This action might not be possible to undo. Are you sure you want to continue?
SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
few people understand that normal interactions represent bargaining opportunities. such as these: • You receive the wrong order at a restaurant. with neighbors. But if you scored 8 or less. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. they pay the sticker price. Instead. 4 50 Practical Negotiation Tactics . but many of us miss the opportunity to bargain in other situations. 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. exactly. practical tactics useful in real-life situations at work or at home. at a flea market. Who. 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. • A co-worker asks for volunteers for a new project. with family members. • A child wants a new toy now. some will in retrospect even remember being the victim of one or two of them. or engage in an unproductive argument. accept what is given. Unfortunately. Most readers will no doubt recognize some of these strategies.negotiator! Pass this book on to someone else who needs it. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job.
Flexibility. Both sides want a settlement. A teenager wants to buy his/her first car. The parties involved are interested in reaching a common goal. since you lost my reservation. Therefore. There must be a conflict in the sense that what one wants is not what the other wants. “Well. or items of value. A friend is about to select the movie he/she wants everyone else to see. A service repair person gives you an estimate on some work. 5.” When you recognize that something can be negotiated. For example. and I don’t have time to wait for another. 4.• • • • • • • A hotel clerk tells you that your reservation was lost. There are flexible elements to the situation. The parties involved can make a decision by themselves. Multiple parties. 3. perhaps you can say to a hotel clerk. A neighbor wants to remove an old tree on your property line. The parties are interdependent: what one party does affects the other. In some circumstances. Your spouse wants to buy new furniture. What are my alternatives?” During an employee evaluation. and each side can involve one person or several people (each representing one “side” of the issue). that can be negotiated. perhaps the employee can say. “I’d like Introduction 5 . one party is only allowed to follow policy or must wait “until the manager arrives. Mutual goals. you must advise the other party of your intention to negotiate. such as price. time. 2. condition. In some situations. some resolution must be negotiated. Each one has the five key characteristics necessary for bargaining: 1. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. All of these situations are opportunities to negotiate. Interdependency. Your boss reviews your past year’s performance. Two or more sides are involved. Decision-making ability. be prepared to bargain.
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. 6 50 Practical Negotiation Tactics . Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. the facts. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. and meet with you again. negotiations can be concluded with a written or oral agreement. the parties and their interests. and the tactics that might move the negotiations along. Keep this book handy when preparing for any type of negotiation. the other party will realize that you intend to negotiate and do not accept the situation.” To a neighbor you can say. but I believe it adds value to our house. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated.time to look over this performance review and respond point-by-point. Once a settlement is reached. “I see why you want to cut down the tree.
In the past. or child. Yes No Self-Assessment Quiz 1. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . As a parent. do you believe that you negotiated the best possible deal? 4. In the past. but you did not? 8. have you ever felt that you were not adequately prepared to negotiate a job offer? 2.? 10. did you request appropriate compensation? 6. do you routinely negotiate a last add-on before you close the deal? 9. Do you routinely negotiate for better accommodations when you check into a hotel? 3. or division of household duties. spouse. Do you wish you could negotiate a change in your job duties or salary? 7. allowance. etc. have you ever required a written agreement covering chores. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. When you purchased your last home or car. When making a major purchase.How good are your negotiation skills? Place a check in the box that applies to you. The last time you received sub-par service or food in a restaurant.
This page intentionally left blank .
decide how complicated the issue is. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. The Negotiation Process 9 . the process will be fairly straightforward. one for another. They’re referred to as “win-win” because each side can achieve their goal. thus allowing each side to achieve one of their goals. the process will probably take several weeks or months as the parties move through all the stages. state. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal).) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. Examples: • office location (city. If it is a relatively informal situation.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. On the other hand. including those that are less obvious. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. The “Quick Model” approach outlined below is good for simple negotiations. etc.
the other side loses.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. stages can be combined. What one side gains. 10 50 Practical Negotiation Tactics . Depending on the situation and the parties involved. rearranged. but feel free to try them when they seem most appropriate to your specific circumstance. 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. Examples: • an item sold by one party and bought by the other • wage increases won by one side. The Comprehensive Model Negotiation is more of an art than a science. or even skipped altogether.
The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Information. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .
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:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
was a power play. The union negotiators convinced the employees that this too. and it now employs 230 craftsmen. The $56 million dollar business took them 30 years to grow. as Harvey had for many years. The Jaggers gave the union their “last. best. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. They learned that their assets would be easy to sell and were worth more than originally estimated. The owners. When negotiations with the union became hopeless. With only two weeks remaining before a threatened strike. but rather what the buyer planned to do with the car. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. his BATNA was not to hold out for more money. and equipment. providing them with a very good income for life. In this case. For the past two months. notified all the employees of their intentions. Conclusion Selling their business was the Jaggers’ BATNA.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. 16 50 Practical Negotiation Tactics . The threatened strike became a reality. The union is demanding wage and benefit increases. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled.” which was refused. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. The union negotiators thought the Jaggers were bluffing. the Jaggers decided to seek buyers for their land. selling became an attractive alternative to a strike or prolonged battle. inventory. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. as a last resort. and final offer.
Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. 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. I’ll have to think about that. How much are you thinking it’s worth? John: Well. Example 1 Tom had always admired John’s 1861 Confederate rifle. Tom: $20. you know. I’ve been thinking of getting rid of it for a while. Gosh. right? John: Sure. This is a good thing to know. I guess I couldn’t take less than $20. because if the company does not provide relocation benefits. What changed your mind about getting rid of it? It is still in perfect condition.000? That’s more than I planned. Are you finally ready to sell it? Yes. for example.000. it’s still perfect. It is extremely rare—one of only 100 made with that bore and handle. Preparation 17 . what the other party’s desired outcome is. and told John several times to let him know if he ever wanted to get rid of it. John: Tom: John: Tom: Tom. If you are the party making the offer on the house. Just as important is the why. John assured Tom that this would never happen. You have an advantage and are in a position to produce a better agreement if you understand what motivates your opponent and what “hidden” interests lie behind their position. so Tom was surprised when John called him out of the blue one day with a proposal. at some point. she might have to take a lower offer just to be able to move. A person who has to sell her home because her company is relocating her. I think so. it’s to your advantage to know what is behind a seller’s decision to put it on the market. sure. you still interested in my rifle? Of course. Make me an offer. Just running out of space.
let me think about it and I’ll get back to you. we really want to buy your company. He is two years away from retiring and does not want his business to fail before he does. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. we 18 50 Practical Negotiation Tactics . Well. fearing that this will put all of his employees out of work. it made the negotiations easier. I’ve been thinking about your offer. Conclusion Tom entered into the negotiations suspicious of John’s motives. parties to a negotiation are not likely to reach agreement.Tom: Okay. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. Rick needs to remain president of the company for the next two years. but then he will be happy to retire. BigManu: Rick. Was Tom interested? Tom declined. and we’re committed to keeping it open as a major division of our company.500—we’d have a deal. John: Well.500 had an 1861 for sale. but thought this might explain John’s sudden interest in selling the rifle. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. When Tom found out why John decided to sell his rifle. Example 2 Rick. let’s do it. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. However. I don’t think I can go higher than $18. The sale price for the company has not yet been agreed to. Tom: Okay.) Tom: John. but I could get the money to you right away. and now the two-year requirement has become a stumbling block in the negotiations. has begun negotiations to sell his firm to BigManu Company. Tom now felt comfortable negotiating the price. if you could come up a little—say $18. No longer worried about John’s motives. the owner of a small manufacturing company.000. Without some trust.
and we think it’s an odd request anyway. 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. Let’s talk later. Within the parameters of efficiency and effectiveness. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. and I hired every one of these people. I need to give them some sense of comfort if this deal goes through. Rick: I built this business from the ground up. BigManu: We just don’t see a way to give you what you want on this. Preparation 19 . (Between negotiating sessions. The price they gave Rick was actually more than he had expected. my employees will prove to you that they are uniquely able to run this place. Without this commitment. BigManu: You know we want you to stay on and manage this division for us. let’s talk about the job guarantee you wanted. they decided to put their price on the table and revisit the issue after a price was agreed upon. We still can’t find a way to do it. Rick: These people are the best at what they do. Working as a division of your company.cannot guarantee to you that ALL of your employees will be retained for two years. We just can’t make good operational decisions with our hands tied. I just can’t go through with this sale.) BigManu: Okay. I just want them to have a real chance to show you how good they are. In hopes of pushing the deal forward. You’ll be in place to participate in our employment decisions. I just don’t want it to change after I’m gone. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you.
I certainly want to do all I can until then to protect my people. but we won’t be completely tied to operations as they are now. Rich almost lost the deal. I’m hoping to retire in two years. Rick: Well. This wouldn’t have anything to do with your own plans for the future.BigManu: We intend for you to stay and become a big part of our company. Conclusion By masking his real objective (giving himself two more years as president before retiring). would it? Rick: Well. to tell you the truth. that might work. 20 50 Practical Negotiation Tactics . BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Surely you’ll be able to “protect” your people if they are as good as you say. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. you’ll have a guaranteed “in” to protect your people. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. Let me get back to you.
) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. 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.) Let’s take all our Beanie Babies to my house to trade! Okay. Bailey: Cybil: Preparation 21 . but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. Make up your minds. too. (Think of the showroom tactics used by car dealers. 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. and go play somewhere! Cybil: Well … Okay. they control the breaks and environmental factors. Mother: Hush. girls. I like the frog. and so on. (thirty minutes later) Bailey: So. they have the information they need at their fingertips. Cybil. it’s a deal. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. the frog is everybody’s favorite.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.
while members of Team B were able to stay fresh. After forty hours of negotiating. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. in their own familiar setting. non-stop negotiations wore down the members of Team A. around the clock. although only ten years old. as long as they met in the boardroom of Team B. That’s why she wanted to go to her house. Team B had clearly used its home turf to gain a substantial advantage. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. and other conveniences in the adjoining room. having set up beds. Both sides desperately needed to settle a property dispute. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. not one member of Team A was chosen to return to the table. Team A agreed to change the meeting place. Team A was whipped physically and emotionally. The physical and emotional demands of 24-hour. The firm deadline was only four days away. meals.Conclusion Bailey.” The chief negotiator for Team B agreed. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. Team A agreed to a settlement almost identical to the one rejected days before. When negotiations resumed in two months over another piece of property. 22 50 Practical Negotiation Tactics . About thirty-six hours later. was still going strong. They were blamed for accepting the same deal that had been rejected only days earlier. Team B. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. until we have a settlement.
Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. This uncomfortable negotiation followed: Larry: Will. Larry: Well. Believe me. If they tell us that they either Preparation 23 . Larry was thrilled. It was twice as high as the estimates Larry received from other plumbers before they started the project. Will: Larry. I did get some estimates from plumbers. but was shocked at the amount of the bill. After all. you are likely to resent them for it and hold out.” This can hold up an agreement and cost you in the end. Larry: Just make sure you’re comparing apples to apples. Larry had expected to pay him for his time. and show them the actual work that got done. I would have charged anyone else much more. When we got into it. it became clear that all of those pipes had to be pulled and new ones put in. and they were much lower than this. Let’s get the guys back in who gave you estimates. and he and Larry have always gotten along. I anticipated much less work. I was kind of surprised at how high it was. Things turned sour. about your bill. though. based on objective criteria (think property appraisals in real estate). these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. If you think that the other party knows more than you do. rather than give them the “advantage. I gave you my “family” rate. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. Will is a licensed plumber. Larry: But Will. when Will presented Larry with his bill. When you first told me about your project.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.
The estimates would have been higher than what cousin Will charged. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. Conclusion When the other plumbers looked at the work.disagree on the need for that work or that they would have done it for less. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . and decided to bring the matter up at a Board meeting. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. I certainly didn’t mean to offend you. she had been investing the college’s endowment funds for many years. Had they actually prepared bids on the work. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. he used his financial expertise to analyze the investments of the college’s endowment fund. Budget Officer: I don’t know what your problem is. while she wasn’t an expert. 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. From a look at the portfolio. and no one had ever questioned her performance. because (as Will pointed out) it wasn’t an apples-to-apples comparison. they had to agree that their early estimates were low. The college’s budget officer was understandably offended. Larry: That sounds fair. I’ll revise my bill to meet the lowest estimate you get. they would have had to revise the figures. Example 2 After Stuart was appointed to the college’s Board of Trustees. Comparing the estimates to Will’s actual costs would have been counterproductive. He was disappointed in the performance of the fund. they said.
because she did not have the background in investments necessary to trust such advice.were stale. 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. the college is a private institution. and its resources are limited. I have a suggestion. but I think they more than offset the gains. I find that a more aggressive investment strategy produces a better return. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. there might be increased risk and some expenses for commissions. As you know. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. Stuart: Yes. Why don’t we ask two investment advisors who have some alumni ties to the college to do a mock investment of the endowment fund for a month or two? We won’t tell them about each other and they won’t actually do any real trades. but some of these stocks have really lost their value. Stuart: No problem. then you and I can talk about changing our investment strategy. Budget Officer: Yes. Preparation 25 . In this situation. considering commissions and all. but we can ask them to plan and cost out each move. At the end of two months. Okay? Budget Officer: Okay. but such a strategy also increases risk and costs more money to administer. Now. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. but I want to be involved in the discussions with them about what we’re asking. I don’t question that they were sound at one time. I don’t want you directing how they’re going to go. if both of them demonstrate a similar strategy and produce better results after expenses.
