SECTION I: INTRODUCTION

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

Introduction

1

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.

2

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

Introduction

3

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

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

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

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

This page intentionally left blank .

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

Examples: • an item sold by one party and bought by the other • wage increases won by one side. or even skipped altogether. The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book. the other side loses.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. Depending on the situation and the parties involved. rearranged. What one side gains. 10 50 Practical Negotiation Tactics . stages can be combined. The Comprehensive Model Negotiation is more of an art than a science. but feel free to try them when they seem most appropriate to your specific circumstance.

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

This page intentionally left blank

SECTION III: 50 TACTICS FOR SUCCESS

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

I

Preparation

13

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.

14

50 Practical Negotiation Tactics

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

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

Preparation

15

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

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

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

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

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

Mother: Hush. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah.) Let’s take all our Beanie Babies to my house to trade! Okay.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. and so on. and go play somewhere! Cybil: Well … Okay. Cybil. (Think of the showroom tactics used by car dealers. Make up your minds. it’s a deal. I like the frog. the frog is everybody’s favorite. they have the information they need at their fingertips. Bailey: Cybil: Preparation 21 . girls. 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.Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site. too. 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. such as a hotel conference room. (thirty minutes later) Bailey: So. they control the breaks and environmental factors.

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

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

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

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

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

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

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

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

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

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

This page intentionally left blank .

For example. Identify all outside influences and hidden agendas before you develop your strategy. Be sure you are aware of this at the beginning. or one-time-only. such as Tactic #19 (Make a First and Best Offer). After you have evaluated these factors. such as a third-party negotiator. A neutral. decide whether the negotiations should be continuous. Before you can do this. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. Are there any outside people who might influence the process.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. such as actively trying to keep one of the two parties from winning a contract or influencing a colleague or spouse to accept an offer for personal reasons. Tactic #33 (Bluff). and Tactic #48 (Walk Away). such as a buyer and a seller or a city and its union. a third party can serve as a mediator (a legislative body. as it can substantially alter the negotiations between two primary parties. for example. cooperative manner. Tactic #43 (Nickel and Diming). The overall strategy chosen does not limit the use of other tactics. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). Third parties sometimes have their own hidden agendas. as well as their bargaining history and financial and political positions. if you want to begin in a friendly. might step in and help settle negotiations between a union and administration negotiators. 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 favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . If you prefer to take a firm and direct approach. uncaring approach (Tactic #9: Control Your Emotions. Some of the tactics listed in this book are only suitable for single-session negotiations. you must first evaluate your needs and those of your opponent. but in practice it will likely influence the whole process. In some cases. Tactic #12: Find Common Interests can be helpful.

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

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

We’re curious. the buyer took it as a signal that either Carol didn’t want to sell. were still alive. we are certainly interested in your request to “buy” our firm name to use in your city. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. and then $10.000 immediately. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city.Buyer: What if we offered you $100. When Carol refused to budge. Example 2 The law firm of Bits & Bites was a Sioux City institution.000. The partners are interested in selling the name. The other law firm was prepared to pay $100. the founders of the firm. or she has unreal expectations. Inquiries to other law firms were not very helpful because in almost all of the instances. 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. In any event. as to how you think the name is going to benefit you. 36 50 Practical Negotiation Tactics . Neither Edward Bits nor Edmund Bites. enjoying a statewide reputation for quality representation. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.000? Carol: We really can’t take less than $160. Carol drove off a potential buyer by setting an asking price that was just too high. Here’s how the initial negotiations went: Partners: Well.000 offer by coming down in price at least a little. but they have no idea what the value of their firm’s name might be in this nearby city. though.

