’s not possible. Applying Pressure 135 . It’s made me realize that I want us to have an exclusive relationship. Conclusion Tom didn’t want to lose Christy. then I’m afraid I want us to stop seeing each other. Actually. It really wasn’t a “date”—we just saw the same movie together. He believed she was sincere. I won’t go out with any woman friend. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. he had to make a commitment or risk losing her. The union negotiators. I just thought of her because I knew you weren’t available. Tom: I have friends of long standing who are women. She convinced Tom that her feelings were strong. so he didn’t call her bluff. I need to have your commitment that you won’t do that. I’m not “dating” anyone else. and at first he thought she might bluffing. If Tom had “called” Christy’s bluff. but very little progress had been made. Since he wasn’t sure about that. she paid her own way. Christy: I just can’t see it that way.
believing that Nexon would not risk a strike. The union members ended up voting not to strike at this time. Second. we want the part-time workers to apply for and fill fulltime positions as they become available. or else we’ll be asking the membership to strike. Union: You’re wrong. We’re not going to reach agreement on this at all. Nexon: We’ve got lots of issues to discuss. Many of our union members who are working part-time hope to work full-time. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. This is a critical issue to us. then all of our other demands will change. much less today. Nexon: I’m sorry.) 136 50 Practical Negotiation Tactics . And I don’t believe you’re going to go call for a strike over this. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. we’re really prepared to go the distance on this benefits issue. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. We need an answer today. We need some agreement on this today. This is something we just have to have. Here is what happened at the next negotiations session: Nexon: I’m sorry. Union: You don’t seem to understand. it will cost too much. Why don’t we put this one aside for now. decided to threaten to walk out of the negotiations and have the membership vote on a strike unless Nexon made some concessions at the next meeting. Another bargaining session was scheduled. but working without benefits is simply not acceptable. If we’re not able to reach agreement on this. First. Nexon: I’m just not prepared to give you one. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
the guy was in no position to dicker over the price of the repair. Example 2 Let’s face it: Sometimes one party holds all the cards. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. and was forced to pay whatever they demanded. not blessed with many household repair skills. Since his toilet had overflowed and water was continuing to run all over the floor. his air-conditioning unit went out. because this is the busiest time for that industry. while the other is not—that is. The owners of professional sports Applying Pressure 141 . once had to call a plumber in for emergency repairs. such as the advantage of time. he was able to successfully bargain for other services. The same kind of thing happened a couple of years before that: In the middle of August. its union has the advantage in the weeks just before Christmas. for example. Try bargaining with a plumber! This homeowner. On the other hand.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.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. Unions can strike at any time to achieve their goals if they have some leverage. when one side has “leverage” over the other. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. If the employer is a shipping and express mail company. Since the heating and air conditioning company held no leverage over him. It is sometimes referred to as “pressure bargaining. He was at the mercy of the company that could install an appropriate unit the fastest. there were times when there was no pressure and no emergency. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position.
Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. either individually or through collective bargaining. What goes around comes around. but they are less willing to negotiate several months ahead. (Team owners are notoriously unpredictable. for example. it is the union’s turn to hold firm on its demand). but before you choose such a tactic. A note of caution: Circumstances in one round of negotiations might give one side an advantage. there are likely to be long-term repercussions. if the unemployment rate is high and jobs are few. can suffer repercussions in the form of sabotage. benefits. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. etc. then you are in a position where you can set reasonable demands on wages. will what goes around come around? 142 50 Practical Negotiation Tactics . On the other hand. unemployment is low and jobs are plentiful. he didn’t have to be flexible because the employees believed that they had no alternatives. Other employers find themselves in situations that actually reverse the leverage (when.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. low employee motivation. If you have a special skill that an employer needs and few others have that skill.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. When the employer proposed adding duties to the job classifications. the employer has the advantage: a supply of jobs. The employees had no power to resist the demands of the employer. despite strong resistance. and other undesired outcomes. If so. This gives it the upper hand in negotiating with employees. however. she has leverage and can more likely hold firm on her price. When one side places undue pressure on the other side. consider whether or not the two parties will likely meet again in the future to negotiate.
About an hour into the drive. you have it when we drive home. but use this tactic judiciously. and here’s how the “negotiations” went: Dad: You two stop fighting. This time. the argument is over the doll’s shoes. Andrea: The doll is mine.) Dad: Stop it right now. Andrea: Okay. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. and Susie. Mom said so. and Susie hid them under the seat. because you will probably only get to use it once. Why? A sudden surprise can disrupt the dynamics of a negotiation. Just because you saw it first doesn’t make it yours. You’re driving me nuts. the little girls began to fight over the doll. The doll can be shared. Example 1 A father and his two daughters were on their way to visit the grandparents. and I can’t stand it. Andrea had taken them off the doll. you have it this part of the trip. (In a few minutes. Consider making a suggestion or a proposal that completely surprises your opponent. I can’t drive if you keep this up. I took it out of the box. Just share the doll. the girls had been fussy. Tell Susie to let me have it. the fighting starts up again.Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway.) Applying Pressure 143 . Susie: Okay. Their dad tried to reason with them. (Their dad pulls to the side of the road and turns to face them in the back seat. Andrea. Susie: The doll belongs to both of us. Almost from the beginning of the three-hour drive. We’ve got a long ride ahead of us.
She can have them later. The tactic was so successful. to no avail. charging that they breached their duty in their handling these funds. I want the shoes. The local newspaper was prepared to urge the auditor to end the litigation. and reached back for the doll. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. Daddy said I got the doll on the way to Grandma’s house.) Dad: Now there’s no more fighting over the doll. at great expense to the auditor’s office and the school board. I think I have acted properly. 144 50 Practical Negotiation Tactics . but nothing else up to that point was working. so it was worth the risk. (They continued to argue and whine and pinch each other. Dolly doesn’t need shoes on in the car. 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. Conclusion Dad’s use of a “surprise” tactic was extreme. Dolly has to have her shoes. Dad tried correcting them a few more times. in fact. He grabbed it and threw it out the window.Andrea: Give me the shoes back. Both Andrea and Susie were so shocked by their dad’s action. Finally. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. and that they had invested and spent the tax dollars wisely. and I hope I can convince you of that. The litigation itself had been going on for more than three years. He initiated the litigation against the local school board members and several banks that invested the money for the board. The auditor asked to meet with the editor to explain his position. Susie: Daddy didn’t say anything about the shoes. they didn’t say another word. he slowed down. The defendants contended that the auditor’s actions were politically motivated.