I need more money for clothes and CDs. your little sisters will want equal treatment. (3) more chores. 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. not on what you want to spend. Mother: But your allowance is based on what you earn in your weekly chores. (2) a later curfew. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. Mother: That’s a large increase—and we just raised it last year! Shari: Well. has asked her mother for a $10/week increase in her allowance. if I give you an increase. It will cost me more than $10—about $35 per week. baby-sit your sisters. wash the cars. and ask the other party to add to the list. cut the grass. Once you both agree on the list of things to be negotiated. not just an allowance increase! There is: (1) a $10 increase. Shari: I’m four years older than the next-oldest. This strategy can build trust in the negotiation process itself. Shari: Well. Example 1 Shari. and for going out with my friends. what else can I do. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . You can’t treat me the same! Mother: Well—so we’re talking about several issues. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. a sixteen-year-old who lives with her parents and three younger sisters.
if you agree to our proposals on item #3 (the paid vacation schedule). Then a “win-win” solution could be determined. Now we have a package deal to propose … Preparation 27 . item #11 (the clothing allowance). Management agrees. but unlike your sisters. The union’s chief negotiator. since all of their items were included as requested. Now it is time for each side to list their desired outcome for each item. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). opens by proposing the list of items. you get to stay out an hour later that night. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. while the mother won a Saturday house-cleaning and a night out each week. while your Dad and I go out. which the other children would have requested as well.Shari: Right! Mother: So … I suggest no allowance increase. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. was avoided. in the first session. An allowance increase. And if you clean the whole house on Saturday. The trading of items (where initial demands are discussed and agreed upon) begins. I’ll pay you $10 to babysit every Wednesday night. and item #23 (the wellness program voucher). Shari got the $10 she wanted and a later curfew.
28 50 Practical Negotiation Tactics . thus removing them from the discussion table. Then negotiations can resume on the remaining 43 items. other trade-offs are proposed and agreed to until only a few items remain.Conclusion In most labor negotiations. the two sides will at this point sign and date the list of proposed items.
Would you possibly be interested in selling it? No. my name is Bob Hillard. $12. and do your homework. I love this car—restored it myself. he saw an elderly man get in his dream car and drive away.Tactic 6: Timing Is Everything The exact month. Bob made it a point about once a month to go out of his way and drive by the man’s house. Prepare carefully. That’s a generous offer. as he left the supermarket. Bob followed the man home. I live a few blocks from here. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. time of day. day.000? No. he noticed a FOR SALE sign in the yard. Not even for. It was nice meeting you. 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. One day. One day. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. on Briarwood Road. He stopped and knocked on the door. just out of curiosity. (For the next three years. say. thanks. which turned out to be only a few blocks from his own house.) Preparation 29 . but money doesn’t mean anything to me at this point in my life … Well. and general circumstances under which negotiations take place can substantially impact the outcome. As the man got out of his car.
the proposal would die at midnight.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. (after a careful inspection) It’s a very nice car! I’ll give you $12. December 31st.000. had issued a deadline of December 31st. A majority was needed to pass the partnership agreement. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. to seal the agreement at the courthouse? Sure. The board members had met twice before.m. for tax reasons.m. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. so I guess I will be selling it. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. as a matter of fact. resulted in another 6-6 30 50 Practical Negotiation Tactics . Then it’s a deal? Yes. beyond which the project would have to be abandoned. that’s a fair price. A third vote at 3:00 p. Conclusion While Bob did not achieve his goal during his first negotiation effort. Can you come back on Monday at 10:00 a. The partner organization. I can’t take it with me. and I promise to take good care of it. if a seventh vote could not be found by the pro-agreement side. Can I see it? Sure. Follow me. Well. Example 2 It was Sunday. I’ll see you on Monday. I’m moving to California to live with my daughter. and the vote was a 6-6 tie each time.
the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. When the meeting resumed at 4:00 p.deadlock.. and it worked. and the meeting was adjourned. The measure passed 6–5 at 5:45 p.m.. Preparation 31 . A member of the pro-project group quickly called for a vote after the leader gave a signal. Then.. For weeks. in the end.. 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. during an hour break in the meeting. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage.m. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. Both sides caucused: The leaders on each side met to negotiate a compromise. the project had been stalled by 6–6 votes. At 5:30 p. a member of the anti-project group left the room. He planned for it accordingly.m. timing was everything.m. That effort failed. as predicted.
This page intentionally left blank .
and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. but in practice it will likely influence the whole process. 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 . or one-time-only. might step in and help settle negotiations between a union and administration negotiators. as it can substantially alter the negotiations between two primary parties. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. decide whether the negotiations should be continuous. such as actively trying to keep one of the two parties from winning a contract or influencing a colleague or spouse to accept an offer for personal reasons. Some of the tactics listed in this book are only suitable for single-session negotiations. Tactic #12: Find Common Interests can be helpful. Identify all outside influences and hidden agendas before you develop your strategy. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). such as Tactic #19 (Make a First and Best Offer). a third party can serve as a mediator (a legislative body. 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. For example. if you want to begin in a friendly. uncaring approach (Tactic #9: Control Your Emotions. In some cases. Tactic #43 (Nickel and Diming). cooperative manner. and Tactic #48 (Walk Away).Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. such as a third-party negotiator. Are there any outside people who might influence the process. If you prefer to take a firm and direct approach. Third parties sometimes have their own hidden agendas. A neutral. Before you can do this. After you have evaluated these factors. The overall strategy chosen does not limit the use of other tactics. Be sure you are aware of this at the beginning. for example. such as a buyer and a seller or a city and its union. as well as their bargaining history and financial and political positions. Tactic #33 (Bluff). you must first evaluate your needs and those of your opponent.
with “All right.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. The buyer said he wasn’t interested. but the inside was a complete turnoff. The agent explained that the seller was desperate. “Please make any offer—they are motivated!” The buyer responded. His teenage sons had “trashed” the house. half-serious. and the buyer was able to completely renovate the house and still have a great deal. The desperate owner agreed. two people on the team will be more successful because they evoke different emotions from the other side. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). For example. Weeks later. If there is a significant weakness in your position. By assuming opposing roles. I offer half the asking price. 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). let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country.” The agent took the offer to the seller. The buyer loved the location. 34 50 Practical Negotiation Tactics . the seller’s agent called the buyer about the property.
You are not likely to get more than you request.000. we think $160. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. And I don’t see a lot of difference in the neighborhood.000.000. six years ago you bought it for $60. Each time. Buyer: We really like the house. Finally. Your demand should be high enough to give you room to compromise. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. as well. 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. your request must not be so low that the other party concludes that you are not negotiating in good faith. Buyer: The air conditioning might have increased the value of the house. Carol: We really want to sell. We also think that the neighborhood has improved over the last few years. but the house has increased in value. but the redecorating is of little value. with no success. Carol: Maybe not. It’s a good neighborhood. She has had it on and off the market for the last five years. but not so high as to end the negotiations before they begin. If you consider the demand ridiculous. it is likely that your opponent will. Carol wants $160. so do not underestimate what you might be able to achieve.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. After all. Planning a Strategy 35 . However. but certainly not exceptional in any way. and just refuses to reduce it. but quite frankly. but we simply can’t take less than $160. Anyone buying the house would want to change wall colors or add new carpets. First. Be realistic. Surely there’s some flexibility in your asking price.000 is very high. one buyer shows some interest. so think this through well ahead of time. The market hasn’t gone up that much in six years.
as to how you think the name is going to benefit you. Here’s how the initial negotiations went: Partners: Well.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. and then $10. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. We’re curious. though.Buyer: What if we offered you $100. Inquiries to other law firms were not very helpful because in almost all of the instances. or she has unreal expectations. were still alive. the buyer took it as a signal that either Carol didn’t want to sell. enjoying a statewide reputation for quality representation. 36 50 Practical Negotiation Tactics .000? Carol: We really can’t take less than $160. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. In any event.000 immediately. Carol drove off a potential buyer by setting an asking price that was just too high. 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. the founders of the firm.000 offer by coming down in price at least a little. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites. The partners are interested in selling the name. Neither Edward Bits nor Edmund Bites. Example 2 The law firm of Bits & Bites was a Sioux City institution. The other law firm was prepared to pay $100. we are certainly interested in your request to “buy” our firm name to use in your city. When Carol refused to budge.000. but they have no idea what the value of their firm’s name might be in this nearby city.
Well. because you are in the state capital and your firm has handled a lot of high-profile political cases. I’m kind of embarrassed now. I really don’t feel comfortable doing that now. that you anticipate to build a very profitable law firm. that’s just our initial figure. And we. In every instance. And even though you don’t have an office in our city. then. We probably won’t be insulted. we want $500. Give us some range. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . So. I guess this is just not something we’ll be able to pursue. If at any time we feel that you have “harmed” our name. that is a very high number. (surprised) Well. you have a very solid reputation there. What number were you thinking about? Well. Thanks so much for meeting with me. we do. but we get to keep all of the money we’ve received up to that point. it would be impossible to create a new name out of the names of our key partners. one of these two attorneys carries the surname of the firm they are leaving. Let’s just pretend this didn’t happen. we reserve the right to withdraw our permission. We should assume. We weren’t really thinking about that amount of money. Using the Bits & Bites name can only enhance our profitability. expect to pay for that.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. (concerned about loosing the opportunity) Wait. because we were not even close to that number. To offer it now would be an insult. of course. and then 10% of your profits each year for as long as you use the name. Yes.000 initially. starting with the ten partners you describe.
Both parties were probably at a disadvantage. rather than negotiate. The price they were willing to pay would have indicated what the naming rights were worth. Either side could have asked for too much. 38 50 Practical Negotiation Tactics . because there was no “objective” criteria available to help them set a reasonable price.Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. In this situation. It immediately dropped the idea. Bits and Bites should have let the prospective firm make the first offer. since they had initiated the contact.
Peggy. etc. Andy and Paula. And take the leaf-catcher attachment and the gas can. (bad guy) and implies that his or her side will hold firm on their demands. you’re really moving! I hate to see you leave.200. threatening. and I know how you take care of things. I want to keep those. while another acts difficult. Peggy: That’s fair. Peggy: I assumed they went with the mower. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. not for $1. Example 1 So. Half what it cost us new. They cost about $300. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. I heard that you want to sell your riding mower. Peggy: So. Peggy: I’m hearing one thing from Paula and another from Andy. what’s your price? Andy: $1. Andy: I want them… Paula: Go ahead and take them. since they are sitting out in the driveway with it. so I’ll take it. I can use them. angry. only three years ago. we won’t need it at the new condo. I’ll go home and you can call me if you two can reach an agreement. Paula: Go ahead and ride it home. Andy and Paula: Yes.400 if the catcher and can are included. Andy: No. I don’t know what the deal is now.200! We should get $1. Peggy: Planning a Strategy 39 .Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Andy: No.
And cut the training hours from 55 to 20. 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.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Sandy: What? First of all. We estimated that it has cost us more than $50. And we want to change the 24-hour service response time to 48 hours. your account has taken too much time. perhaps even unintentionally. Sandy. She realized that it put her in an impossible negotiating position.000 per month is one of the highest in town. your rate of $3. and your training programs. Let’s talk. Liz: But we still want to renew your contract. You are located outside our primary service area. 40 50 Practical Negotiation Tactics . we’ve been fairly happy with your responsiveness. She very wisely recognized the routine and forced Andy and Paula to give her a clear.000 in service calls last year alone because your damn people don’t take care of the equipment.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. Miguel: But not at this ridiculous rate. the quality of the technicians’ work. Miguel: I’ve figured $4. Sandy. firm offer if they decided to continue negotiations. Miguel: Well. For the past three years. we’re here to negotiate a new service agreement. causing our reps to spend hours on the road.
Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. Any luck. I’ll stop back about 2:00 p. 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. I’m going on to lunch. Miguel! We’ve worked out a deal I think you can live with. even though it was far above the previous contract. If not. Liz. I hope you can meet my terms.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. these terms will put me out of business—I’m a small 20-person operation. I want to keep you as a customer. you two? Good news. Sandy. Sandy. but Miguel’s right. Planning a Strategy 41 . with a position he knew was unreasonable. Our customer base has grown. I’m afraid our relationship is over. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Sandy. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one.m. (Three hours later) I’m back.
This will put you at a distinct disadvantage from this point on. 42 50 Practical Negotiation Tactics . 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. but I recently was sold a $. He had. I have a problem with my recent bill and my billing rate. in fact. made some very good purchase decisions for his small business.00 a minute. He decided that the best approach was to act indignant when he spoke to the company representative. I noticed this. 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. It seems that the rate you are charging me on my home phone is $1. 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. and might even harden your opponent into an unfavorable position (for you or for both of you). So. such as deals on computer packages and phone services. because we have had a sick relative out of town and we used long distance a lot this past month. 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. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer.10 a minute rate at my office location. The fault was partly his because he did not stay on top of changes. How may I help you? Hello. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance.Tactic 9: Control Your Emotions Stay cool. he was very unhappy.