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

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

Peggy. and I know how you take care of things. Andy: I want them… Paula: Go ahead and take them. Andy: No.200! We should get $1. (bad guy) and implies that his or her side will hold firm on their demands. Example 1 So. so I’ll take it. Peggy: Planning a Strategy 39 . Half what it cost us new. Andy and Paula: Yes. while another acts difficult. 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. since they are sitting out in the driveway with it. Andy and Paula. I can use them. only three years ago. I’ll go home and you can call me if you two can reach an agreement. not for $1.400 if the catcher and can are included. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. threatening. we won’t need it at the new condo. Peggy: That’s fair. Paula: Go ahead and ride it home. Peggy: I’m hearing one thing from Paula and another from Andy. And take the leaf-catcher attachment and the gas can. you’re really moving! I hate to see you leave.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. angry. I don’t know what the deal is now. Andy: No. They cost about $300. Peggy: I assumed they went with the mower. what’s your price? Andy: $1. Peggy: So.200. I want to keep those. etc.

firm offer if they decided to continue negotiations. your account has taken too much time. Sandy: What? First of all. Miguel: Well. Sandy. we’ve been fairly happy with your responsiveness. Miguel: But not at this ridiculous rate. 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. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). And we need to add a clause that holds your company responsible for machine damages. Liz: But we still want to renew your contract.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. causing our reps to spend hours on the road.000 in service calls last year alone because your damn people don’t take care of the equipment. perhaps even unintentionally. your rate of $3. Let’s talk. 40 50 Practical Negotiation Tactics . You are located outside our primary service area. For the past three years. and your training programs. Miguel: I’ve figured $4. She realized that it put her in an impossible negotiating position. And cut the training hours from 55 to 20.000 per month is one of the highest in town. we’re here to negotiate a new service agreement. Sandy. And we want to change the 24-hour service response time to 48 hours. the quality of the technicians’ work.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down.

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

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

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

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

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

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

a well-known negotiations professor from Harvard University. Planning a Strategy 47 . with the highest bidder paying the amount to the other side in compensation for their loss. The first party decides on a price for which he or she will either buy or sell the object to the second party. you’re the oldest. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. the executor of the estate. I’ll give you 48 hours to decide the price. However. 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. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). and split the proceeds. A fourth option. The second party then decides to either buy it at that price and pay the first party. (two days later) Mary Anne: Well.” is the recommendation of Howard Raiffa. so you set a price at which you agree to buy or sell the coffee grinder. Both sisters covet it. with winner taking all. All the rest of the estate has been divided among the family. Then Susan. since this one is in perfect shape and it was Mother’s.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. I’m willing to pay or let it go for $800. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. Mike. called the “Reciprocal Buy-Sell Offer. Susan. Mike: Mary Anne. 3) They can agree to sell the object to a third party. 2) They can flip a coin.

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

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

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

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

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

to 3:00 p. We really want you to go back to your original times. Now that her children are in college. so that your customers can park on the street. We realized that if we cut the cake lengthwise.m. I helped with the bags without being asked twice. your new shop hours have caused your customers to park in our parking spaces. and I really like white cake. Conclusion Once the boys realized that they had a common interest—not letting the cake get thrown away—they were able to negotiate a solution both of them could live with.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice.m. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. she got a visit from some of the residents. and keeps it open longer so she can attract customers on their way to and from work. This cake is white cake. I can have the part with the icing and Bill can have the part with the cake and filling. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. and her children were in school. Residents: Marilyn. It was the type of shop the nearby residents preferred. because there is no parking along the street during morning and evening rush hours. she opens her shop at 7:30 a. Marilyn originally set her shop’s hours for 10:00 a.m. so these hours worked out well. The last cake we had was chocolate cake. and better than a fast-food restaurant with late-night hours and a drive-through window. and that’s not my favorite either. Customers have started to park in nearby apartment lots. Planning a Strategy 53 . That sounds like a wonderful solution. One day.