Editor: Well. Here are the papers. rather than drop the case. but recommended that the parties reach a settlement. there’s just nothing to back up your allegations.Editor: I’m certainly willing to listen. I really think the community would be better off. and a significant amount of money will go toward the tax fund. the bank would not have done that had we not proven our case. Obviously. one of the banks settled with my office. This morning. Auditor: Well. We believe the other defendants will soon follow suit. Your reporters will probably want to follow up on it. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. but I have to warn you that from what I’ve seen and heard so far. and it is costing your office money and good will. Auditor: I appreciate their arguments. I guess we’re finished here. Conclusion The editor wrote an editorial urging a resolution for the good of the community. Applying Pressure 145 . perhaps you should just cut your losses—and just drop the suit. They are very persuasive that this is just a political battle. Editor: Well. 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. From what I can see. as a matter of fact. They’ve been making that same argument from the beginning. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. this case needs to be dropped. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. That’s really the reason this has gone on so long. I think I have something here that will convince you otherwise. Thank you for coming in. but actually superior to some other entities you supervise.
I can remember spending hours playing with my friends and family when I was growing up. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Mike: I know. Tina is against it because she doesn’t think it will be used that much and it will take up a majority of the floor space in the family room.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. night after night. especially Kevin. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. but I think it will get a lot of use. Dad. Mike knows he needs to get either his wife or his son on his side. you might be able to dilute their power by identifying their different interests and addressing them separately. they’ll be mobile! The last thing I want is for them to be out cruising around. Kevin is against it because he is turning 16 years-old soon. and a car is more important to him than a pool table. I’d 146 50 Practical Negotiation Tactics . I want to talk about a car! Mike: It’s really not one or the other. Tina and their son Kevin are against the idea. If the other side involves more than one person. Tina: I’m really against this pool table idea. Kevin: I don’t really care about a pool table. although getting your license and getting a pool table are connected. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. Kevin: So am I. I know we’ll all enjoy it.
She noticed that Jim (another member of the union’s negotiating team. I’m surprised. 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. received it without comment. They bought the pool table. the head of the union negotiating team. and Kevin and his friends use it often. Mike: I really do. Wylma: Tom. then maybe it’s not such a bad idea. the chief negotiator for the company.like them to hang out here more. she joined his side of the debate. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. has just presented the company’s initial wage offer. Tom. Instead of both opposing the idea. Kevin. Here’s how the negotiations went. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. Once Mike convinced Tina of the idea’s merits. 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. I thought we were making real progress. A pool table could attract them here. A number of contract changes have already been worked out and Wylma. don’t you think you guys would use it? Kevin: I guess so. some. What happened? Applying Pressure 147 . only Kevin did. Conclusion Mike found an argument that divided Tina and Kevin. But I’m not going to hang out here all the time. Tina: Well.
Wylma: Jim. 148 50 Practical Negotiation Tactics . Jim? Jim: Yes. you’ve heard our demand. This is just what we think is fair. Tom had reduced his wage demand significantly. But Tom. Let’s start again tomorrow morning. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. Wylma distributed copies of financial data that showed the company’s current condition. these are accurate. Wylma: Tom. Right. Do you think this is reasonable? Jim: (looking uncomfortable) Well. you’ve seen our sales projections and production costs. I think you need to rethink your demand. but he added some workplace changes that Wylma was comfortable negotiating. Wylma: Let’s take a break. Your demand is totally unreasonable. (When they resumed. When the negotiations began again. these are our actual accounting figures.Tom: Wylma: Nothing happened. Tom: We don’t think so. as Jim can point out to you. forcing them to reconsider their demand. you certainly are aware of our financial situation.) Wylma: Now Tom.
get over it. Humor often works to break the tension of the room. That will just make a bad situation worse. some of the siblings decided they liked giving presents to one another. I don’t feel Christmas in the way I used to. Ever since Mom and Dad died. it was easy to agree on just giving presents to the children. but it should never be at anybody’s personal expense. Madison: Okay. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. Stay alert and watch for clues that a negotiation is about to get out of hand. but it is really important to me. Tempers flare and people say things they shouldn’t out of anger or frustration. and it makes me very sad. and had children. the oldest and youngest Jones children. 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. especially between Madison and Cory. Cory: Madison. so pressure grew to draw names and exchange gifts. You are almost 40 years old. but as the children grew up and had families of their own. so what’s the point? I don’t need another tie! Madison: It’s not the gift. When all of their children were small. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. Example 1 The four Jones kids grew up. so you can find a way to quickly neutralize it. Applying Pressure 149 . I want to say something. Sometimes the argument got heated. but the thought that matters.Tactic 38: Break the Tension Tension is inevitable in most negotiations. married. We can’t afford to buy each other things we really need.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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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.
: Julie: Dara: Julie: Girls. but since the other children in their room were not there. If I can be the Princess. Julie wanted to play “dress-up. C. however. the exchange will be between things of equal value. (In a successful negotiation. or maybe tomorrow.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with.” Dara. When that point is reached. It is the give-andtake of a negotiation: one party agrees to give up one of its demands in exchange for something of value from the other party. One day. and that doesn’t happen without compromise. Okay. how about going out to the yard for a while? You can swing or play ball. At some point. Mr. not the Prince. 154 50 Practical Negotiation Tactics . don’t you want to play? We could color before your mom comes. each side must decide whether or not one more compromise will produce an agreement that they will later regret. Isn’t it “later” yet? Right now would be a good time to go outside. 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. Then we can color. I want to play “Prince and Princess. C.” Can I color now? You said we would color later.” but she needed Dara to play with her. who was outside with older children. it is better not to compromise. If there is resistance to compromise. was ready to color. The day-care worker wanted to take them outside for a while so that he could visit with his friend. they would have to play ball with older children. Both of the little girls liked to play ball when they were outside. Example 1 Julie and Dara both attend a local preschool. the individual might be afraid that the exchange isn’t equitable). Dara.: Julie: Dara: Mr.
They did all the compromising they were willing to do. The existing parking lot didn’t meet the current parking standards for that size theater. The owner decided to try for a variance. however. 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. or apply for a variance.Mr.: Julie: Hey. C. When his variance application was made public. C. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. the owner had to supply additional parking. Conclusion The children stayed inside and played dress-up. and teenagers attracted by Making Progress 155 . We don’t want to go outside. 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. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. The owner and a small group of neighbors met to talk about these problems. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. you can come back in and play “Prince and Princess.” No. According to the city’s zoning laws. Mr. failed to offer the children something that was as important as the plans they had made. the parking lot will start to look trashy. wouldn’t you like to go outside first? After you swing for a while or play ball. and they still had time to color. We want to play dress-up and then color. neighbors became concerned about the changes to the mall.