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. (beginning to sound irritated. But as a very good customer of yours. Had you brought this to our attention before. It hasn’t been increased at any time. of course it is not always possible to give existing customers some of the “offers” we have out. I would have known I was paying too much.I expected the bill to be higher than usual. Mike. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . we certainly would have discussed your options. and I also realize that if I had examined my bill closely. Well. I realize that that might be the rate I started paying when I first took your service over eight years ago. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. I would think you would have given me the best rate you offer new customers. how would anyone who might only have residential service even know to ask? Well. to begin now. Customer representative: Let me pull up your account. but this was quite a shock.10 per minute rate on your long-distance service. But I am able to offer you a $. I see that the rate you are being charged is the rate we offer for the type of service you have with us.
a long-time customer of your company. I would hope that you would credit my account for this better rate for past service. which should rightly be $50. He was walking a thin line. however. We certainly don’t want to lose you as a customer. I am. If you can’t get me someone to talk to. I … (interrupting and in a stern.Mike: I would imagine so. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. Mike’s willingness to show a measured “flare of temper” brought results. 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 $. The latter would not have produced the desired results. either. there’s no reason for this conversation to continue. and I want to speak to someone in authority so I can terminate my service.10 per minute. The best we can do is fix the rate for the future. strategic anger and abusive behavior. but I am very angry with Over-the-Air Company. between controlled. Wait—I’ll get my supervisor. In doing so. after all. controlled voice) I need to talk to someone who can do it immediately. (with a much angrier tone) Madam. and I should be treated with more respect! I’m sorry. but I can’t do that. But I’m looking at a $500 longdistance bill. 44 50 Practical Negotiation Tactics . don’t think this is directed at you personally. she kept Mike as a residential customer as well as a business customer.
and it’s getting old. 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. and you just can’t be too careful. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. I’ve got to have the employees with the most experience to protect this place. lesssenior employees might be at greater risk of injury because they have to handle explosives. Owner: Now. The owner told the employees that he was worried that during the overtime shifts.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. They will be putting the plant AND their fellow workers at risk by not being here. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. and that they should be asking for a fairer base wage for the work they do for you. On those overtime shifts. 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. 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. that’s just not fair. and it’s not what we’re even talking about. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. they would become dissatisfied with their pay and want their base pay increased. Where are your managers? Where is the training necessary to make Planning a Strategy 45 .
but not all? Conclusion The owner was on shaky ground with this one. Either they are properly protected. don’t be so hasty. or they’re not. either the employees are properly trained. In practice. 46 50 Practical Negotiation Tactics . Then you can’t have it both ways.) Now. But the fireworks business is a business that involves risk. You are not addressing the real issue for you: money. not at all. the negotiator would have had to find a way back into the negotiations without losing ground. sit down. though. All I’m saying is that the most-senior employees have to be on the overtime shifts. I’m not coming back. now. Had the owner let him leave. Sit down. most of them continued to take all the overtime they could get. No one who takes a job with us can be unaware of that. But we protect our people. (He begins to walk out. he became more reasonable. That’s all. The negotiator was also running a risk with his flare of temper. Until you’re ready to talk about that. After the employees’ negotiator threatened to walk out.Owner: Negotiator: Owner: Negotiator: Owner: sure these employees can protect themselves? Are you telling me that your employees are being put in dangerous conditions without adequate training and safeguards? No. or they’re not. The safety of the plant demands it! (standing up to leave) This is just ridiculous. The end result was that the most-senior employees did win the right to refuse overtime. What if we were to agree that the senior employees could refuse half of the overtime offered to them.
my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. 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. A fourth option. 3) They can agree to sell the object to a third party. However. Mike: Mary Anne. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). with the highest bidder paying the amount to the other side in compensation for their loss. (two days later) Mary Anne: Well. Susan. a well-known negotiations professor from Harvard University. All the rest of the estate has been divided among the family. Both sisters covet it. so you set a price at which you agree to buy or sell the coffee grinder.” is the recommendation of Howard Raiffa. and split the proceeds. Planning a Strategy 47 . The first party decides on a price for which he or she will either buy or sell the object to the second party. Mike. Then Susan. called the “Reciprocal Buy-Sell Offer. the executor of the estate.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. since this one is in perfect shape and it was Mother’s. with winner taking all. you’re the oldest. I’ll give you 48 hours to decide the price. I’m willing to pay or let it go for $800. 2) They can flip a coin. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. The second party then decides to either buy it at that price and pay the first party.
Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. and then decide how much more “emotional value” it held. (sixty days later) 48 50 Practical Negotiation Tactics . Both came to Raiffa to help negotiate a settlement. You will both agree. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. in writing. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. I’ll pick it up tonight.” Howard: Since in this case you are talking about a multi-million-dollar business. Lectures on Negotiation Analysis. Two business partners had been working together for ten years to build a successful business. Here is my check for $800.Susan: Mike: Well. They thus were able to determine the highest price each was willing to pay for it or receive for it. After I open the bids. Thanks for making this last step as easy as possible. Both sisters felt that the process enabled them to resolve the issue fairly. 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. to submit a sealed offer to buy/sell the business sixty days from today. They accepted his suggestion to use the “reciprocal buy-sell strategy. which will bind us to the outcome. I choose to buy it. I suggest a slight modification to the process.
Howard: Abe: Bobby: Abe. but only if they could become the sole owner. Abe. and to close within ninety days. you agree to sell your half-interest to Bobby for $180 million. your bid is $190 million. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. and both men had carefully estimated the market value of half the business. your bid is $170 million. and we close by July 1st. And I will arrange financing to pay you $180 million to become sole owner. Conclusion Both parties wanted to keep the business. I will arrange to sell him my half-interest for $180 million. Bobby. Bobby was willing to pay more than Abe to remain sole owner. Planning a Strategy 49 . Agreed. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay.
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. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. Looking at these statistics. This approach can also be reversed: The wife in this situation is a banker. and the husband felt like he saved them hundreds of dollars.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. 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. When it came to comfort. It can also work in reverse: establishing the other person as the expert. he decided upon a strategy: First establish himself as the “dimension expert. she glanced at it and immediately deferred to his opinion. This strategy worked. The husband found the dimensions of the couches in the brochures and Web sites. and forcing him or her to control the discussion of the issue. 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. Example 1 A young couple were discussing a possible purchase of new furniture for their living room.” and then argue for the frugal alternative. the one that was the most expensive was superior. Based on seating capacity. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . They both expressed an interest in finding a couch that offered the most “interior” space. the one he wanted (one of the least-expensive) was superior. When he showed his wife the detailed spreadsheet. Conclusion The husband became the “expert” in this situation by doing the homework.
Preferred Provider Organizations (PPOs). and should therefore handle the problem.investment decision or deal with an error in a bill. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . he argues that she is the expert. you gain an edge when negotiating a new plan for your company. and Point of Service (POS) plans. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert.” If you spend many hours learning about Health Maintenance Organizations (HMOs).
she decided to try something different. I also took out the garbage last week without being asked twice. and neither boy was very happy. They immediately began to fight over it. This time. point them out at the very beginning of negotiations and refer to them throughout the process. particularly when things seem to be at a standstill. Unless you can convince me otherwise. she made them share whatever it was. because I am so conscientious about my paper route. That simply rewards your continual squabbling. Usually. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. you want to reach an agreement that is favorable to an outside party. The two boys fought over the last piece of everything. Be clear on what you have in common at the start. here’s what they said to her: I think I should be rewarded with the piece of cake. These positive things are part of your goals and objectives. 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. If this was chocolate icing. like we usually have. you both want to complete negotiations by a certain date. Russ: 52 50 Practical Negotiation Tactics . they saw that there was one piece of cake left over from their mom’s bridge party. and I really love the banana/butternut/ sour cream frosting on this cake. I missed dessert the other night because I had to get to baseball practice. the last piece of cake will get thrown away. neither of you want to be embarrassed at the outcome. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. Example 1 When Russ and Bill got home from school. and so on. and their mother was tired of it. I wouldn’t care so much. When they boys returned. and then asked their mom for a chance to negotiate with each other.
she got a visit from some of the residents. and that’s not my favorite either. 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.m. It was the type of shop the nearby residents preferred. This cake is white cake. so these hours worked out well. your new shop hours have caused your customers to park in our parking spaces. That sounds like a wonderful solution. Now that her children are in college.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. Marilyn originally set her shop’s hours for 10:00 a. We realized that if we cut the cake lengthwise.m. Planning a Strategy 53 . Residents: Marilyn. 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.m. I helped with the bags without being asked twice. because there is no parking along the street during morning and evening rush hours. and keeps it open longer so she can attract customers on their way to and from work. so that your customers can park on the street. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. Customers have started to park in nearby apartment lots. The last cake we had was chocolate cake. I can have the part with the icing and Bill can have the part with the cake and filling. We really want you to go back to your original times. and I really like white cake. she opens her shop at 7:30 a. and better than a fast-food restaurant with late-night hours and a drive-through window. and her children were in school. to 3:00 p. One day.
And we don’t think you want your customers’ cars towed. 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..? Residents: We certainly want you to stay in business here. Okay. Most of our residents are gone by 8:00 a. I really need that extra income to stay in business. and between 4:00 p.m. let’s see what the options are.00 a.m. and I close at 4:00 p.. Do you? Marilyn: No. The parking lot used for apartment residents is probably full from 7:30– 9. rather than after work. if I go ahead and open the shop at 7:30 a.m.m. The shared parking arrangement did work out for Marilyn.m. and 9:00 a.m. 54 50 Practical Negotiation Tactics . So. Between 7:30 a. We think they’ll be agreeable to the morning parking.m. Lets try it. and the residents needed Marilyn’s shop. the off-street lots probably won’t be used by my customers. But in order to keep my new customers. 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. Marilyn: Conclusion Marilyn needed the extra parking. my customers can’t park on the street.m. I have to convince them to come before work. It is very costly to have cars towed.m. and 6:00 p.. and is probably empty in the afternoon if they haven’t gotten home yet. and 9:00 a.I’m sorry this is happening. I don’t think that would be very good for business. and usually the car is gone by the time a tow truck shows up anyway. Identifying their shared interests caused the nearby residents and the customers to reach agreement. if residents haven’t left for work yet. we have to be willing to tow the cars that violate it. But I really am increasing my sales by being open longer hours. If you need to have the shop open more hours. then we’ll try and accommodate you. and see if it works. or so anyway.m.
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. we can each take turns selecting things … Like each tool or dish. That will take days! I haven’t been in this house for twelve years. Then we can sit down at this table at 3:00 p. the first. Well. We just don’t have the time … We’ve got to do this—the house is sold! Okay. A deadline can help you make the best possible agreement in the shortest amount of time. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. How can I do that? You all live in this town and you know this house.m. and start choosing things. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests). Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. Well. A few hours? I can’t—I’ve got to leave shortly for the drive home. But at Planning a Strategy 55 . I don’t. let’s all take a few hours to look around. let’s all take two hours to look around and make a list of things we might want. how should we go about dividing up the furniture and possessions? I can’t talk about it. Example 1 Four adult children have gathered at the home of their recently deceased mother. 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. etc.
we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. Okay. And besides. we all leave. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. 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 .Sue: Mary: Jenny: 5:00 p. this is December 29. David: I understand your concern. Sue. Example 2 Allan: As the negotiating team for the city. However. All of us must come back before Saturday to take what is ours—agreed? Okay. can sell or give away what is left. if I cannot carry a negotiated and signed deal to my board by noon on December 31. 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. being the oldest. your attorneys know the tax laws. Allan: Let me confer with the city attorneys. and I appreciate your interest in the historic structure. if we are not finished. December 31. Agreed..m.
and I don’t like it.Allan: (One hour later. Planning a Strategy 57 . Conclusion Knowing the external deadline gave David a significant negotiating edge.) I understand the December 31 deadline. we can’t get the reports we wanted in 48 hours. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Let’s continue. Obviously.
as well as those of the other side. but remember that both sides have weaknesses. as well as strengths. The objective is to negotiate from a position of strength. but I have a problem in my Spanish class. and we used it a couple of times. One day mine disappeared. while watching TV. and you can neutralize its effect on the negotiations. I’ll give you money for it. Jason: Mom. don’t get mad. and this usually means having all the right information. but his grades are good. and one of the ways to do that is to reveal a weakness at the beginning. Unfortunately. I’ll need to buy it again. Now. Did you buy it? Jason: Yes. But don’t lose it again. He decided to preempt the discussion in order to make the best deal. There will be times during a negotiation when you will want to catch your opponent off-guard. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. I bought the second one. and Jason knows he is getting a D in Spanish. Mom: All right.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. so he was able to prevail upon her to let him continue. but that was actually a different workbook. Mom: I gave you money to buy a workbook a few weeks ago. first-quarter grades are coming out at the end of the week. we need to talk. He knows that a D will mean that he will have to change the way he studies. His mother disapproves of his study habits. Then the teacher went back to the first one. before your opponent tries to catch you off-guard. and I missed some assignments. 58 50 Practical Negotiation Tactics . Control the use of the information. We had one at the beginning of the semester that we were using pretty often. Have a clear goal in mind AND all the information you need to make your points. Mom: What’s that? Jason: A few weeks ago I lost my workbook.
Mom: Well. I’ll give you more time. I’m sorry.(maybe C+). 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. I don’t think you’re taking your schoolwork seriously enough. And I know I have to be better about getting in all of my assignments. Although his Spanish grade was only a C+. he was able to continue to study the way he wanted to. If I don’t pull the D up to a C or better. Thanks. and the D is directly related to my losing the book. all right. His explanation made sense.Jason: Another thing. The work I did turn in was fine. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. The location was ideal for a convenience store or a fast-food restaurant. I think I can do that. but I think you do need to change your study habits. or borderline B. But that Spanish grade needs to come up to a B!! Jason: Okay. she trusted it more. Jason: Spanish is just one class. and since he offered her the information up front. It’s because I didn’t have the book. so there’s no reason to think I need to change my study habits. Obviously. Mom. my study habits are okay. All of my other classes are A. but all three deals Planning a Strategy 59 . Example 2 Jane once owned a piece of property she wanted very much to sell. then I’ll agree to make changes. Environmental Science. Conclusion All of Jason’s grades did improve over the next quarter. Jason’s decision to warn his Mom ahead of time rather than have her see the D on his report card gave him an advantage in the negotiations about study time. Its owners found out that at least three other buyers had been in contact with Jane. B. And those are hard classes—Algebra. English. Mom: Well. Pizza Boy was interested and had even made inquiries about the property.