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

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

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

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

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

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

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

500) Resistance Point ($25. 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. Exchanging Initial Offers 61 .000 Buyer Initial Offer ($21. 2: Distributive Bargaining Process.500) M $21. 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. such as proposing to continue at the current rate or price. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. 190–192. 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.500) Fig.750) Target Point ($24. Adapted from Labor Relations and Collective Bargaining. (2004). quick agreement.000) Target Point ($23. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. as illustrated in the following figure: Seller Resistance Point ($22.750–$25. The negotiator firmly states that it is their best offer in an attempt to gain a nice. Carrell and Christina Heavrin. by Michael R.000) Settlement Range ($22.000 22 23 24 25 26 27 Initial Offer $28. This is a practical starting point that will not anger the other side (and might even be expected). Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). None is as important as the first one. Another common strategy is to start with the status quo. for example. “Distributive” bargaining (“win-lose” or “zero sum”) is used.

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

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

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

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

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

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

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

no it’s not. 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.. Hobbs successfully chose color as a throwaway item. All three employees must agree to the schedule. Conclusion Mr. and seniority will be used to determine who gets to choose the first day. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. The days in question are: Exchanging Initial Offers 69 . 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. Employees will be paid time-and-a half for each of these days. The manager was convinced enough to sacrifice a final $100 for the throwaway. Then we have a deal.. 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 . 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. I’ll take the red one for $100 less.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

at minimum cost. They found one they both like that lists for $325..e. Sue: Let’s offer $325. never give them their asking price. of course. Their realtor told them that it sold for $290. and you cannot withdraw it in good faith. Jay: No. then $320. which can be very useful). Jay: No.000. because you have settled quickly. thus requiring greater concessions on both sides. and that two similar ones on the same street sold for $330. The sellers must be willing to come down a few thousand … Sue: Well. or 3) Make an unrealistic offer (i.000—what they paid for it.000. but you feel cursed because you gave away too much. That’s a fair price.000.000 three years ago).” (You have won a settlement. such as last year’s price. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. The other party will probably come back with an equally ridiculous offer. particularly if you don’t know the other party’s “settlement range. and houses in this area sell fast.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.000 for a house that sold for $185. 2) Start out with an old number.000 and $337. Let’s low-ball them and offer $290. 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. offer $150.) To prevent this from happening. before someone else does. is the most (or least) the other side will accept. Avoid giving away too much at the outset. 86 50 Practical Negotiation Tactics . think things through before you make or accept the first offer. We don’t know how anxious they are to sell or if they know the market.000 two years ago. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure.000 this year.” The perfect first offer.

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. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Both parties felt that they made a good deal. then let them make a counteroffer. they had offered $325. (the next day …) Jay: They made us a counteroffer of $307. as requested by the human resource director. That’s an insult! Jay: Well. If. the company president. Give us your lowest price. (Bob and Frank meet privately to discuss the situation. They outlined how they would develop a new employee performance-appraisal system. was very impressed with their presentation.000.000 total. as Sue had first suggested. Exchanging Initial Offers 87 .000. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. The buyers were very motivated to sell. and the offer was based on fact: the prior negotiated price. but who knows what they are planning on offering. the sellers obviously would have accepted and Jay and Sue.000 for each of us—$6. Sue: Then you do it.500—half the difference! Sue: Great.Sue: Don’t be crazy. Lyle Foxworthy. Frank: Me too.) Bob: I’d do it for $3. I can’t tell our realtor $290. realizing they offered too much.

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

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

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

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

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

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

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

I’ll trade your sidewalk and trees for my whirlpool bath.000 $1.000 $3. Making Counteroffers (The “Give and Take”) 95 . $750 for lighting and $750 in the bank.500 $500 $1.000! Brooks: Good.000 $2. These are all permanent immediate needs.500 left. I’d like to spend some of it on lighting upgrades. We have $1.# 1 Sod Item Cost $1.500 $2.500 $5.200 $200–$2. Can we split it evenly? Brooks: Okay.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. Maureen: No.000 $500 $1. that makes sense. and we both get things we want. which I’d like to keep in the bank.000 $5. which takes another $3.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