I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. the closest parking to it is along Elm Street. and we’d like to keep it that way. Right now. I’m afraid. In fact. and break in his door.the theater will start to hang around and maybe wander around our yards at night. but it’s not ever full. We’d like you to prohibit cars from entering or leaving from the south lot. What if I changed the entrance to the middle of the lot? That way. the south parking lot has not been used much. We’d really like to block off that cut-through and have the theater face the south. I could put a privacy fence along the east and west—at the backs of your yards. With the Comedy Club and the grocery store on that end. So. We’re just not convinced. if I agree to move the theater entrance to the south side. Many of our homes back up to that lot. And. with your plans to put the entrance of the theater on the east side of the mall. as you said. the north lot is used more. You could have all of the traffic enter from the north lot. lights in and out at night can be very annoying. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. 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. Not having in and out traffic to the south of the mall is just not very practical. not having direct access to the south lot from the street would be unworkable. driveways on the south side of the mall are along the east and west side of the parking lot. We hope you’re right. Right now. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. even though I’m not adding any parking. The neighbors: Owner: 156 50 Practical Negotiation Tactics .
If the fence was set back the width of a driveway onto your property. The compromises were what everybody could live with. and they discouraged patrons from parking on neighborhood streets. But you’re going to have to have some kind of security as well. add a new entrance into the south lot. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. Agreed. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. Conclusion Both sides had to give up something on certain items in order to reach agreement. then will you agree not to push for increased private security? Yes. put a privacy fence along both the east and west sides of the south lot. And a year after the theater opened. however. Making Progress 157 . there could still be access from the street to our garages—just not to the main parking area.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. set back a driveway width. If I agree to move the theater entrance to the south. and make sure the parking lot is kept clean. The fences created a buffer from the lights and noise. Teens can form into gangs if left unwatched. the neighbors reported that they were very happy with the way it all worked out. Now you’re talking about considerable expense.
and what kind of complaints might have already been made. This gives you an advantage. incident was usual or unusual. Present your position forcefully. thinking that you will be just as easy to work with on the sticky issues. Lonely: If you’re here to complain about my Rocky.m.m. and that as angry as they were. but going out of your way to be friendly is an especially helpful tactic. Joan was already pretty tired. Mrs. so her neighbor’s barking dog came as an unpleasant surprise. Lonely’s only companionship. Joan decided to at least try and talk to the neighbor. Example 1 Joan was new to the neighborhood.m. but be friendly. Your opponent might give in readily. 158 50 Practical Negotiation Tactics .Tactic 40: Be Friendly Being polite. and because she was hard of hearing. The dog was Mrs. respectful. She learned that everyone in the neighborhood had complained at least once. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. They might even start to underestimate your negotiating skills. 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 sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. and didn’t stop until 6:00 a. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. Close your windows at night and don’t listen. because you are the one to set the tone for agreement. Lonely. I’m Joan. and pleasant always enhances one’s ability to reach an agreement. Joan had a new baby. and I just moved in next door.. and started to get upset. just forget it. Joan: Hi. She didn’t believe her neighbors ought to complain about the barking. If your opponent is aggressive or angry. they had gotten nowhere. she just didn’t think it was a serious problem. Mrs. professional.
How long have you had him? Almost eight years now. Here’s my little angel. then. The barking at night has been mentioned to me. by the way. Who. though. Lonely: Joan: Mrs. Do you think his age has contributed to some of that? You know. I’d like to introduce you to my new baby. I’ve got a friend who is a veterinarian. Why. I sure hope he starts sleeping through the night soon. I know that some of these people around here don’t like him. Maybe I could come back tomorrow and bring him? Oh. don’t worry about that. (Joan’s sleep was disturbed by another night of barking. not at all. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Mikey. I stopped by and visited with him over the fence this morning. it’s probably because they just haven’t had the time to get to know him. Lonely: Joan: No. I just wanted to come by and introduce myself. but she took her baby and went to visit Mrs. No. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. When he does. sure. Lonely: Joan: Mrs.) Hi. isn’t he cute! He’s a handful. no. I need to get the baby home. Making Progress 159 . Lonely: Joan: Mrs. I might have to talk to you about Rocky. Well. Lonely: Joan: Mrs. Well. is a really sweet dog. He’s a real comfort to me.Joan: Mrs. I can’t pay for something like that. I guess so. I’ll see you. He’s been keeping me up at night. I guess that would be okay. Lonely again. I’ve only got my Social Security. too.
I think that if you could have let me know ahead of time. that’s very understanding of you. he prescribed medicine that gave Rocky a more regular sleep schedule. Here’s how the meeting went: Company ZZZ: We’re very sorry. Company ZZZ: (surprised) Well. After Joan’s veterinarian friend visited with Mrs. U. Company ZZZ was not able to meet with local elected officials regarding the status of their operations before the press reported the layoffs and the uncertain future for the 150 white-collar employees. Lonely and Rocky. The barking all but stopped. Company ZZZ. and Mrs. They anticipated that it would be an unpleasant meeting..Conclusion Joan’s friendly approach enabled her to understand Mrs. that the press got hold of the story of our company’s activities before we could call you to let you know. Under its new corporate structure. When he heard the news on the radio. Lonely’s needs and arrive at a workable solution to the problem. 160 50 Practical Negotiation Tactics . It’s very difficult to make a move of this type without having it leak out. recognizing that the layoffs would be an issue in upcoming local elections. Mayor: (very friendly) I understand how these things happen. its 150 management and sales employees could continue to work in Happy City.A. overseeing a factory in Mexico and selling products in the states. Lonely didn’t have to pay for the medicine she could not afford. of course. Joan took up contributions from the neighbors. you would have.S. Hearing about this from the press obviously puts you in a very embarrassing situation. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. agreed to meet with the mayor. the mayor called and asked for a meeting with Company ZZZ officials.