Actually. When she contacts you. Pizza Boy: Well. I’m very happy you’re interested in my property.had fallen through. When the neighbor heard about the new buyer. They decided not to fight a disgruntled neighbor. we’re not interested in neighborhood fights. What are her grounds for complaining? Jane: She doesn’t have any. Pizza Boy: Well. really. there were no unpleasant surprises to stop the deal. and was able to politely ignore her. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. The real problem. Pizza Boy: We’ve checked the property out. she will want you to think it’s the whole neighborhood. the other interested buyers already have businesses in the neighborhood. I know. let’s assume that you are right. This is how the negotiations went: Jane: Pizza Boy. 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. 60 50 Practical Negotiation Tactics . Pizza Boy was prepared for her call. however. I’m sure. though. she started her campaign to keep them from closing the deal. A tentative deal was signed. Jane: Oh. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. either. however. 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. What are you asking for the property? Conclusion Jane told them her asking price. and it’s zoned for commercial use. which was way below the price they were actually willing to pay. since they were well aware of the negatives. Furthermore. But unlike your company. it’s only the neighbor to the right of the property who has a problem. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant.
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. such as proposing to continue at the current rate or price. 2: Distributive Bargaining Process. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party.000) Target Point ($23.500) Fig. This is a practical starting point that will not anger the other side (and might even be expected).000 Buyer Initial Offer ($21. The negotiator firmly states that it is their best offer in an attempt to gain a nice. Another common strategy is to start with the status quo. Exchanging Initial Offers 61 . by Michael R.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. as illustrated in the following figure: Seller Resistance Point ($22. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. “Distributive” bargaining (“win-lose” or “zero sum”) is used. Adapted from Labor Relations and Collective Bargaining.500) M $21. None is as important as the first one.750–$25. (2004). for example. 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.500) Resistance Point ($25.750) Target Point ($24. Carrell and Christina Heavrin.000 22 23 24 25 26 27 Initial Offer $28. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). 190–192. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.000) Settlement Range ($22. quick agreement.
In the example.” but the settlement price. these points have set the outer limits. 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.In this example. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. the process quickly narrows to the range between the initial offers. thus producing a true “win-win” negotiation. A target point is the desired settlement value a party has set as a goal when negotiations begin.000. 62 50 Practical Negotiation Tactics . 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). After initial offers are exchanged. it is termed the settlement point – not the “right price” or “fair price. usually. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. and is the range in which most negotiations actually occur. 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). each initial offer ($21. the other side does not agree to this value). 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.000 and $28.000) is reasonable. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). When the two parties agree to a price within the range. thus starting out on a positive note. See Tactic #18: Agree on Something As Soon As You Can. The settlement range is the distance between the resistance points. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. if the buyer’s initial offer was $25.
m. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. We don’t want it to be a late evening. 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. Example 1 Shelly’s “Sweet Sixteen” party was coming up. If the negotiations have suddenly gone in an unanticipated direction. There are many ways to use this strategy.–10:00 p. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. the negotiations got out of hand when Shelly’s dad forgot what had been decided. We’ll just have chips and soda. without revealing their ideas to the other side. If the negotiations are heated. A caucus gives you an opportunity to work out problems with your own team in private. 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 we’ll have the party from 7:00 p. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . If negotiations seem stalled. 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.m. Unfortunately. because it might disturb the neighbors. and presumably had an agreement. You can invite up to 20 of your friends.Tactic 15: Caucus If you are part of a negotiating team. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. If the team is feeling pressure to concede on certain items. Shelly. make use of the opportunity to call for a caucus. Mom: We’re planning on having your party here on Saturday night. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. or if a member takes on a role in the negotiations that has not been assigned to them. and I already have 25 names. so her parents sat down with their daughter to discuss the details.
And they can’t go home at 10:00 p. I think the band would be fine. And midnight is definitely too late.m. Time out! Dad. Your dad and I already talked about this and agreed that 20 guests would be the limit.” They would never expect a party to end before midnight. I’m sure we can ask them to tone it down a little. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. That would be great! It would keep everyone entertained. we’ll call you when we’re ready. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . (excited) That would be so cool. I guess the VFW will work. alone. It’s special!!! Well. Actually. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. We could play records and you guys could dance. We’ll get a band—everyone does. (with some irritation) I’m not sure. Dad. That sounds like too many for here at the house. Mom! This is my “Sweet Sixteen” party. okay. Oh. In fact.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. we could rent the VFW hall. (During the caucus. we need to talk. and then the number of kids won’t matter. I think we can handle a few more kids—how about 35? And midnight sounds okay.—that’s so “baby. Shelly. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. Jerry from down the street is in a really good band that all of the crowd likes.
Agreed. When they called Shelly back in. That’s so lame. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided.m. but your dad and I agree on getting a DJ to play. and we will need to approve the list.m. can’t we? No band. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. But we can have the band. please!! 11:00 p. All right. and not a huge production. we’re going to rent the VFW hall. Does that mean no presents. Your mom and I agree—11:00 p. we will be better able to chaperone. is for little kids!! No. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . but no Sweet Sixteen birthday party decorations. her mom presented the revised proposal. Dad. and you can invite more friends. causing them to lose control and make compromises they hadn’t intended to make.) Okay. to 11:00 p. Okay. midnight. sorry.m. And we’re serving chips and sodas. this mom-and-dad negotiating team became unglued during the negotiations. But you are limited to 40. Example 2 The contract negotiations between the company and the union had been going on for days. That way. A DJ? I guess that’s okay. but we’ll schedule the party for 8:00 p. too? No way!! I want presents!! Conclusion In spite of their prior planning.m.
The union’s lead negotiator misunderstood the proposal. it’s a good proposal. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. and the following conversation occurred. Tuition in place of health insurances? They’ll think I’ve lost my mind. The company’s negotiator didn’t recognize the misunderstanding. 66 50 Practical Negotiation Tactics . many will want to use it for their children’s education. The tuition benefits will encourage the workers to be prepared for new job opportunities. Union: (angrily) I’m not presenting this proposal to my people. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey.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. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. 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. A lot of employees have spouses who can get health insurance coverage through their work. Union negotiator #2: Please—just a moment outside. What is this. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. With the cost of college educations so high.
and the parties were able to complete their negotiations. I thought that the contract would cover one or the other for everyone. I think that what you’re proposing is a really good idea. we’ll be back in 5 minutes. let’s move on. and I apologize for explaining it poorly. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. the parties returned to the room. Negotiator #1 regained his footing. (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. Exchanging Initial Offers 67 .) I’m sorry. Now. Good.Union: Union: Company: Okay.
Salesman: Well. but … Salesman: But what? Hobbs: Well.” Throwaway items are those things that hold little or no value to you. Here’s how it works: Party A exchanges the item for something of true value. according to the Consumer Reports listing of the cost of the vehicle. so be sure you present them in a way that suggests importance. At a point late in the negotiations. A has gained something of true value and given up nothing he values in return. Example 1 The buyer. you don’t want your opponent to know what these things are. I can go to another dealer and get a green exterior—the color I like best. 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. I’ll go get him. But for this price. but he makes a mental note to use color as a “throwaway” item. this conversation takes place: Hobbs: Yes. Salesman: Let me talk to my manager. according to my figures. when the two sides are only a few dollars apart. but in reality. He doesn’t really care about the color of the new vehicle. Hobbs. not revealing that the item exchanged is a “throwaway. Mr. and noticed that none of the vehicles have a green exterior. However. we’ve got expenses and we need to make some profit. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . you are making $200 profit over the true dealer’s cost.” Party B thinks that A has sacrificed one important objective to gain another. It is a useful tactic in any negotiations.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. quickly checked the dealer’s inventory of sport utility vehicles in stock. it’s a great car and a fair deal. I know. Hobbs: Yes.
Hobbs successfully chose color as a throwaway item. and seniority will be used to determine who gets to choose the first day. Then we have a deal. Miguel.. At the very end of the negotiations. 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.no it’s not. I’ll take the red one for $100 less. Employees will be paid time-and-a half for each of these days. The days in question are: Exchanging Initial Offers 69 . 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 . All three employees must agree to the schedule.. Conclusion Mr. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth).. The three are sitting at a lunch table to discuss the schedule. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. 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.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. The manager was convinced enough to sacrifice a final $100 for the throwaway. Example 2 The office supervisor told the three internal sales representatives (Jenny.
January 1 Carolyn: December 24. December 26. 26. She got what she wanted by giving up something she did not value: the two other days. December 27. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. 31. 70 50 Practical Negotiation Tactics . if they let her choose the two days she will be off and the five days she will work. 30. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. This would allow Jenny and Miguel to each work only two days. December 30. and each chooses their days to work: Carolyn: December 27. but that is a secondary consideration. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. A second and third round produced the following allocation: Jenny: December 23. They all agreed to their schedules. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. January 1. January 2 None of the three are totally happy with the results. 2 Jenny: December 23. in exchange for giving up earlier choices due to seniority. 30. each made a first choice of days they will work. 26 Miguel: November 25. December 31 Miguel: November 25.November 25 (the day after Thanksgiving) December 23. She proposes to work five days. 27. She would actually prefer to work the extra days and get paid time-and-a half. 31 January 1. 2 In the first round of negotiation. They have decided to start over. 24. They agree.
Autumn and Angela. 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. they met at the house. When the girls decided it was time to talk about the estate. Anne and her sisters. along with the cash. The estate’s assets included a checking and savings account totaling $450. one might package all of the financial issues in one group and negotiate on that package as one issue. for example. can indicate that something you think is minor is really a major concern to your opponent. but I’d like to talk about the house and the furniture. and a collection of antique furniture. A reluctance to include one particular financial item with other financial issues. Example 1 When their mother died at age 82.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. the antiques. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. 300 shares of stock in a pharmaceutical company. three ways. Anne: As I see it. were faced with the task of selling the house and disposing of their mom’s personal belongings. it is often helpful to package the items in distinct groups and then deal with each package separately. and the stock and distribute the proceeds. For example. a house valued at $250. In addition. The house and much of the furniture has been in the Exchanging Initial Offers 71 .000 with no mortgage on it.000. The process of grouping items can be an educational exercise because the response to one party’s suggested packaging of items might reveal how the other party views the various items on the table. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. we need to sell the house. their mom left specific pieces of jewelry and art in the will to each of the girls. realizing that the total cost of a deal might make or break the agreement.
I’d like to talk about the art works Mom left each of us. So we agree: We’ll leave $30. it’s a magnet for vandals. In fact. Mother was born here and grew up here. Autumn: I think its awfully soon to be making these kinds of decisions. I’d really be interested in talking a trade for some of them. so I will be able to keep tabs on it. she’s free to do so. We’ll split the stock three ways. and now that we have them. If Angela wants to hold on to her stock. Soon. What would you think about agreeing today to distribute the cash and stock three ways. don’t you think? Angela: Maybe. and if we wait a couple of years.000 in the bank and distribute the remainder three ways. Angela: Now’s not a good time to sell either the stock or the house and antiques. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us. we’d get a lot more for them. but the operative word is “give. Frankly. I’d like it all to stay in the family. It’s a buyer’s market now. and use it to fix the house up? Then when we make a decision. Anne: But that means we have to continue to take care of the house and its contents. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . and letting everything else wait for another discussion. we’ll discuss again what happens to the house and the antiques. Autumn: Sounds good to me. Anne: Okay. If we want. With no one living here. Angela: I live close by. we’re really free to do with them what we want. And we’ll fix the house up.family for years.” She gave those things to us. we can sell ours. we will have a more valuable asset. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. There was a reason why she gave us what she did. Why don’t we leave some of the cash in the bank.
what kind of paid leaves there will be (personal. including benefits for partners in non-traditional relationships. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. the jewelry. vacation. but I’m making no commitment to trade. Several issues also needed to be addressed: the ability of employees to move up through the organization. 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. Angela: That’s fine. funeral. deciding whether there would be annual wage increases as well as merit increases. The second: working conditions (work schedules and promotional opportunities). Employees: We’ve got a lot of items to cover. Anne: Same with me. May I suggest that we divide the items into three areas. and the assignment of the limited number of parking spaces. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). etc. tuition benefits. sick. The following tasks needed to be a accomplished: establishing basic pay schedules.). and the art works—will be more difficult.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. and establishing a work schedule to accommodate evening and weekend clients. health benefits. The negotiations on the other items—the house. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. the antiques. The third: Ben- Exchanging Initial Offers 73 .
That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. Executive Director: Sounds like a good agenda. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. as well. Employees: Okay. I think it also makes sense to include tuition benefits in the Working Conditions category. but the parties were able to come to agreement because the wage issue had been resolved. I would include that under the Working Conditions category. we are an agency supported generally by public funding. paid leave times. 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. to be honest with you. So I’d like to see us get through the wage issues quickly and then move on. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. Let’s get started. that makes sense. but I’d change your list. tuition benefits. Also. because they’re really an incentive for better performance. and the parking spaces). so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. Wages should not include merit pay raises.efits (health insurance. Later negotiations were difficult. Executive Director: Well. the paid leave categories are pretty clearly defined. 74 50 Practical Negotiation Tactics . Conclusion The executive director’s request to move merit raises out of the Wage category and move paid leave into that category because there is little flexibility to finance those areas allowed the parties to resolve the wage issue first. Executive Director: I think it’s a good idea to group items together.
too. The discussion might become very heated. Tim worried that he would be stuck with all of the debt. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. no matter how insignificant. It was her idea to buy the house and go into debt to furnish it. are divorcing. It indicates to your opponent that you are a reasonable negotiator. Tim: You might be leaving town. because Tim felt that Kathy had taken advantage of him during the marriage. without suggesting any changes or modifications. and might not even be able to keep the house. Now. You can also make an effort to agree on something your opponent offers early in the negotiations. You signed those papers. and both have good jobs. They met and married in college. sets the stage for mutual respect and communication. after a brief marriage. with her promotion sending her out of town. Kathy’s first job paid more than Tim’s because she had a graduate degree. Their “property division” was mostly about dividing their debts. Kathy was asked by her employer to relocate to another city. The couple hoped to do the divorce without involving lawyers in order to save money. Kathy borrowed more money to go to graduate school full-time. and that you are entering into the negotiations with the intent to reach agreement. An initial agreement. and she agreed. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. 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. They had also furnished their house on credit. Example 1 Tim and Kathy. Exchanging Initial Offers 75 . They were in the middle of buying a house. rather than disposing of assets.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. They have no children.
as long as the cost was approximately the same. we would have paid down our school loans more. Kathy: Now. The monthly payments are about the same. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. ABC usually uses UPS 76 50 Practical Negotiation Tactics . Tim: Well. Example 2 ABC Company. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. 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. They also agreed that Tim wouldn’t have to pay her that amount for five years. I think it only fair that I take over repayment of all the school loans. Frankly. an art gallery. and he could pay it in annual installments over a five-year period. I can hardly argue with that. Tim: Okay. What do you want to do about them? Conclusion Having agreed to two items very quickly. I don’t intend to “stick” you with anything.Kathy: Hey.. hold on. and you got your sports car. The first thing I’d like to talk about is what we are going to do about the cars. I think that makes sense. a wholesale art dealer. I got my convertible. 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. about the house and furnishings. yes. and XYZ Co. Kathy: I suppose we should look at the school loans next. as you remember. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. Okay. When we bought them two years ago. If both of us had been working the year I went to graduate school.