112

50 Practical Negotiation Tactics

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

Making Counteroffers (The “Give and Take”)

113

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

114

50 Practical Negotiation Tactics

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

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

Making Counteroffers (The “Give and Take”)

115

Amber resisted the chore she hated. Roberto: But I need to start the direct mail and newspaper ads within two weeks. I have three hours. but I will cut your staff by one part-time person (or $15. Roberto: But it will never generate enough interest if no one knows about it.000 for advertising. or C. but I will cut your travel budget out completely. Felipe: Sorry. but no TV or anything until it’s done! (pause) Okay. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . she chose the one she most preferred. I can accept B. or we lose a whole year. keeping her Saturday free. Felipe: Well. I’ll do it now. Roberto: Well.Amber: row before your basketball game. Conclusion At first. Example 2 Roberto: I can’t properly advertise this new program with a $5. But when her mother laid out the schedule and gave her alternatives. (long pause) Felipe: Let me give you three options: A.000.000 for advertising.000 budget! I need at least $20. Use the $5. I’ll find a way to do without one part-time person. but the company president does not share your optimism on this program. B.000). I’ll approve $15. I can’t help. Three. I’ll approve $15. that is enough time. Felipe: (Roberto’s supervisor) Sorry. Take it or leave it. Clean it after your game. I’m not going back to him again to discuss this program. and clean it.000 in the budget.

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

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

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

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

In the end. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. and the agreement was renewed with no new provisions. Making Counteroffers (The “Give and Take”) 121 .represents have to worry that her desire to switch governments might taint the negotiations. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. 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. Mayor’s representative: Well. Conclusion By remaining silent. He either had to end the session or figure out what to say to reengage the other side. the Town Council representative’s position prevailed. I don’t know what her reaction will be. I’ll go back and tell Madame Mayor your position. I hate not to attempt to add some additional areas to the agreement. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. 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. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. Example 1 Madeline bought an old farmhouse outside of a small town. in a small clearing. which an upstream neighbor had built. the brook and rock barrier are on my property. The reason I built it was so that I could protect my patio. had redirected the brook further into her property. and began to renovate it as a home and a pottery shop. or we will be at an impasse. 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.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. Having an iron-clad demand probably won’t give you enough room to reach an agreement. As was sometimes the case in these parts. Joe. after the gazebo had been there for about five months. “I have to have this. The property came with three acres of forest alongside a meandering brook. I have a problem. You will have to remove the rock barrier. you should always enter the talks with a good idea of what you are willing to agree to. It calls for compromise. She discovered that a rock barrier. Madeline built a gazebo about 500 yards from the brook. She traced the brook back along its course to see why and where it had changed its path. One day. The brook 122 50 Practical Negotiation Tactics .” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. when one of you might say. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. Madeline: Hi. Madeline. she noticed that the brook came within 100 yards of it. the brook was the property line separating her property from a neighboring farm. Obviously. Neighbor: Well.

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

the company can make your pensions much better. Over the last five years.000. that would be the minimum increase. However. With long-term planning and investments. This is just a cash-flow problem that your members have to understand. 124 50 Practical Negotiation Tactics . and the premiums for health care just keep going up. As best as we can tell. If we invest the $200. dependent coverage could cost us $1. Pilots: Look. we know that health insurance premiums might skyrocket.000. Everyone was afraid that the dispute would cause an impasse and a possible strike.000 a year over the next five years? Company: Yes.000. and we know that with this new contract term of five years.000. The airline industry is in a slump. The pilots want dependent coverage paid for by the company. But only a few of our people are close to retirement age. The company wants to trade paying for dependent coverage for better pension benefits.000. Company: This could not come at a worst time for us.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000 (which we reasonably should have expected to pay in premiums) in the pension account now. then the pension benefits overall will increase by $10. you are taking a risk on the costs increasing. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. as it has always been.000 to cover the premiums for dependent coverage. This would be a better benefit in the long run. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. Over the next five years. And we cannot afford that $1.000 figure. with all wage and operations issues resolved fairly early. what they really need is for you to cover the costs of dependent coverage.000. The projections for the next five years were that these costs would increase to about $1.000. the airline paid a total of $200. and are willing to keep pension benefits the same.