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. It’s possible that some of the 300 laid-off employees will find work at this new endeavor.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. the city has a potential buyer for your plant building. and I want them to know that. We recognize that your new corporate owner is a large company located in Malaysia. Would you be in a position to talk to me about such a deal. the 150 management/sales jobs did end up moving to Mexico. Making Progress 161 . Unfortunately. We just haven’t heard anything yet. The buyer is a “disadvantaged business” we have been working with for some time. Mayor: Great! Let me know when we can talk again. because I’d hate for us not to make an appropriate pitch to them. Company ZZZ: I’m not sure what to tell you on that. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. so we need to understand how we can affect their decision on keeping an office here. and the mayor was reelected. or would we need to involve the Malaysia group? Company ZZZ: Certainly. This strategy worked. Mayor: Please let me know as soon as you can. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. They need a really good deal on the plant price. Many laid-off employees did indeed find new jobs at the plant. You’ve been very understanding about this. By the way.
Alexis knew this was not fair.00 to spend. Susan repeated her demand. are talking about a possible settlement of the issue. Then he played the tape. or used to pressure the other side to agree to certain demands. the accused. He asked his elder daughter about the arrangement. had $40. Example 1 Susan. until Susan said they would evenly split what they bought. thus becoming a source of embarrassment. and Alexis. this time in front of a hidden recorder.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. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. The effect on the other party might be even more substantial if lies. age 14. Alexis. but Susan had only $20. Somehow. and Jones. The two sisters had saved up a little money so that they could buy souvenirs. Michael Wood. She borrowed a tape recorder so she could ask her father if this was a fair deal. were on vacation with their parents in Myrtle Beach. or simply “bad faith” methods have been used by the other party. age 15.00. who was disappointed to hear that she might propose such a deal. Susan denied it. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. They might worry that the tapes will be made public or given to others. Susan understood the impact a tape recording can have when it reveals a lie. Jones’s supervisor. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. 162 50 Practical Negotiation Tactics . Alexis then played the tape for her father. South Carolina. the younger sister. Alexis agreed. the investigator. Conclusion For the first time in her life. Fred Adams. threats.
and now I’ll ask you to repeat your answers—on tape. He failed to think about what might be the next step. I think I can write my recommendation. But by refusing to repeat his answers. he also lost his negotiating position. And you did not threaten her job if she did not. stares. Appleton both claim they saw the incident and will testify. No one could have possibly misunderstood your intentions? No reasonable person.” meaning something other than copies? No. to quote you. I’ve brought a tape recorder with me. Mr. (a long pause) I want to see my lawyer. Well. exactly what you said to Ms. Making Progress 163 . “Do what I want. So. Mr.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. Conclusion Jones had knowingly lied when he denied the charges. and gestures did not have a single hint of sexual implication or innuendo? None at all. Starr. Jones suddenly realized that his strategy would not work. When Adams set the tape recorder on the table and revealed that he had witnesses. Your request. Ruiz and Ms. Jones. Stuart. So you refuse to repeat the answers you just gave us? Yes. And please describe your general manner. I simply asked her to make copies for me as quickly as possible. you are aware that the next step in this process is to ask witnesses to come forth. You never touched any part of her body? Not even accidentally? No.
Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. Maria. 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. Many of us learned this one from our parents: After two people agree to the strategy. Their dad instructed them to share the candy bar. of course. one person is given the task of dividing the object(s) into two parts. Realizing the potential of getting the “smaller half. Oh.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. Roberto will get to choose which half he wants. The second person then chooses which of the two parts they will receive.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. which certainly is large enough (he naively thought) for two young children to easily share. because you did the cutting. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . with the remaining part going to the person who did the dividing. the classic “split and choose” tactic might be the best way to settle the issue.” the divider. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. is usually careful about dividing the object into two equal parts. Maria and Roberto: No. take this knife and slice the Snickers into two halves.
000. Example 2 Two friends and business partners. There is only one place for an access road that must serve all lots. 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. Lots must be at least one acre to be developed. that sounds fair.Conclusion When two people desire the same object and it is something that can be divided in some way. according to county deed restrictions. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. They have a recent appraisal that values the property at $150. quickly recognize the fairness of the divideand-choose method. so we should be able to divide the property fairly. both parties. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. Deal? Clarence: Sure. I don’t really care which lakefront lots I keep. Archie is ready to build a retirement home on the property. but is not sure how to arrive at a fair split. Making Progress 165 . but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Then I will choose which parcel I want. Clarence and Archie. Archie: That’s true. even children. Clarence agrees to divide it. Archie: I really don’t care either. and wants to divide it into two separate parcels. That makes them more desirable. Clarence: Right. Give me the map and a pencil. Archie: Here is the map. The problem is that one of us will get four lakefront lots and the other will only get three lots. jointly purchased fourteen acres of lakefront property several years ago. They all have a great view and are equally desirable to build on.
Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. Archie chose the parcel with the three lakefront lots. Which would you have chosen? 166 50 Practical Negotiation Tactics . and both men were happy with the arrangement. and the second parcel with four lakefront lots and one other lot.
he also set up all of the furniture in a second-floor bedroom.” thus extending the scope of the negotiations. “Okay. What started out as a single issue is now a combination of a major issue and a much smaller issue. miles from their home. so the salesperson delivered the suite himself. we’ll take the suite if you’ll throw in free delivery and set up the furniture.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.” Under store policy. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars.” Many people have witnessed or used this effective negotiating tactic. With a great deal of effort. Conclusion The amount the couple spent was fairly large. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. is expected to dicker over the price. etc. delivery was limited to a small geographical area. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). supposedly the bargainer in the household. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. His tactic was to throw in a “nickel” in order to make lots of “dollars. However. attach legs. Jason was having a hard time getting the salesman to lower the price. and the delivery carrier doesn’t set up mirrors. 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 . Her husband Jason. Brenda did her part when she said.
the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. 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. it can be a dealbreaker. In one case. “Okay. 168 50 Practical Negotiation Tactics . This experienced bargainer said. At the end of negotiations. If one party misjudges the situation. we’ll agree to Health Plan A with another ½ cent on the pension fund.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.important item. so be prepared to withdraw the nickel and dime item at the hint of trouble.
I’ll take the color TV. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. and performance evaluations for people to come across as likeable. Kathy: Then I’ll take the couch and love seat. Kathy: But they are a matched set. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. decision-making meetings.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews.” 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: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . thus creating the impression in others that the good qualities they see are present all the time. Donna: No way! These are the last two pieces of furniture. People tend to make an effort to put their best foot forward. Donna: Okay. trustworthy. Kathy: I’ll take the pool table. This creates what is called a “halo effect. or knowledgeable. and all the rest is small junk. Kathy: I suggest we take turns choosing which of these things we want. You can go first. Donna: They match. Donna: I’ll take the bar with stools.
Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. Let’s call Johnny Ryan. (Pause) We’ve got to settle this today and get this stuff moved. I want the love seat.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. and he has always struck me as an honest person. I trust his judgment. He’s our cousin. and if the bar and stools should be one item or two. Example 2 During a heated labor negotiation. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. with a record of labor involvement that included three recent strikes. He might or might not have also been a good arbitrator. I want the stools. Good idea. What for? Tell him the situation. and ask him if the couch and chair should be one item or two. Johnny had the “halo” of an honest person. 170 50 Practical Negotiation Tactics . what can we do? Give me the couch and love seat! No. 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. The union negotiators.
the management team hired Sam Boston. and that he did. thus bringing the negotiations to a conclusion. but the power of the so-called halo effect was great. This time. He solemnly told the union negotiators that he had been hired to review it. the former union president. without any reservations. On Monday. as a consultant to review their proposal. Making Progress 171 . Two weeks later. when negotiations again stalled on a retirement plan issue. Boston was widely known as a totally honest man who speaks his mind.simply did not trust the management team. even if the proposal appeared to be valid. Boston went to the negotiation table with the management team. He said he believed that it would work as presented by management. They might have stretched his halo farther than his expertise and experience warranted. The union accepted the proposal. The teams took a weekend break from the stalled negotiations. the city management again hired Boston. 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. During the break. the consultant did not speak. but his mere presence caused the union leaders to accept a management point as valid.
but you’ve priced it way too high. $229. but the key is to gather facts that you might need—not just the facts that you will need.500.000. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. $235.000 under the listing price! We realize that. This offer is for more money than any four-bedroom houses on this neighborhood list. but we feel that it’s a fair offer.000. but the right facts presented at the right time can chill or astound and completely turn things around. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. What? That’s $35. Sam Jones. and we are countering with an offer of $250. Here’s a list of the five that are about the same size as yours.000.000. has owned the house for 24 years and is downsizing to a condo. Sometimes. (Next day) We’ve reviewed the records you’ve produced. We love your house. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . 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. They believe it is overpriced. The owner. They sold for: $225.000. and $237.000. the other party will ignore or refuse to believe the information.000. $237. I’ll get back to you.
600 for a computer. Example 2 Supervisor: You know the policy. We accept. Conclusion The Joneses had based their asking price on the advice of a friend.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. The last 20 were over $2. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price.000 each. Conclusion Hatfield had anticipated what his supervisor’s position would be. I’ll get called on the carpet. and wisely chose exactly when to present them in order to make his point.600 unless the company president approves. who was not particularly knoledgeable about real estate.000. Order the new computers. 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. Hatfield: While I was at purchasing. Here it is.400 each. That’s the bottom price. We’ve talked with purchasing and we have the authority to buy seven for $2. I asked for a list of all new PCs bought this year. Making Progress 173 . No one can go over $1. Supervisor: If I okay this purchase order. I’ll be… Okay. Supervisor: Well. let’s not worry about it. if other departments have ignored the policy. Well… We have a written counter of $245. Hatfield: My staff has done a lot of research. and did his homework.
Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. Would I do that? Jenny: Maureen. I can do that within the rules. A maximum of three books can be checked out to a person at any one time. Maureen: Well. you know me. Example 1 Maureen: What. They can help you identify or better understand what the other side really wants. I can’t check out these four books? Jenny (Librarian): That’s the policy. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. can you check out two on a card for him? Jenny: Well. reveal misperceptions or lack of knowledge about positions that can be corrected. and they would all be unavailable to others. 174 50 Practical Negotiation Tactics . The effective use of probing questions can help achieve a favorable settlement. Maureen. some people would have forty or fifty books out at the same time. Maureen: So you trust me with the books. If you trust me. but I don’t set the policy and I can’t make exceptions. but you don’t want to jeopardize your job? Jenny: Yes. I trust you. I’m sure you would not. I want two of these. But I can’t break the limit rule—it is an absolute rule here. and two are for my husband. Otherwise. Maureen: Well.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. yes.
They say it’s a security issue. If that data ended up in the wrong hands. Mary and Kenzie? They are 2-3 pay grades below us. and Kenzie. and they don’t even have a use for the sales data. Jay. it could kill us. Babu.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. Who does have access clearance? Mike. but it’s because you don’t have access clearance. What’s the policy number or date of approval? I don’t know. (Next day) Do you have the policy about giving out product sales information? No. Making Progress 175 . we can’t do that. Mary. I couldn’t find anyone who knew it. Security? Right. Brooks. But this forces us to make decisions without complete information! Yes. Why? Some policy? Yes. Sue. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. Can you get me the number? Sure. are you sure I can’t get your information technology people to give us direct information on product sales? No.
Mark: Well. When can I get the data? Mark: Today. Once he discovered that employees in lower pay grades had access clearance. Jack: Can you ask your V. Jack was able to receive clearance as well. Jack: Here. I’ll sign now. I’ll get it for you ASAP. 176 50 Practical Negotiation Tactics . His probing questions turned up a critical fact. if we can have access? Mark: I guess so. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. that’s been the policy since I’ve been here.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.” He intended to do this until he hit a dead-end or was able to find a solution to his problem.
and the classic Walk Away (Tactic #48). Tactic #49 (Final-Offer Arbitration) should bring about 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. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. hours. If friends or neighbors need to settle something but prefer to avoid the negotiation process. T Reaching Agreement 177 . this process can easily result in a final settlement. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. days.Stage 7: Reaching Agreement he final stage! It might come minutes. When multiple issues are at stake and most have been agreed upon during negotiations. or even months after the first offer is presented. and the child learns an important lesson about life. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. this tactic can produce an agreement. When two parties believe they have an oral agreement. In this process. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. They bring it out when a dispute arises. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them).
Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. Let’s do go to Virginia Beach and Washington D.C.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell.C. Larry Snyder gets bored staying in any one place for many days. but his wife Nancy likes to stay put and relax.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. She said. His wife had carefully planned her exact “premature” vacation agreement. Nancy brought up the subject of vacation again after dinner. They both have stressful jobs and look forward to their annual vacation together. The bargainer skillfully 1) begins the congratulation sentence “I agree…”.” Conclusion The husband was so excited about visiting Washington. After days and weeks of on-again. Example 2 Negotiations can take a long time and incorporate many issues. 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. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . 2) allows the other side to feel the release that comes with completing the bargain. As he hugged her. off-again discussions. 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. “I’m thinking of agreeing to your plans for vacation. 3) and adds one last key demand to the congratulation sentence. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday.