The artworks filled four boxes. XYZ: ABC: Exchanging Initial Offers 77 . Unfortunately. XYZ contacted ABC immediately. or else the box was damaged in XYZ’s warehouse. XYZ’s manager failed to open the boxes or remove the artworks. and arrived on time and apparently in good condition. it was obvious that the art in one of the boxes had suffered considerable water damage. and the boxes showed no external damage.to ship artwork. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. 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. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. They arrived right before the holiday weekend began. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. but only if you let us ship it UPS. ABC’s position was that the artwork was fine when it left their location. ABC refused to pay WeCanShipArt until it received payment from XYZ. 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. There was no indication that the gallery’s electricity had gone out over the weekend. and we will continue to discuss who is liable for the three water-damaged works. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. XYZ decided to cancel the promotional sale that was to start on Wednesday. We’ll expect you to pay for the 12 works that will be in your show. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. The other times this happened. and began preparing to return all of the artwork to ABC. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. However. when the boxes were opened on Monday. ABC: Before we begin.
XYZ: Agreed. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. that’s okay with me if it’s okay with XYZ.m. they will split the cost of the three damaged pieces three ways. Now. 78 50 Practical Negotiation Tactics . They also agreed that if the investigations are not conclusive. The artwork was not damaged while in our control. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. If we don’t make the deadline. WeCanShipArt: Wait a minute. generated a like offer from WeCanShipArt and a reasonable response from XYZ. we’re ruined. Having reached an amiable solution to the immediate problem. and if word gets out that you think it was. And we’ll eat the cost of shipping. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. regardless of where the original three artworks were damaged. XYZ: Okay. at its financial risk. You can’t just ignore us. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. I can’t see how I can refuse that. ABC: Well.
we plan on selling our Ford tractor when we move. 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. period. I don’t have any idea. Ann: That sounds great! I don’t want this to affect our friendship. Okay? No quibbling. Example 1 Colleen: Ann. The “first and best” tactic enabled them to settle the matter easily. Exchanging Initial Offers 79 . You must mean what you say and be prepared to walk away from an unacceptable offer. Ann: Well. but if you’re interested. and it came with the bush hog and the leaf pick-up. We plan to put an ad in the paper next week. Ann: Thanks! We really need one. Why don’t you give me a price? Colleen: Oh. we’ll sell it to you. consider using the “First and Best” tactic. no hard feelings either way.000 for it six years ago. Jeff spends many hours mowing the yard every week. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. I don’t want to quibble. I know you and Jeff said you’d like one because you have about five acres. What do you want for it? Colleen: Well. and even more hours in the fall picking up leaves. 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.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. we paid $5.
as we agreed.Example 2 Archie: Well. Archie: Thanks. who admired the way Archie negotiated his starting salary. except salary. how about you making your first salary offer your best one. I’ll discuss it with my wife and get back to you in 48 hours. I want the job. and I’ll take 48 hours to consider it. We want you. He also started the job with a positive working relationship with Vernon. I expect a fair increase. but we have internal budget considerations and we must consider equity with other employees. I’ll get back to you in three days. Here it is. 80 50 Practical Negotiation Tactics . (three days later) Vernon: Archie. So. I don’t like negotiating over salary either. I’ll either accept it or reject it. on this slip of paper. Okay? Vernon: That sounds good. I think we have agreed to all aspects of the job offer. no questions asked. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. Conclusion Archie accepted the job offer. but I don’t want to start off in a new job by negotiating with my boss! So. and you know my current salary. I came up with the best salary offer I can make.
then the prom. First we’re going to dinner. so the prom is a pretty big deal to both of us. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. a 4:00 a. so he knew that he would have to sell them very quickly. but he figured “all night” was relative. Fourth.m. 17 years old and a junior in high school. and ignore or deny any weaknesses in it. we’re all meeting at Donna’s so we can share a limousine.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. look for indications from your opponent as to what he or she believes is their best position. you only have one Senior Prom in your life. and in a favorable light. (Once negotiations get underway.m. I’m the only junior in the crowd. Exchanging Initial Offers 81 . you know that Sally is really looking forward to this.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. you will probably have to modify some of your positions if you are to reach agreement. Kevin: Mom and Dad. and we’ve made a lot of plans with our friends that I need to talk to you about. He knew his parents would not agree to let him stay out all night.) During the posturing phase. Posturing is indeed “acting. was dating a senior. First. since Sally is going away to college next year. and then to breakfast at “Timothy’s. Second. This is called posturing—presenting your position strongly and completely.” As you know. Example 1 Kevin. we’re not going to be dating exclusively after this summer. Kevin had “negotiated” with his parents before. It might be your only opportunity to explain your position without interruption. 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. Third. Present your position and demands as if yours is the only logical position. curfew would be okay. He and his date had decided that as long as they could join their friends for breakfast after the prom. Sally’s Senior Prom is coming up.
yes. Second. the limousine will take us back to Donna’s house to spend the night. but to use that as a reason to stay overnight doesn’t make sense. of course. remember that when you started dating Sally and hanging out with an older crowd. but it should not be oversold. you have been fairly good about making your curfew—most of the time. Yes.or drug-free. for sure. From where we sit. We’ve heard that they allow kids to drink. However. And if we don’t spend the night. I think I ought to be able to stay out all night. this prom is a one-night thing—a dance that is dressier than you’re used to. Fifth.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. You make some good points. which could be dangerous. so there will be plenty of chaperoning. We are.m. I believe you can pay a little more and have the limousine bring you both home. Donna’s parents will be there. Also. I’ve never missed my curfew. So. we know. and the crowd we hang with doesn’t either. I don’t drink or do drugs. happy about your plans to use a limousine so you kids aren’t driving. Finally. we told you that we would not be changing our rules to accommodate that older group. And. 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. Sally’s parents trust us and have already said yes to her. Things can happen on a night like that that adversely affect you for the rest of your life. and we’re just not happy about that. we’ll have to get in our car and drive home very early in the morning. but because the owner’s daughter goes to Sally’s school. I know you trust me and that I’ve earned the trust. That’s asking us to believe a lot. You realize that this could be as late as 4:00 a. they will be open for the Prom crowd only. We’re just not convinced that your entire group has been alcohol. Donna’s parents are not as strict as they could be when a bunch of you are there. you and Sally need to call it a night (or really a morning). We think that after the breakfast. That’s the deal then? Okay. 82 50 Practical Negotiation Tactics .
The company approached other states to see what incentives they might offer Tencro to locate in their state. but it could easily add another 500 if it had the space on its assembly line. and a new. Example 2 Tencro Company decided to modernize and expand its business. but was disappointed to learn that they offer very few incentives. regardless of the incentives. We need to find out what you’re willing to do to keep us here. other companies have received incentives and Tencro certainly wants all it can get. Nevertheless. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. Tencro is not going to leave the state. our Exchanging Initial Offers 83 . EDO: Well. Tencro approached the state’s Economic Development Officer.m. we’d be adding at least 500 new jobs. Also. we’re of course interested in keeping you here. and it does not really need any help. With 800 employees. the state can do to help the company expand and rebuild. we are one of the largest employers in this county. if anything. The spin-off business from our operations is huge.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. but there are limited options available. Tencro has approached the state’s Office for Business Incentives to see what. The assembly plant is out-of-date. one-floor operation would be very profitable. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. because his parents could not disagree with such wellthought-out ideas. and had this conversation: Tencro: We really want to keep our company here and expand it. Tencro: Let me just remind you of what our company means to this state. but we’re getting a lot of interest from other states willing to help us relocate. It currently employs 800 people. If we can expand here.
We need a rebate on the local income taxes to help pay off the loan to build our new building. We can’t possibly give it away to other companies coming in behind them. schools. if the new location is at the local industrial park. etc. There are more residents in the state demanding more public services: road improvements. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. And. We need help in the cost of attracting and training the new 500 employees. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. and traffic signals. EDO: The state has very limited resources to pay for economic development incentives. 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.employees pump money into the economy by buying houses and cars. We do want you to expand your plant. And we’ve been offered land practically free in the neighboring state. we will need the two-lane entrance expanded to four lanes. That might involve the state building housing for them at a reduced cost and providing them with some retraining. so we’d have to have it free here. EDO: Well. Certainly. additional police. and we’ve had to divert funds from business incentive programs over to basic services. etc. 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. Also. paying taxes. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. and we are willing to offer some training dollars for the new workers. while we value your company as a long-time corporate citizen. We need certain incentives. or else it will not be cost-effective for us to stay here. now that the economy has improved..
and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. Tencro bought land in the industrial park. However. The new set-up was so profitable. EDO: Get back to us as soon as you can. Tencro: Well.agree that the road into the industrial park must be widened and a traffic light installed at our expense. the training and the new road improvements were all the incentives offered to Tencro. but for the fact that each party did its homework and was aware of the true facts. borrowed money for the new building. Tencro was able to pay off the borrowed money in half the time. Future negotiations continued. let us go back and take another look at our options. Exchanging Initial Offers 85 . Other than that. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. we’re just not in a position to offer more than that at this time. and hired 500 new employees.
Sue: Let’s offer $325. and that two similar ones on the same street sold for $330. Their realtor told them that it sold for $290. or 3) Make an unrealistic offer (i. then $320. because you have settled quickly.000 for a house that sold for $185. 86 50 Practical Negotiation Tactics . at minimum cost.000 this year. The sellers must be willing to come down a few thousand … Sue: Well. 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..000. thus requiring greater concessions on both sides. but you feel cursed because you gave away too much. Jay: No.000 three years ago). is the most (or least) the other side will accept.000 and $337.000 two years ago.e.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.” The perfect first offer. which can be very useful).” (You have won a settlement. Jay: No. and houses in this area sell fast. We don’t know how anxious they are to sell or if they know the market. That’s a fair price. 2) Start out with an old number. of course. and you cannot withdraw it in good faith. offer $150.000.) To prevent this from happening. Avoid giving away too much at the outset. such as last year’s price. think things through before you make or accept the first offer.000—what they paid for it. particularly if you don’t know the other party’s “settlement range. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. before someone else does. 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. never give them their asking price. They found one they both like that lists for $325. Let’s low-ball them and offer $290.000. The other party will probably come back with an equally ridiculous offer.
Sue: Don’t be crazy. Frank: Me too. If.000. Exchanging Initial Offers 87 . Give us your lowest price. I can’t tell our realtor $290. Lyle Foxworthy. Both parties felt that they made a good deal. the sellers obviously would have accepted and Jay and Sue. They outlined how they would develop a new employee performance-appraisal system. since they had already bought another house.000 for each of us—$6.000 total. (Bob and Frank meet privately to discuss the situation. they had offered $325. and the offer was based on fact: the prior negotiated price. as requested by the human resource director.000. as Sue had first suggested. Sue: Then you do it. was very impressed with their presentation. (the next day …) Jay: They made us a counteroffer of $307. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. 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. then let them make a counteroffer.) Bob: I’d do it for $3.500—half the difference! Sue: Great. The buyers were very motivated to sell. but who knows what they are planning on offering. realizing they offered too much. That’s an insult! Jay: Well. the company president.
000.000. and it would not apply. Bob: That’s fair. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. but we can’t pay more than $18. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. and you two come highly recommended.000) their minimum price of $6. What’s the cost? Bob: We want the job. That is all that’s left in this year’s training budget. We’ve waited long enough.) Lyle: Okay. I’m out of time. Lyle: Okay. 88 50 Practical Negotiation Tactics . but we know you must have an amount budgeted for this and we are willing to do it for that amount.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. We’ll do the job. They also ended up getting three times ($18.
seeing no common ground. Skilled negotiators such as salespeople. It has often been said that the key to negotiations is to be flexible (see Tactic #25). Expect that the “total pie” will be different from what it was at the outset. but possibly of different values to your opponent. labor negotiators. Also. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). is likely to pull away from the table. in fact. the other party. and attorneys use tried and true tactics in giving and receiving offers. do not dismiss it because it is not all you want. One or more parts might be acceptable or indicate movement from their previous positions.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. Experienced negotiators seldom reveal their exact priorities and objectives. which would most likely weaken their position (see Tactic #26: Keeping Secrets). When the other party makes an offer. carefully evaluate an opponent’s offer. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). which is often the case. T Making Counteroffers (The “Give and Take”) 89 . Instead. what appears to be an outer limit of the settlement range when the process starts can. be enlarged (see Tactic #27: Expanding the Pie). 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. and do not flatly reject it because it is not your offer. In some negotiation situations. because if you do not at least appear to be flexible. 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.