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

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

you can get the Disney channel for only $5. with your car and $6. do you want Disney? Yes. down payment. But my neighbor pays $39. Once the buyer volunteered that $300 was an affordable “slice. I can afford $6. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.” she had him—she worked around the $300 slices.00 per month.00 per month for your service. I can’t afford that much. Sure.000 down.99 per month.00 per month. and added the trade-in. but let me see the numbers.” She decided to cut the $45. Instead of a three-year lease. Saleswoman: Simple. it will be a five-year lease. You can do that. can’t you? Buyer: Yes. do you want HBO? How much? $5. (looks at the numbers) That looks good. Making Counteroffers (The “Give and Take”) 127 .000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. as promised. Great! So. I can’t discuss another client’s account. but what else must I buy? Only the basic service for $8.000 price into “slices” the buyer thought reasonable.Buyer: I don’t see how you can do that. and payout slices to reach the total price she wanted. Let’s see.

we had that before. and probably felt much better about the total negotiated package because it was presented in modest individual slices. but he agreed to six “salami slices” for a total of $38.99 per month. But that’s all! Then we’ll hook you up on Monday. and my wife wants the old movies. Great. they asked about the Cartoon Network. 2.00 per month. I really want the sports channels. and SI 1. Disney is for the kids! The sports channels are for me.00 per month was far too much.00. 2? How much? $8. That’s another $5. That’s $5. 3. Thanks. Any other kids’ channels? Yes. 128 50 Practical Negotiation Tactics . The total is $38.00 a month. Conclusion The owner thought his neighbor’s service at $39. instead of one total amount. Yeah.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.00! Why? Because he judged the per-slice price to be reasonable. Okay. What about the music package? Yes.

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

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

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

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

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

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

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

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

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

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

Applying Pressure

137

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

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

138

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

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

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

Applying Pressure

139

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

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

140

50 Practical Negotiation Tactics

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

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

Tell Susie to let me have it. Andrea. We’ve got a long ride ahead of us.Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. and Susie.) Applying Pressure 143 . About an hour into the drive. Consider making a suggestion or a proposal that completely surprises your opponent. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Their dad tried to reason with them. Mom said so. I took it out of the box. (In a few minutes. and here’s how the “negotiations” went: Dad: You two stop fighting. the girls had been fussy. you have it when we drive home. the argument is over the doll’s shoes. Why? A sudden surprise can disrupt the dynamics of a negotiation. Just share the doll. you have it this part of the trip. and Susie hid them under the seat. and I can’t stand it. I can’t drive if you keep this up. Just because you saw it first doesn’t make it yours. The doll can be shared. This time. Susie: Okay. You’re driving me nuts. Susie: The doll belongs to both of us. Andrea: Okay. the little girls began to fight over the doll. Andrea: The doll is mine. the fighting starts up again. Example 1 A father and his two daughters were on their way to visit the grandparents. Almost from the beginning of the three-hour drive.) Dad: Stop it right now. Andrea had taken them off the doll. but use this tactic judiciously. (Their dad pulls to the side of the road and turns to face them in the back seat. because you will probably only get to use it once.

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

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

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

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

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

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

Cory:

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

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

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

150

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!