) Here’s what happened: Bob: I knew that the other side was similarly harried. Reaching Agreement 179 . (This is a bad position to be in. It was so close. In our last offer. but acceptable.almost willing to accept any deal. 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. because it makes you pretty vulnerable. One operating issue involved the probation period for new employees. When the chief negotiator emerged with his team and headed toward my team. The old agreement specified a 30-day period. fit. “It was hard for us. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. but also that they sensed the weariness of my team. symbolizing that he was agreeing to the entire final offer. “…as long as you give us a 45-day probation period. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. but the other side continued to ask for 60 days. One of the best pieces of negotiation advice is to remain fresh. Therefore. The celebration had begun. There were grins and handshakes coming from the other side. We all knew that it could come down to agreement or strike. Ted said. as the negotiator came closer. I felt the tension in the room. we made some small concessions on financial matters. but we agree to everything in your final proposal…” Members of my team shouted hooray. and rested. he turned on a large warm smile and extended his hand to shake.” Bob: Ted timed this perfectly. However. My team had convinced me that doubling the time frame would create a real problem on the shop floor. but held firm on remaining operating principles. we held firm on this and did not discuss the probation issue and many other “dead” issues for days.
knowing that it will probably be agreed to in order to continue in the euphoria of the moment. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. However. 180 50 Practical Negotiation Tactics .
I like it. (Vahaly drives the new Highlander home. all from Sue Wilson. and the lease on my Avalon is about to expire. what can you do on a 36-month lease? Reaching Agreement 181 . He stopped by Pembroke one day to look at the new models. but I thought I might want to try a new Highlander. the following exchange occurs. right? Jay: Yes. but my Avalon is a good car. My name is Jay Vahaly. I don’t want to negotiate. Your opponent will have to either let you go and run the risk that things are really over. Jay: Hi. but his Avalon has been a good car. Jay. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. Jay. be sure you think this through beforehand. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. or go after you and perhaps make a new concession in order to get you back to the table. The next morning. if I roll over the lease to a Highlander.) Jay: Sue.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. a veteran salesperson. too. He really likes it. Sue: Well. You bought your wife a new van just last year. here are your keys. and he can simply buy it when the lease expires. Whether you are really bluffing or you are serious. You had time to assess my car. Sue: I remember you. how did you like it? Jay: Okay. I’ve worked with you before.
Jay. I thought I’d get a fair deal. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. at most. they came down to $199 more on a thirty-six month lease. $100 more. Jay: What? I was thinking the lease payment would be. They’ve talked about retiring in recent months. Jay accepted.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. Sue called him as soon as he walked in the door and offered another $50 break on the lease. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. He was prepared to keep his Avalon if the lease was even $1 more than his limit. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. He effectively used the walk-away tactic to let Sue know that he was firm on the price. (15 minutes later) Sue: Well.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. I’m disappointed. a successful musical instrument sales and rental store. Sue: I’ll try. Please go back and work out a lower lease payment. Sue: Sorry. (Jay got in his car and drove home. (He walks away) Sue: No. That was the figure he was looking for. Let me try again. Jay—wait. These Highlanders are hot items! Jay: Well. but 182 50 Practical Negotiation Tactics . Jay.
5 million. Michael Roberts. Larry. and we gave you our price. today. He met with Bizannes twice before. with a certified check. and I’m not interested in less. I still want to develop this block. Michael: Well. our accountant said it’s worth $6 million. but their continued walkout convinced Michael that they would hold firm. go back to your office. Two months later. (Judy and Larry walk into the back room and close the door.5 million. they were prepared to accept $5.5 million for the building. Michael calls on them again with a check for $5. Larry: Judy. You rejected it. Judy: Larry. Michael: I have a check right here for 4. so why are you here? Michael: I’ve discussed it with my partners.0 million. Reaching Agreement 183 . Michael: Good morning. let’s eat lunch. after no contact from Larry or Judy. a local developer.) 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. and he is offering us $4. visited their store. and I only need your building to own it. Larry: Yes. you’ve already told us that. Larry: Michael.) Larry: Michael is here again. In reality.5 million. One day. Larry.both of them love their store. What do you think? Judy: Larry. come out here! (Judy comes out from the back room. and I’m prepared to offer you $4. which the Bizannes accept. How’s business? Larry: Great! I’m surprised to see you again.
the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Jenny told them to sell it. which is generally voluntary. Lynne and Gary bring the restored Singer to Jenny’s house. They inform her that they put the machine on e-Bay and have an offer of $1.000. We have a few dollars invested in parts and we had fun working on it. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. Jenny: No. both sides have agreed in writing to accept the arbitrator’s decision. but they wanted to give Jenny $500 for her “share” of the machine. which she has kept in a barn for over ten years. That was the deal. In arbitration. Lynne told Jenny that she and her husband Gary have restored two other Singers. I offered it to you for nothing. Each party wants their offer chosen. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision.000. Let’s split the money. 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). One day Lynne dropped by for a visit and the discussion turned to the old Singer. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Six months later. Jenny has an antique Singer sewing machine. Lynne: No. In most arbitrations. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. Keep the $1. Lynne responded that this was their intention. 184 50 Practical Negotiation Tactics . In ﬁnal offer arbitration. I won’t take it. In mediation. and would be able to restore hers as well. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. Both involve the use of third parties who are objective. Example 1 Jenny and Lynne are sisters.
Tina: Good. the old machine was only worth $50 when Lynne hauled it away. so I am invoking the finaloffer arbitration ground rule we have in place. They should get the other $950. (One week later) I think Jenny’s position is the most reasonable. after six weeks of negotiating.m. I can’t see any way to reach an agreement. Their father found Jenny’s position to be the most reasonable. Tina: Yes. on Friday.” Lynne proposed a 50-50 split.m. we are down to only three unresolved items. first on the health insurance co-pay. Ralph: I know. he did not need to “haggle” with them. As a brief explanation. Ralph: Right! (Friday at 3:00 p. Tina. since he could only choose one offer. Example 2 Ralph: Well. but we’ve made no movement on any of them since we started. My troops are getting restless. I’ll buy that. binding decision on the three items. Then we both submit our final offers to Judge Ryan within 48 hours. I have chosen management’s offer to keep it as it is under the current contract. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. and meet back here in 72 hours—3:00 p. Any increase in value was due to the work of Gary and Lynne.) Judge Ryan: Here is my written. The union’s position could have run into millions of dollars. based Reaching Agreement 185 .Jenny: Dad: Okay. At best.