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. Option 1: No family vacation. so you can go without me. His brother Sydney. finished his freshman year of high school at the beginning of June. 19. Let’s see what we can work out. Sydney. 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. Proposing multiple ways to reach your goal can get you to the same place. Jerry pointed out that he is expected to work until July 31st. completed his first year of college and came home for the summer around the middle of May. their parents began discussing a family summer vacation. 15. Option 2: Mom and I go before Jerry leaves on August 1. Example 1 Jerry.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. We have four options. except when you’re negotiating. and quicker. Jerry had already started his summer job. while it may be your best option. gives your opponent little maneuvering room and might even prolong or damage the negotiations. In mid-June. 90 50 Practical Negotiation Tactics . Here’s the discussion that followed: Mom: Well. Jerry will be here. The week he would be home would be the first week of school for Sydney. He planned on being home for one last week before having to pack up and go back to college. it looks like we can’t really plan a vacation for all four of us. and I try to get to the South Carolina beach for a week in July? Sydney: I’m not going to the beach with my parents! I’ll just stay home. Dad. Dad: Wait a minute. I don’t want to give up on a family vacation that quickly. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. what say you. Proposing only one solution to a problem.
Joe has no say in who was hired by the corporate legal office to work in his unit. Sydney: Don’t I start school that week? I don’t want to miss school. so I won’t be able to meet up with you until Sunday. If we started the vacation on a Thursday. Mom: Well. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. 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. and one secretary in his litigation unit. and Sydney go to South Carolina before his school starts. actually. but it should work out all right. Mom? Mom: Let’s do it. Classes don’t start until Friday. one paralegal. Then Jerry joins us until Thursday. if it’s okay with Jerry. Jerry: Okay with me. By proposing numerous options. Bob. but he can discharge employees for poor performance. and Carl). Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. you have a half-day orientation on Wednesday. Jerry: My friends and I have plans through Saturday of that week. Sydney: Okay. Conclusion The goal was to have a family vacation. we meet up with him that week for vacation. when we come home. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. It’s not perfect. Andrea considers Making Counteroffers (The “Give and Take”) 91 . And I miss orientation and start school the next day? Dad: That’s an option. me.Option 3: Mom.
Her job performance was acceptable. I thought I had cleared it with you when I told you what I thought they ought to offer and you said that sounded too good to be true. To put it as bluntly as I can. Andrea. but it doesn’t solve the problem—nor is it the only problem. and I don’t see why we don’t have more independence. however. Andrea: You didn’t list moving to another unit as an option. and resents any attempt by Joe to supervise her work. 92 50 Practical Negotiation Tactics . We have a formal procedure that you just don’t like to follow. It was just a comment. Andrea: We’re hired for our expertise. Joe: That’s all well and good. Joe: Come on. you have a job-performance problem. It is to the corporation’s benefit to address that problem here and now. In the last month. The attorney for the other side has agreed to give me the additional time to file it. I really see your options as follows: You can leave the corporation. she made a two glaring errors in judgment. Andrea: Well. you know that wasn’t an okay to settle. isn’t it? But I don’t think just moving you really solves the problem.herself to be a professional. Joe: Andrea. Andrea: Wait Joe. 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. or you can work out a “supervision” agreement with me so that I can better monitor your performance. 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. we have a very big problem. let me say that I’m handling the missed deadline on the pleading. so Joe took a “hands off” approach. rather than to put it off on someone else or for some time in the future. which forced Joe to take action. Before you start. If you don’t like the way I do my job.
in fact. then it would save face for me if it comes with a move to another unit. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. It also changed her attitude about being both a professional and a team player in a corporate office. I want to stay with the firm. my goal is the same is yours: to create an environment where you can perform to your full potential. Joe: That’s fine with me. or I would advise your next supervisor to put you on a very formal approval program. Andrea: Well. If that option is okay with you. I hope we can work it out.Joe: That could be an option. but it would still require some change in the way you work: either a demotion. If you are convinced that I have to undertake an “approval” program. and propose an acceptable alternative. lets talk to Bill about the move. (Adapted from The Mind and The Heart of the Negotiator. rather than my staying here. improve her work performance. But in fairness to our mutual employer. Andrea’s move and subsequent “approval” regime did. by Leigh Thompson. the needs of the corporation have to come first. Believe it or not.) Making Counteroffers (The “Give and Take”) 93 .
They both agreed that this is the maximum they will spend on “extras” before moving in. Exchange. etc. 2) exchange items (those that can be easily traded off—one item for another item of equal value. In essence. and a home theatre. With distributive items. Example 1 Brooks and Maureen Wilson have just finished building a new home. then those which can be easily traded. 94 50 Practical Negotiation Tactics . and finally.000. then the contractor has lost $500 in revenue.) Yes. one person’s gain is another’s loss—zero-sum. Avoid assuming that you both differ on every issue (in which case you might be making unnecessary sacrifices) by first identifying items for which both sides have similar desires. This approach is an important tactic.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. three strategies are used. thus making it necessary to find a middle ground on each. Wow! We are off to a good start. Maureen: First. if a buyer negotiates a $500 reduction of a contractor’s bill.). Let’s agree to those things. For example. (She looks over the list. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. we both want the sod. Let’s see. let’s see if there are any items we both want. 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). It is used only when each side has several demands. the fencing. Brooks: Right. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. because it can speed up negotiations and produce a more desirable outcome.500. They have a fixed amount of money—$14. only those with polar-opposite interests that must be divided. that’s $9. 3) distributive items (those items for which the two parties have exactly opposite interests. These items often involve money).
000 $3. which I’d like to keep in the bank. and we both get things we want.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.000 $500 $1. Maureen: No.000 $1. which takes another $3.200 $200–$2. I’d like to spend some of it on lighting upgrades.500 $2.000 $5. Can we split it evenly? Brooks: Okay.500 left. that makes sense. I’ll trade your sidewalk and trees for my whirlpool bath. These are all permanent immediate needs.000 $2.# 1 Sod Item Cost $1. We have $1.500 $500 $1. Making Counteroffers (The “Give and Take”) 95 .000! Brooks: Good. $750 for lighting and $750 in the bank.500 $5.
Length of Contract 2. During that time. Drug-Testing Program 96 50 Practical Negotiation Tactics . Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. Wage Increase 4. This year. even in difficult years. both sides exchanged lists of initial demands at their first meeting. finally agreeing to split the difference on the remaining amount (distributive items). The combined lists total thirteen different items: Desired Outcome No. Profit-Sharing 5. management and union negotiators found that a “winwin” approach to negotiations worked well.Conclusion By taking the time to list all the items each person wanted and their cost estimates. All items to be negotiated and their desired outcome for each item were put in writing for review. Pension Increase 3. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. 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).
No Strike/No Lockout 10. Finally. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). and (#9) to continue the often-discussed no strike/no lockout provision. eleven of the thirteen original issues to be negotiated had been agreed to. Job Security 13. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). they began to trade off the exchange issues of similar value and nature. and removed from the table. Clothing Allowance Based on senior. Next. Shift Differential 11.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Next. Subcontracting 12. signed. At this point. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). They proceeded to draft the language to settle these issues.Distributive rent program co-pay Exchange Exchange 7. Paid Funeral Leave 9. Overtime Assignment 8. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10).6. Health Insurance Employees pay 20% Continue cur.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. one Making Counteroffers (The “Give and Take”) 97 . Because they held opposite positions on these issues. First. (#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.
Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. The tactic offers several advantages: First. They then identify each as compatible.side’s gain is the other’s loss. when you exchange items so that each party achieves their desired outcome on one of the two. or distributive so that the negotiations can begin in an organized manner. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. Third. 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. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. but it can be very effective when a negotiation situation involves several issues. but a middle ground was eventually found on each and negotiations ended. if both parties start from reasonable positions. Second. you can use the process to settle many of the other issues on the table. Conclusion This tactic is simple. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. when you agree on the items where both parties have similar desired outcomes. exchange. 98 50 Practical Negotiation Tactics . negotiations begin on a positive “win-win” note.
will make your opponent feel good about the process. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. Rob: Wait a minute. I’m not interested in a curfew. and refrigerator. and looks like you are belittling them. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Jasper: Finish or not. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. the location of the TV. Since they didn’t know each other well.Tactic 24: Wait to Counter As the negotiations begin. so he wants a quiet room late at night. each side is expected to put an offer on the table. do not offer a counterproposal right away. so I can study. you know. So when’s a good time? Jasper: (without hesitation) No way. Here is how the last issue was handled: Okay. This isn’t high school. Waiting a respectful amount of time to counter. they decided to establish “room rules” so that they would both be comfortable with the room assignment. 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. last item: I’d like it quiet in the room at night. and can help you reach your goal. They agreed on which part of the room each would have. It is especially important that you do two things: take your time before rejecting any offer from the other side. stereo. Rob stays busy all day and evening with other activities. and from a strategic standpoint. Rob: Making Counteroffers (The “Give and Take”) 99 . even if you aren’t going to accept their offer. Let me finish. The final issue had to do with “lights out” and quiet times for studying. Mutual respect must be part of the negotiation process. and studies late into the night.
Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. b) written complaint to a floor manager if the matter is not resolved in 5 days. the positions of non-union crew leader and floor manager would both be eliminated. The appeals procedure would have to be altered to reflect the restructuring. and d) a hearing with company owner if the matter is not resolved in 20 days. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . 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. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. Under the restructuring. The union contract required that management renegotiate this change in the grievance procedure with the union. and that’s it. Jasper: Midnight. midnight during the week is the only thing I’ll consider. is all I’ll consider. Jasper: (without taking a breath) At best.m. curfew on TV and other noise every night. 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. and the union foreman would report directly to the plant manager.) Listen. No agreement was reached. Under ABC ‘s contract with the union.m. Rob: (there is no hesitation in this voice) No. but changed his mind when he saw Jasper’s attitude. I want a 10:30 p. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. and that’s not negotiable.
he/she can take the grievance to the plant owner for a hearing. After initial pleasantries were exchanged. 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. because those management layers are gone.any objection to the change. but to dictate. We just cut out two steps. this redraft is a very simple change to the contract. Company: (no hesitating) Trust me. An aggrieved employee can make a request for a meeting with the plant manager. our grievances often signal to management that there are real problems on the shop floor. (Note: An attitude change sets in. The union was prepared to accept the plant manager’s position as final. rather than go on to appeal it to the company owner. ABC Company’s negotiator explained the management changes soon to be implemented. In fact. and I’m certain your members will be okay with it. 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: (rather abruptly) Let’s not drag this out. the employee and the foreman would meet with the plant manager and attempt to resolve it. rather than as a judge on the merits of the grievance.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . and began the negotiation session concerning the grievance procedure. no one can complain about that. If the union foreman felt that the grievance had merit. Company: Here’s the new draft of the grievance procedure. Union: Hold on. Union: You obviously didn’t come here to negotiate. We’ve got a couple of alternative models for you to consider. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. We’ve simply eliminated the first two steps. Union: As you know. If in 20 days he/she has not been satisfied. Certainly. The redraft is simple and straightforward. We’d like you to consider the plant manager’s role as a problem-solver. and everything else stays the same.
and we’ll strike if we have to. After a cooling off period. the company entertained the ideas the union had tried to propose before. the two parties did meet again. and actually accepted a three-step procedure.two-step grievance procedure instead of a four-step procedure. We’ll see you on the picket line. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. 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 . rather than in the 35 days the current system provides. This time. Union: We’re very serious. You can’t be serious.
The couple used to have Thanksgiving dinner at both families’ homes. Sue’s family (parents. and ten nieces and nephews) always ate around 5:00 p. Making Counteroffers (The “Give and Take”) 103 . and now have a new baby girl. it’s just too much to do both. established goals. Example 1 Sue and Bill have been married four years. two brothers. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Bill.m. two sisters. Arriving late at Bill’s family gathering caused him to miss the “traditional” pre-dinner pro-football game on TV (which he had grown up believing was the real reason for thanks at Thanksgiving). and identified the range of options they feel comfortable with negotiating. Bill’s family (parents. Be open minded. Nancy: Sue.m.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Even before the baby’s arrival. one sister. If you are flexible. you can adjust your demands or goals to include such new ideas. Bill’s family won. Sue: Yes. Mom says you. their spouses. Next year. the Thanksgiving marathon caused problems: They would have to leave Sue’s family’s celebration before the “traditional” after-dinner trivia games (which Sue really enjoyed). and do not dismiss something said by your opponent just because it came from the opponent. and at least five aunts and uncles) ate around 7:00 p. But after the negotiation gets started. and we’re really not able to enjoy either one. They’ve done the research. we’ll get to our side. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. four brothers. They flipped a coin to see who “got” them and the new baby this year. Sue’s sister Nancy called her to talk her into coming anyway. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation.
either. we’ll come to Mom’s. I mean. By being flexible. but then I realized that the rest of you already go to your in-laws earlier in the day. Nancy: We’d make it special by all of us being together. Nancy: If we keep the time at 5:00 p.. Nancy: I’ll let you know. When that goal looked out of reach. So that doesn’t work. Sue: Next year. I bet everyone could make it on Friday. Bill won the coin toss for this year. Thanksgiving is Thursday. 104 50 Practical Negotiation Tactics .Nancy: It just won’t be right without you guys. some people have to work on the Friday after Thanksgiving. Sue: I don’t know. There’s nothing “special” about Friday. Celebrating the next day seems odd. it’s okay with me if you can sell it to everyone else. I know that I would rather not do two Thanksgiving dinners on Thursday. I thought of asking Mom if she could move dinner up to noon or so.m. Mom’s very upset. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. 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. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. she suggested a unique alternative. but she won’t tell you. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. and it became the family’s new tradition. 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. the holiday will be over.