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

Applying Pressure

151

This page intentionally left blank

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

M

Making Progress

153

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

wouldn’t you like to go outside first? After you swing for a while or play ball. The owner decided to try for a variance. C. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. and they still had time to color.: Julie: Hey. the parking lot will start to look trashy. According to the city’s zoning laws. C. We don’t want to go outside. The owner and a small group of neighbors met to talk about these problems. 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. When his variance application was made public. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. They did all the compromising they were willing to do. Conclusion The children stayed inside and played dress-up. and teenagers attracted by Making Progress 155 . or apply for a variance. Mr. you can come back in and play “Prince and Princess. the owner had to supply additional parking.” No.Mr. failed to offer the children something that was as important as the plans they had made. neighbors became concerned about the changes to the mall. however. 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. Example 2 The owner of a small strip mall in the heart of a residential neighborhood was planning to add a small movie theater to the other businesses in the mall. The existing parking lot didn’t meet the current parking standards for that size theater. We want to play dress-up and then color.

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

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

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

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

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

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

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

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

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

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

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. Archie chose the parcel with the three lakefront lots.Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots.

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

” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan.important item. so be prepared to withdraw the nickel and dime item at the hint of trouble. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. 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. If one party misjudges the situation. it can be a dealbreaker. In one case. This experienced bargainer said. we’ll agree to Health Plan A with another ½ cent on the pension fund. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. 168 50 Practical Negotiation Tactics . At the end of negotiations. “Okay.

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

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

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

This offer is for more money than any four-bedroom houses on this neighborhood list. We love your house.000. but the key is to gather facts that you might need—not just the facts that you will need. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. but you’ve priced it way too high. Sometimes. I’ll get back to you.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . and $237. Sam Jones. $229.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.500. Here’s a list of the five that are about the same size as yours. but the right facts presented at the right time can chill or astound and completely turn things around. 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 sold for: $225. $235. but we feel that it’s a fair offer.000.000. The owner.000. and we are countering with an offer of $250. They believe it is overpriced.000 under the listing price! We realize that. the other party will ignore or refuse to believe the information. (Next day) We’ve reviewed the records you’ve produced. $237. has owned the house for 24 years and is downsizing to a condo. What? That’s $35.000. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.

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

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

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

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

this tactic can produce an agreement. or even months after the first offer is presented. 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). hours. this process can easily result in a final settlement. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. 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. days. When two parties believe they have an oral agreement. and the classic Walk Away (Tactic #48). 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. In this process. If friends or neighbors need to settle something but prefer to avoid the negotiation process.Stage 7: Reaching Agreement he final stage! It might come minutes. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. and the child learns an important lesson about life. When multiple issues are at stake and most have been agreed upon during negotiations. T Reaching Agreement 177 . If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. 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. They bring it out when a dispute arises.

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

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

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

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

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

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

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

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

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

and while Bill and Paulette had been using an agent to help locate houses. We’d like to make you an offer of $150.000. Obviously. everyone is busy grappling with the details of the negotiations.000. all the usual stuff in a sale. 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. Seller: We’re asking $152.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: 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. however. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. Bill: Reaching Agreement 187 . we won’t be involving our real estate agent. 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. They saw the “For Sale” and “Open House” signs. If we shake hands on it right now. and one of the other couples looked very interested. During a discussion. At the very least. and decided to stop by to see if they liked the house. they looked at this particular house on their own. They were not the only couple to come to the open house. Example 1 Bill and Paulette had been house-hunting for some time. not the furniture. Seller: Yes. Bill and Paulette fell in love with the house. Bill pulled the seller aside. They finally looked at a house they really liked. The owners were selling the house without a real estate agent.

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

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

It was made clear that the employer had paid the additional $100. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. There was a confidentiality agreement.000 when all that was asked for was $100.000 just to get the employee to “withdraw” the complaint. I’ll take your offer back to her and let you know. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. to his disadvantage. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. 190 50 Practical Negotiation Tactics .000 and the conditions of the offer.000.She: authorized to pay $200.000. but word did get out that a public agency paid $200. Monica accepted the $200.

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

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

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

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

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

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

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

This page intentionally left blank .

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

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

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

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

Sign up to vote on this title
UsefulNot useful