Second. and peacefully finalize a contract that contained several important gains for both sides. Now let’s get a signed contract. but we agreed to this process. I’m not happy with your decisions. I have chosen management’s offer because the union did not justify why the past practice should be changed. Conclusion The final-offer arbitration process enabled the parties to gain a fast. money. Well. on the merit pool distribution method issue. 186 50 Practical Negotiation Tactics . I have chosen the union’s final offer. reasonable resolution to their last three unresolved issues. It will only cost $120.Ralph: Tina: on last year’s data.000—less than 1 percent of the total package. I’m sure you realize that we could have taken six more weeks to reach the same point. Ralph. on the clothing allowance. No increase has been given for six years. At least we both saved time. and an item that large should have been negotiated at the table. nor why their method was superior. Finally. and stress.
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. they looked at this particular house on their own. and one of the other couples looked very interested. everyone is busy grappling with the details of the negotiations. They finally looked at a house they really liked. not the furniture. we won’t be involving our real estate agent. The owners were selling the house without a real estate agent. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. At the very least. and felt that they would have to work fast to make an offer before someone else did. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations.000. They saw the “For Sale” and “Open House” signs. If we shake hands on it right now. and decided to stop by to see if they liked the house. Example 1 Bill and Paulette had been house-hunting for some time. They were not the only couple to come to the open house. We’d like to make you an offer of $150. and while Bill and Paulette had been using an agent to help locate houses. Bill and Paulette fell in love with the house. Seller: Yes.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. Bill: Reaching Agreement 187 .000. Seller: We’re asking $152. Obviously. 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. all the usual stuff in a sale. however. Bill pulled the seller aside. During a discussion.
the refrigerator.000. real. and the two area rugs were specifically included. Let me just get the standard “offer of sale” form and fill out what I hear you saying. that’s what I meant. It worked. a public agency. in fact. Conclusion The seller had always intended to leave the garbage disposal. then we have a deal. the house is yours. Seller: Okay. (The seller recorded the offer of $150. he began to have “problems” with her job performance. Sign here. In the section for fixtures and miscellaneous items to be left on the property. all window blinds and drapes. she said that her supervisor had repeatedly asked her out. since he probably would have missed them) Yes. and when she refused. the hutch. and that the problems with her job performance were.Seller: Just a minute. but I’d like to make sure there are no misunderstandings. Under the section for appliances to be left on the property. and the garbage disposal. If it’s what you meant. Example 2 Monica brought a sex discrimination charge against her employer. the hutch. When he had the chance to put the deal in writing.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. I think we can work something out. he listed an attached hutch in the kitchen. In her complaint.) Seller: So. The supervisor assured the employer that there was no basis for her complaint. and two area rugs. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and the two area rugs. The supervisor pointed out that he had a staff of 20 or so women. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination.000. he listed the stove. he left the price at $150. Bill: (pleasantly surprised to learn that the garbage disposal. look this over. and had been prepared to drop his price to $145.
000. You’re just trying to make it seem as if your supervisor did nothing wrong. He offered to send settlement agreement papers to her. Monica had. even though we’re certain we would prevail. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. and expensive matter. And the confidentiality clause is standard. and must agree not to tell anyone about the $100. drawn-out. It might be standard when there’s a settlement. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100.000 without actually having to prove anything.000. Look.000.there was little basis for the complaint. then Monica had to acknowledge that the supervisor did nothing wrong. my client is supposed to formally withdraw the complaint rather than just settle it. but it’s not standard when a complaint is formally withdrawn. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. by this time. 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. you didn’t mention in the agreement that in exchange for the $100. but said that fighting the charges would be a long. Why’s that? Well. settling—What difference does it make to her? She’s getting her $100. The supervisor insisted that if the employer felt he had to settle. He’s happy to prove that in court. even though you are paying Monica because we can prove he did do something wrong. But the employer doesn’t want to go through the expense and publicity of a trial.000. Withdrawing. I’m He: She: He: Reaching Agreement 189 .
It was made clear that the employer had paid the additional $100.000 and the conditions of the offer. 190 50 Practical Negotiation Tactics .000. There was a confidentiality agreement. 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 $200.000 when all that was asked for was $100. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. but word did get out that a public agency paid $200.000.She: authorized to pay $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 just to get the employee to “withdraw” the complaint. I’ll take your offer back to her and let you know. to his disadvantage.
Reaching an agreement is the first step. operating under an agreement after it has been reached can be even more difficult.” By the same token. In Tactic #17 (Package Items). The degree of detail and formality of a written document will. As these examples of personal and business negotiations show. a written document is hardly necessary. commitment. One way to help the parties abide by an agreement is to put it into written form. and when they agree to solve problems together. it is much more effective in the long run when the parties enter into “win-win” agreements. I thought you said something else. it would have been easier to resume negotiations at a later date. but it was not what I meant. and contract. even an informal agreement benefits from some type of written documentation. depend on the kind of negotiations in which you are involved.” Clear communication is essential if you want to reach an agreement and have it abided by. “That may be what I said. the three sisters reached an amiable agreement. but some of the decisions were put off for a couple of months. then the parties have to abide by the agreement. rather than attack each other. Putting the Agreement in Writing 191 . A union contract. talking is not always the same thing as communicating. most certainly needs to be in written form. Unfortunately. Think of how often you have said to someone. A Communication Hearing is not necessarily the same as listening. “Oh. reaching an agreement is sometimes a long and difficult process.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. However. of course. Putting an agreement into writing serves three purposes: communication. If the agreement reached at the time had been put into writing with all three sisters signing it. Certainly someone has said to you. when they engage in honest “give and take” negotiations. When two friends agree on what movie to see. however.
Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester.944. And because the sender and the receiver are two unique individuals. The sender wishes to convey an idea. that is. His mom could more easily enforce the agreement if she had it in writing. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing.” 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. When you create a written record of the details of an agreement. seek information. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement.Communication is a process that involves a sender and a receiver. 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. 192 50 Practical Negotiation Tactics . a couple of months away. or express a thought or emotion through words. When communication is limited to the spoken word only. or movements. pictures. Who isn’t excited about buying a brand new SUV or truck? Until. the price is spelled out in the loan document as “twenty-two thousand. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. or movements being used by the sender. the message being conveyed and received might be understood differently. you have created something tangible that can be referred to in the future when memories become fuzzy. 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. pictures. In Tactic #4 (Use Objective Criteria). he can be reminded of the details because it’s all there in black and white. sounds. nine hundred and forty-four dollars—$22. If Jason fails to live up to his side of the deal. sounds.
the real estate contract includes information about the buyer and seller. and put that information into the document. Generally. how many. the address and description of the real property. when. details such as what fixtures stay or what appliances go can be easily overlooked. Here’s what we mean. ask yourself the basic questions of who. You can do this more formally by taking them to court (perhaps as a last resort).Contract Finally. leading to misunderstandings and contract disputes. protect yourself by having a written. say. Putting the Agreement in Writing 193 . dating it. WHAT? The written document should clearly describe the item(s) covered by the agreement. have your spouse also agree to the details of the agreement. 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. and dated agreement. signed. which. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. which kind of. your plants die because the house-sitter wasn’t told to water them. one party will change behavior in exchange for something of value from the party who wants the behavior changed. one party will work if the other party pays for the work. However. Failure to do so can lead to big problems. One party wishes to buy what the other wishes to sell. or it isn’t an agreement—it’s merely the conveying of a gift. before the trip. Both parties must receive a benefit or something they personally consider of value. 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. WHO? Provide of the full names the parties necessary to the agreement. and how much. where. in writing. and so on in standard contract form. When you are ready to commit yourself in writing. pulling an agreement in writing. why. If you have agreed to pay someone to house-sit while your family is on vacation. Carefully and completely describe the subject matter of the agreement. as many people learn when they purchase a home. what. and getting all the parties to sign it usually creates an enforceable contract. In either case.
dating it. which one or which kind of. agreed to the same thing. in fact. And it can create a tangible reminder of the deal (or an enforceable agreement. 194 50 Practical Negotiation Tactics . It gives the parties an opportunity to really buy into the deal. how much or how many. Putting an agreement in writing.The remaining questions fill in the details of the agreement. and having all parties sign it ensures that the parties have. if that becomes necessary). depending upon the deal: when or where. The more-specific and clear these details are. the better.
and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 9. ________________ 2.Name of Negotiation Tactic 1. ________________ 4. ________________ 8. ________________ 6. ________________ 10. ________________ 3. ________________ 7. ________________ 5.
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Upper Saddle River. and C. References 199 . 2004. Victor. W. Maddux. Roger. Fuller. Chicago: Richard D. Fisher. Irwin.: Waveland Press. Ill. Kennedy. Patton. Pocket Negotiator. Mediation. R. Calif. Fisher. New York: Penguin Books. You Can Negotiate Anything. and J. Lewicki. M. 1989. New York: Bantam Books. 1980.. Domenici. Negotiating in the Real World. Eshelman. Inc. Inc. Labor Relations and Collective Bargaining: Cases. 2001. David. 1997. 1988. C. Inc. Gotbaum. 1991. New York: M. Ury. George. The Negotiation Handbook. Heavrin. Saunders. The Negotiator’s Handbook. Inc. R. and J. New York: Basil Blackwell. 2001.REFERENCES Carrell. Negotiation Skills. Los Altos. Cleary. Inc. Practice. M. J. Oakland. Getting Together: Building Relationships As We Negotiate. W. Sharpe. 2nd ed. R. Getting to Yes: Negotiating Agreement Without Giving In. Minton. 1988. McKay. and S. New York: Simon and Schuster. and M. 1999. and Law. E. Inc. 7th ed. 1987. The Relaxation and Stress Reduction Workbook. Upper Saddle River. New York: Penguin Books. Clark. Herb. Roger. Patrick J. 1996..: New Harbinger Publications. 2nd ed. 1991. Cohen. Fiske. New Jersey: Prentice-Hall. and B. The Essentials of Negotiation. Calif. Gavin. D. New Jersey: Prentice-Hall.E. M.: Crisp Publications. LittleJohn. Brown. Inc. and S. K. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Prospect Heights. University of Missouri: Columbia Press.
negotiationsources. New Jersey: PrenticeHall. William. Shell. 1998.org 200 50 Practical Negotiation Tactics . B. Inc. 1994. Inc. New York: Viking Press. 1981. Cambridge.Nierenberg. Ury. G. Cambridge. Massachusetts: PON Books. Massachusetts: D. Heath and Company. The Eight Essential Steps to Conflict Resolution. 1996. Inc. 1991. New York: Penguin Putnam. Weeks. George. C. Inc. Thompson. L. Taking Charge/Managing Conflict. New York: Bantam Books. Gerald I. www. The Mind and Heart of a Negotiator. 1982. Labor Relations in a Global Economy. Howard. New York: M.E. New York: Simon and Schuster. 1999. Stulberg. Dudley. 2001. Lexington. The Art and Science of Negotiation. Upper Saddle River. Getting Past No: Negotiating with Difficult People. Howard. R. Bargaining for Advantage. Tsogas. Sharpe. J. Raiffa. Raiffa. Massachusetts: Harvard University Press. 1987. Lectures on Negotiation Analysis. The Art of Negotiating.
organizational behavior. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. and served as President of the Board and Mayor Pro-tem for three terms. which is located in the greater Cincinnati area. During his academic career he has received awards for both outstanding research and teaching. and negotiations. Personnel Journal. 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 . Human Resource Management.D. Books published by Dr. Carrell is Dean of the College of Business at Northern Kentucky University. Dr. Carrell are in the fields of collective bargaining and labor relations. Personnel. and MBA and B. M Christina Heavrin J. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. Business Forum. and the University of Louisville. HR Magazine. in Economics from the University of Louisville. In addition. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. The University of Nebraska-Omaha. The Academy of Management Review. Labor Law Journal. The Personnel Administrator. Organizational Behavior and Human Performance. he was elected to the City of Louisville Board of Aldermen for five terms.ABOUT THE AUTHORS ichael R. Morehead State University. He received his doctorate from the University of Kentucky. Carrell has held academic positions at California State University. The Journal of Accountancy Training. and Public Personnel Management. Marshall University. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. Bakersfield. In addition to negotiating numerous litigation settlements and contracts.A.
Jefferson County. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. an agreement between the State of Kentucky. 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. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 202 50 Practical Negotiation Tactics .park and a successful industrial park in the City’s enterprise zone. the City and a for-profit hospital for guaranteed indigent health care services for city residents.
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