They are meeting with the city to ask that the land be donated by the city for the project. Kids’ Home hoped to get $500. The foundation has a substantial endowment fund. the foundation’s regular annual grants come to roughly half of their available funds.Example 2 Kids’ Home. 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 . but we need some assurance that you will be able to build and operate the orphan home at that location. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project.000 a year for operations. Foundation officals: Oh. Estimates for building a new orphan home ranged from $12–$15 million. City officals: We can probably give you the land for free. Unfortunately (for Kids’ Home). depending on the cost of the land. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. but the principal of the fund can’t be touched. Kids’ Home: As you know. Kids’ Home: That’s why we brought the foundation’s officials with us. a non-profit organization for orphaned children.5 million is available for distribution to numerous charities. we hope to break ground early next year for the new orphan home. We only have maybe $2 million a year to put toward this charity. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. City: Can’t you borrow the money from a bank to build the facility. we’re committed in theory. but we can’t fund all of the $12 or $15 million. the interest income of around $6. Each year. We need the city’s help by allowing us to get the city land donated to us (for free).
And “donations” aren’t a very safe collateral for any bank that wants to loan us money. I’ll contact the state tomorrow. We’re not familiar with that program. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. We probably would not be able to participate. We’ve never committed our funds to pay back a bank loan.Kids’ Home: Borrowing the money gets very expensive. We’re a nonprofit group. If we borrowed $15 million at 10% interest. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. We wouldn’t want to make such a commitment to a bank. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. but we’re willing to look at it. 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. it could end up costing double that amount. and really taxes our ability to raise funds. 106 50 Practical Negotiation Tactics .
The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. At the same time. However. It is perfectly acceptable to say that you are not ready to reveal certain things. Mr. Making Counteroffers (The “Give and Take”) 107 . The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. Jones: We’ve obviously gotten off on the wrong foot. and often lasted until 2:00 or 3:00 a. and asked the officers to cite the Jones kids for parking too close to a corner. the neighbors began to have problems. Example 1 Soon after the Jones family moved in next door to the Smiths. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. and trust can only be established if all parties interact truthfully. But the Jones clan had four cars altogether. Successful negotiations depend on trust. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied.m. Smith: We don’t know what you’re talking about. They asked to meet with the Smiths to talk about these disagreements. you might not want to reveal all of your priorities at first. These parties could get rather loud. The Jones family suspected that the Smiths called the police. the Smiths could count on parking their car directly in front of their house. Before the Jones family moved into the neighborhood. each side has to know generally what each other wants to accomplish.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. it is not acceptable to lie. and often took up all the space along the street in front of the two houses. The Smiths called the police to complain about a late-night party. In order for a negotiation to be successful. yet not reveal all of your goals and objectives. Mr. and we would very much like to talk about how we can resolve these issues.
we have a problem walking long distances in bad weather. In spite of the Smiths’ assurances. Smith: No. but we do know that someone has complained. At our age. Mr. we thought you might have called the police about our kids’ party and our cars.Mr. fine. Jones: We’ve already talked to the girls about the parties. Jones came to see what the problem was. Mr. we’re good now? Mr. Jones: I wish you had mentioned that the last time we talked. And the music is to be off at midnight. 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. yes. and was met with the following: Mr. Smith: Well. we would like to work out some solution. they’re hitting baseballs into our yard. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Also. since you’ve asked. they kept it. we’d like to be able to park our car in front of our house. In good weather. I guess. Is that everything now? Mr. if they are outside. Jones: Okay. Jones: Well. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. that wasn’t us. So. (A week later.) 108 50 Practical Negotiation Tactics . and not in the back yard. and they won’t be having friends over more than one night a weekend from now on. I’ll talk to the boys and we’ll make sure they play baseball in the park. Smith: You know that your boys are causing our dog. Smith: Yes. the late-night parties are a problem. Mr. Smith: Well. Mr. It is really very disturbing. And we’ll make sure none of our cars are parked in front of your house. the next time the boys were out playing and the ball came into the Smiths’ yard. Mr. Muffin. Almost every day. a lot of problems.
have labor unions. although none of the facilities outside the U. The union knows that the company is up for sale. Unless Neno can get the Union members back to work on Monday. and the deal is close to being final. Example 2 Neno Enterprises is a shipping company with extensive global operations. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Jones: Sure. You could have seen that yourself. irate) I can’t believe you people called an inspector on us. Making Counteroffers (The “Give and Take”) 109 . the British firm will walk away from the deal. you’ve said that before. You obviously don’t want to be “good neighbors.S. Neno has been negotiating the sale of its business to a British company. Smith: Well. But we didn’t call the inspector. or European companies do. 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. or the deal is off. but Neno cannot tell the union this.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. We would have fixed the tree if you had asked. the tree was clearly over the fence. Why didn’t you tell us? We can’t read what’s on your mind! Mr. Neno’s president and the Union representative met to discuss the walkout.Mr. Mr. Japanese companies often do not “recognize” labor unions the same way U.S. The British insist that a very strict confidentiality provision be part of the negotiating process. Its local headquarters has a union to handle its international shipping. because they didn’t like a grievance decision. Jones: (at the Smiths’ door. Union officials are afraid that a Japanese company might purchase it. The union laborers walked off the job on Friday.
Neno: Look. any interruption in our shipping could affect how these buyers look at our business. I’ll forget all about the strike. we don’t. Union: We think that the grievance decision affects our wages. Neno: Look. Union: What aren’t you telling me? A labor shutdown. Our guys are prepared to stay out a lot longer than Monday. so the union won’t be hurt by the buyout. And one company that is interested has a really good track record on expanding the businesses they buy. It’s not the time to have one. then there’s probably no harm done. whether it’s for one weekend or a week. 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. I’m certain that if we can sit down and talk next week. Neno: All I’m saying is that there is a difference. If everyone is back on Monday. this is a legal strike under the contract. Have the guys back on Monday. If that’s going to have a bad effect on your being able to sell the business. I promise you. Therefore. If they do come back. and if the guys are back on Monday. I think it already has. But if your guys are out past Sunday. we will resolve it to your satisfaction by the end of the day. Anyone who buys the company will have to honor the contract we have. do you? Union: No. is still a labor shutdown. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. We can’t put up with the kind of decision we got on our grievance. I know it’s not news to you that this business is up for sale. I need your guys to come back to work on Monday. You really don’t want to do that. I can’t really be more explicit than that at this time. We’ll meet with all of the parties on the grievance first thing Monday. We’ve not had a labor shutdown in 20 years. 110 50 Practical Negotiation Tactics . no harm-no foul.Neno: You know this is a wildcat strike and that it is in violation of our contract. it will impact our marketability. You don’t want to mess up our negotiations. But I have to have everyone back on Monday.
Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information.Union: It’s that important to you? Neno: Yes. I can. we’ll be back to work on Monday. Because the parties had dealt honestly with each other in the past. But I can’t. Conclusion On Monday. but the British firm will allow them to organize at their foreign locations. as well. and it’s that important to you as well. He told him that it would mean that the union would not only keep its jobs here. rather than make up reasons. Union: Okay. But I need to tell my guys that this is important to them as well. Can you assure me of that? Neno: Yes. was the right decision to make. the union was willing to trust Neno—even though he couldn’t tell them everything. while the grievance was being resolved. I would be more specific. Union: Okay. I’m going to go along with you because you’ve always dealt straight with me. If I could. the sale was finalized. Neno called the union negotiator in and briefed him on the sale. Making Counteroffers (The “Give and Take”) 111 .
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
(long pause) Felipe: Let me give you three options: A. or C. or we lose a whole year. I can accept B.Amber: row before your basketball game. and clean it. I have three hours. Roberto: But it will never generate enough interest if no one knows about it.000. but no TV or anything until it’s done! (pause) Okay. I can’t help.000 for advertising. Example 2 Roberto: I can’t properly advertise this new program with a $5. Three. Felipe: Sorry. I’m not going back to him again to discuss this program. Use the $5. I’ll find a way to do without one part-time person.000).000 for advertising. Felipe: (Roberto’s supervisor) Sorry. Clean it after your game. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . B. Amber resisted the chore she hated. that is enough time. she chose the one she most preferred. but I will cut your staff by one part-time person (or $15. I’ll approve $15. Roberto: Well. I’ll approve $15. but I will cut your travel budget out completely. But when her mother laid out the schedule and gave her alternatives.000 budget! I need at least $20. Conclusion At first. Roberto: But I need to start the direct mail and newspaper ads within two weeks. keeping her Saturday free.000 in the budget. Felipe: Well. I’ll do it now. but the company president does not share your optimism on this program. Take it or leave it.
One alternative. thus achieving his goal of not having to ask for a larger budget. would enable him to adequately promote the program.Conclusion Felipe was willing to think “outside the box. Roberto believed.” He offered Roberto three alternatives of equal cost. Making Counteroffers (The “Give and Take”) 117 . which was his goal.
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.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. and 118 50 Practical Negotiation Tactics . Here’s how the negotiations went. She was determined to hold her ground for at least a 13% pay increase and a promotion. I very much appreciated the fair job performance review you gave me. You know my commitment to this company. you are a valued employee. Unfortunately. I think you would agree with me that I have performed well above expectations this past year. I have to tell you that while I appreciate what you have done for me. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. nearing her third year with the company. If his opponent cannot agree to the demand but does not want to end the negotiations. he can make an open-ended statement. Jones: I certainly do. After a few minutes of silence. It was 16% less than she had been led to believe she would be getting. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. Example 1 Susan. Susan: I hope so. the negotiator who feels the most uncomfortable with the silence will fill the gap and most likely make a concession in order to get the other party to speak. Jones. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. 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. inviting a response. The negotiator for the other side says nothing. Susan: Mr. received a glowing report from her boss on her job performance. but one side comes back with a non-negotiable demand. This should have resulted in an automatic promotion and a sizable pay increase.
because I feel my future with the company might be at stake here. if management can see their way to giving you the pay increase now. Conclusion Mr. (says nothing) If I can’t get that pay increase approved right now. but a pay increase of that size might be more difficult. (says nothing) Or. Jones to continue to offer solutions. Susan’s silence prompted Mr. and I’m sure management will agree. maybe we can talk about the promotion later in the year. Once he acknowledged that both items might be awarded sometime in the future. and I think that I really haven’t been dealt with fairly. it could help.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. and sell it to management that way. the company’s refusal to grant them now was a harder position to support. I could probably find a way to phase it in over a two. of course I will be glad to do that. Okay? (says nothing) Let me check it out and I’ll get back to you. Promotions of this type are all but automatic around here.or three-year period. Making Counteroffers (The “Give and Take”) 119 . If there is some flexibility in your request. I must ask you to try to get both. I really want you to stay with the company. I would very much appreciate it if you could ask the company to reconsider. I suppose I could get the promotion approved with the proper presentation. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. Well.
but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. Mayor) said that she was considering running for office. but now they’ve got to ask what Madame Mayor’s motivations are. The end of the agreement coincided with the election cycle for the two towns. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. She has not decided what she’s running for. The mayor. The parties agreed to continue the previous terms of the agreement. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . Mr. Mayor’s representative: No. This is how the negotiations went: Town Council Representative: Well. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. 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. Town Council Chair). has colored these negotiations.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. her plans really don’t have any bearing on these negotiations. He decided to push for a simple renewal of the original terms. and until she does. My bosses might not have been inclined to expand the agreement anyway. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. I don’t think it’s a problem. Also. and were trying to settle on new and expanded areas when one of the elected officials (Ms. Town Council Representative: I think you’re wrong. by saying that she might run for Chair. The term of the original agreement was nearing its end. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek.
I’ll go back and tell Madame Mayor your position. the Town Council’s representative left the mayor’s representative with no room to maneuver. 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. Conclusion By remaining silent. I don’t know what her reaction will be. I hate not to attempt to add some additional areas to the agreement. Mayor’s representative: Well. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. He either had to end the session or figure out what to say to reengage the other side. In the end.represents have to worry that her desire to switch governments might taint the negotiations. the Town Council representative’s position prevailed. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. Making Counteroffers (The “Give and Take”) 121 .
she noticed that the brook came within 100 yards of it. which an upstream neighbor had built. Madeline. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. Madeline: Hi. As was sometimes the case in these parts. the brook was the property line separating her property from a neighboring farm. Example 1 Madeline bought an old farmhouse outside of a small town. after the gazebo had been there for about five months. when one of you might say.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. “I have to have this. Joe. You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. I have a problem. One day. Having an iron-clad demand probably won’t give you enough room to reach an agreement. She traced the brook back along its course to see why and where it had changed its path. the brook and rock barrier are on my property. This range for maneuvering is not the same thing as the list of items you make at the outset—it’s the last space separating you and your opponent. The property came with three acres of forest alongside a meandering brook. had redirected the brook further into her property. or we will be at an impasse. She discovered that a rock barrier. It calls for compromise.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. The brook 122 50 Practical Negotiation Tactics . The reason I built it was so that I could protect my patio. you should always enter the talks with a good idea of what you are willing to agree to. Madeline built a gazebo about 500 yards from the brook. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. and began to renovate it as a home and a pottery shop. in a small clearing. You will have to remove the rock barrier. Neighbor: Well. Obviously.
When she found out that this was not going to solve her neighbor’s problem. This will put these houses right next to me. but you’ve changed the boundary line of my property. and allow the neighbor to protect his home. Madeline: Well. She left room for a compromise. Then. Making Counteroffers (The “Give and Take”) 123 . restore her property line. Madeline was able to protect her gazebo. What if you removed the barrier for a short time. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. Madeline: But by diverting the brook. 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. It might not be necessary to make such a dramatic change. By expanding the range of options available to resolve the dispute. Also. 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. I’ve lost 400 yards of property on my three acres. what I need is to protect my property line and my gazebo. My neighbor on the adjacent farm wants to sell part of his property for a housing development. but I don’t know what I can do about it. if the brook is redirected.extended right up to my back door when the rain was heavy. she widened her range of options. which enabled her to achieve her goals. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. I can’t have the brook in my house. and return everything as it was. I understand that. Neighbor: I can do both of these things. at least I’ve maintained my property line. I won’t remove the rock barrier. Neighbor: I’m sorry. Madeline: Yes. I couldn’t have that. you have not only threatened my gazebo.
the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000. If we invest the $200. But only a few of our people are close to retirement age. we know that health insurance premiums might skyrocket. and the premiums for health care just keep going up. then the pension benefits overall will increase by $10. The airline industry is in a slump. This would be a better benefit in the long run.000.000 to cover the premiums for dependent coverage. with all wage and operations issues resolved fairly early. dependent coverage could cost us $1. Over the last five years.000. the company can make your pensions much better.000 a year over the next five years? Company: Yes. Over the next five years.000. The projections for the next five years were that these costs would increase to about $1. as it has always been.000. and are willing to keep pension benefits the same. Company: This could not come at a worst time for us. However.000. This is just a cash-flow problem that your members have to understand. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. Everyone was afraid that the dispute would cause an impasse and a possible strike. 124 50 Practical Negotiation Tactics . the airline paid a total of $200.000 (which we reasonably should have expected to pay in premiums) in the pension account now. The company wants to trade paying for dependent coverage for better pension benefits. you are taking a risk on the costs increasing. As best as we can tell. And we cannot afford that $1.000. The pilots want dependent coverage paid for by the company.000 figure. what they really need is for you to cover the costs of dependent coverage.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. With long-term planning and investments. and we know that with this new contract term of five years. Pilots: Look. that would be the minimum increase.
can we agree to a year-to-year agreement on dependent coverage. Making Counteroffers (The “Give and Take”) 125 .000 actually carried them through four years. If we can get two or even three years out of the $200. so the decision to be flexible was a good one. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. the company will not be expected to give us this benefit. The health insurance market stabilized. if they were that high. or invest in the pension plan? Company: Yes.000 available. however.000. The $200.Pilots: But you do have the $200. Company: Then it’s okay with us. The dependent coverage is more important to us now than the pension benefits. and the pilots knew what to ask for when the contract expired. that would be worth it. with a cap of $200. Company: If the company spends the $200. we are. Conclusion The company was committed to limiting its exposure to $200. The pilots expanded the range of options. then those funds will not be available to invest in the pension plan.000 to either pay one year of the premiums. by agreeing to let the company cap its exposure for dependent health coverage.000 the first year on the premiums. It initially believed that the only option was to put that money into pension benefits.000? Once the cap is met.
I recall the day you drove it out of here.000 car. what monthly payment did you have in mind? Buyer: More like $300 per month. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. If you are on the receiving end of such a tactic. I love this car. Phrases such as “for only pennies a day.” “affordable weekly payments. but that was several years ago. if I can give you this car with a $300 monthly payment.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party. be sure to add up the total cost. Buyer: Yes. Saleswoman: I’ll be right back. Example 1 Car buyer: What.… (20 minutes later) Saleswoman: So.” and “low monthly rates” are examples of the salami tactic. I just can’t imagine the monthly payment on a $45. do you want to look at something else? Buyer: No. Saleswoman: With your 740 in trade. $45. I guess it would be around $600 per month. it’s a deal? 126 50 Practical Negotiation Tactics . and compare it to your strategic objective.000 for a Volvo? I bought the one I’m driving for $19.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. Buyer: Way too much! Saleswoman: Well.500! Saleswoman: Yes.
But my neighbor pays $39. Instead of a three-year lease.00 per month. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.000 price into “slices” the buyer thought reasonable. (looks at the numbers) That looks good. it will be a five-year lease. but what else must I buy? Only the basic service for $8. Saleswoman: Simple. do you want Disney? Yes.Buyer: I don’t see how you can do that.” She decided to cut the $45. I can afford $6. can’t you? Buyer: Yes. and added the trade-in. Making Counteroffers (The “Give and Take”) 127 . Let’s see. as promised. you can get the Disney channel for only $5.00 per month. You can do that.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. I can’t discuss another client’s account.000 down. I can’t afford that much.” she had him—she worked around the $300 slices. with your car and $6. and payout slices to reach the total price she wanted. do you want HBO? How much? $5.99 per month. Great! So. Once the buyer volunteered that $300 was an affordable “slice. down payment. but let me see the numbers.00 per month for your service. Sure.
00.00! Why? Because he judged the per-slice price to be reasonable. 2? How much? $8.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Thanks. instead of one total amount. Yeah. and probably felt much better about the total negotiated package because it was presented in modest individual slices. Great. Conclusion The owner thought his neighbor’s service at $39. 128 50 Practical Negotiation Tactics .00 per month. 2. and SI 1.00 a month. they asked about the Cartoon Network.00 per month was far too much. Okay. we had that before. The total is $38. That’s $5. and my wife wants the old movies. Disney is for the kids! The sports channels are for me. but he agreed to six “salami slices” for a total of $38. I really want the sports channels. But that’s all! Then we’ll hook you up on Monday.99 per month. What about the music package? Yes. 3. Any other kids’ channels? Yes. That’s another $5.
m. Applying Pressure 129 . In some cases. pressure tactics should probably be avoided. which can be successful if the opposing team has two or more members who hold different views of an issue. but in tense. and it can destroy your credibility. the traditional car salesperson might tell the buyer. “I can only guarantee this price until 6:00 p. today. it is effective. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. but it can be used effectively when one party clearly has an edge.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. but others will walk out the door. It should be used with caution: It can end negotiations immediately. so are you ready to make a deal? This might convince a few buyers. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. and the use of humor. 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. turned off by the tactic. For example. Tactic #33 (The Bluff) is a classic pressure tactic. When both sides believe that each has equally strong positions. 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). Humor might not look like pressure. angry negotiations. however.
Abby really loves that boat. and we’ll be moving south in the next month or so. Don and Abby now use it less and less. he and Chloe wanted to buy out Don’s and Abby’s interest. getting a divorce and each moving away (and would have no more use for the sailboat). Lacey: Don. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. and they will weaken your credibility. big news! I’ve been promoted. I think Chloe and I would be willing to pay more than just the money you guys put into it. Don: Wow.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Such exaggerations are easily revealed or uncovered. The two couples used the sailboat a lot the first couple of years. boat prices have really gone up. Chloe and I would like to take the sailboat with us. Lacey: I know. I don’t know. Although I do think there ought to be some consideration for the two years you had use of the boat. Don: Absolutely. but it is not a good idea to exaggerate what you are offering or what you are giving up. in fact. Lacey and Chloe didn’t know that Don and Abby were. but Don. And we don’t want to be unfair. 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. Your opponent will consider you untrustworthy and might even be insulted by your attitude. and we need to talk to you about how we can buy you guys out. When Lacey found out that his employer was transferring him to another city farther down the coast. In the last couple of years. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. Lacey. together and separately. It 130 50 Practical Negotiation Tactics .
(After Lacey and Chloe had a chance to talk. 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. I was afraid something was going on when you all-butstopped joining us on the boat. Abby: Well. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. I’ll be glad never to see it again. Abby told Chloe about the divorce and about how she never wants to see the boat again. he likely would have found himself in a stronger negotiating position. It just reminds me of how happy Don and I used to be. the boat has depreciated. Abby: That boat. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. though it’s not so happy. Let me talk to her. and I’ll get back to you. Don: Lacey. I have big news too. We’ll be leaving here for the Midwest.is just about the most important thing we own. Lacey: Cut it out.) Lacey: Don. which you would have to share if you want to retain half-ownership. I’m sorry. Don. but separately. and we’re moving farther south. I’m surprised by your attitude. (Around the same time. I’ve been thinking. Abby is having this conversation with Chloe) Chloe: Abby. Chloe: Oh. It’s about time now for some major investment. and neither of us put much in for upkeep. I thought you understood how important this boat is to Abby. Don and I are getting a divorce. big news!! Don got his promotion. After all. Applying Pressure 131 . Lacey and Don’s negotiations changed considerably.
And as you know. the situation in the stock market is not good. Here’s how these negotiations went: Company president: Well. 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. in fact. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. the company president decided to use the stock price as a negotiating tool during the current union contract talks. 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. And while these fluctuations have little to do with the health of the company itself. our production line changes at least three times a year. I’ll be going back to them as soon as next week. in this global market. I’m telling you the stock price is having a huge impact on us already. I’ll have to show them 132 50 Practical Negotiation Tactics . Union negotiator: The stock price might be down right now. The current stock price is the lowest it has ever been. they will make their decision based on a review of the stock price that day. I read in the papers every day that the market is still strong. and that the economy is strong.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. but this has been such a crazy situation. I’ll be looking to you to make some major wage concessions on this upcoming contract. I can’t see how today’s numbers really impact the long-term profitability of this company. we will need to make drastic cuts in our operating costs just to survive.
okay. We think this company is very healthy and can withstand the temporary downturn. the union checked into the Letter of Credit transaction with some experts in banking. If you put it that way. they would do a thorough analysis and look at the health of the company over the long haul. Union negotiator: I know that’s what you told me. Company president: All right. Let’s get back together next week. but I checked it out and it’s not totally true. he lost the trust of the union. The union became hardened in its position that the employees needed wage increases in the new contract. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. and the union ended up with a substantial increase in their contract. They told union officials that it would be very rare for a bank to make its decision solely on stock price. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. Conclusion Because the company’s president over-emphasized the impact of the market on the company. Give me your proposal for wage concessions. no concessions! In fact. Applying Pressure 133 . Union negotiator: Well.that we’ve cut expenses to counter the losses in the stock market. here’s what happened. If the stock goes up next week. and I’ll have our people look at it. When negotiations resumed. we’d like to reopen talks on next year’s pay increase. the company’s position was weakened even more. So. but your proposal to cut wages is just not going to fly. When the market took a swing up during the negotiations.) Union negotiator: I’m sorry. (In the interim. let’s talk about it.
Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. She knew that if she made such a demand and threatened to leave him unless he made a commitment. I guess I’m just surprised. are you? Christy: I don’t want to be. I knew you had a class. and they really have no intentions of doing so. Poker players know all-too-well-that bluffing can be very costly. The couple had not discussed marriage. you will have lost credibility with your opponent.Tactic 33: Bluff! Bluff with caution. Example 1 Christy and Tom had been dating for about a year. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. Tom: Oh. We don’t have that much free time together. but I really am. yeah. Charlene. 134 50 Practical Negotiation Tactics . and she didn’t think Tom had. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. If you subsequently agree to begin talks again. but Christy thought the relationship was heading in that direction. This can come back to haunt you. Both of them were still in graduate school and worked full-time. it might backfire. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. I really hate it that you chose to see the movie with Charlene. Sara said she saw you at the movies with Charlene yesterday. You’re not upset about that. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. they are bluffing. so their “free” time was very limited. either. and I really wanted to see the new Lenny Bruce movie. I called Charlene and she was available. Here’s how the discussion went: Christy: Tom.
It’s made me realize that I want us to have an exclusive relationship. 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. then I’m afraid I want us to stop seeing each other. Applying Pressure 135 . I’m not “dating” anyone else. Tom: Okay. Actually. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. If Tom had “called” Christy’s bluff. if you can’t make that kind of commitment. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Conclusion Tom didn’t want to lose Christy. It really wasn’t a “date”—we just saw the same movie together. I just thought of her because I knew you weren’t available. but very little progress had been made. Tom: You’re serious? It’s that important to you? Christy: Yes. If that’s not possible. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. I won’t go out with any woman friend. He believed she was sincere. She convinced Tom that her feelings were strong. I’m willing to risk losing you. The union negotiators. she paid her own way. Since he wasn’t sure about that.Tom: She’s a friend who happens to be a girl. Christy: I just can’t see it that way. I certainly don’t want to lose you. It is. Tom: I have friends of long standing who are women. and at first he thought she might bluffing. I need to have your commitment that you won’t do that. he had to make a commitment or risk losing her. so he didn’t call her bluff.
much less today. If we’re not able to reach agreement on this.believing that Nexon would not risk a strike. Many of our union members who are working part-time hope to work full-time. Nexon: I’m just not prepared to give you one. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. then all of our other demands will change. Why don’t we put this one aside for now. Here is what happened at the next negotiations session: Nexon: I’m sorry. but working without benefits is simply not acceptable. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. we’re really prepared to go the distance on this benefits issue. First. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. it will cost too much.) 136 50 Practical Negotiation Tactics . we want the part-time workers to apply for and fill fulltime positions as they become available. 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. We need some agreement on this today. Union: You don’t seem to understand. And I don’t believe you’re going to go call for a strike over this. This is something we just have to have. Nexon: We’ve got lots of issues to discuss. or else we’ll be asking the membership to strike. The union members ended up voting not to strike at this time. Nexon: I’m sorry. Another bargaining session was scheduled. We need an answer today. Second. Union: You’re wrong. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. We’re not going to reach agreement on this at all. This is a critical issue to us.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
If the employer is a shipping and express mail company. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. Since his toilet had overflowed and water was continuing to run all over the floor.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. he was able to successfully bargain for other services. for example. On the other hand. Unions can strike at any time to achieve their goals if they have some leverage. Try bargaining with a plumber! This homeowner. and was forced to pay whatever they demanded. It is sometimes referred to as “pressure bargaining. The same kind of thing happened a couple of years before that: In the middle of August. its union has the advantage in the weeks just before Christmas. not blessed with many household repair skills. his air-conditioning unit went out. when one side has “leverage” over the other. once had to call a plumber in for emergency repairs. there were times when there was no pressure and no emergency. Example 2 Let’s face it: Sometimes one party holds all the cards. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. while the other is not—that is. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. because this is the busiest time for that industry. The owners of professional sports Applying Pressure 141 . Since the heating and air conditioning company held no leverage over him. the guy was in no position to dicker over the price of the repair. such as the advantage of time.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. He was at the mercy of the company that could install an appropriate unit the fastest.
The employees had no power to resist the demands of the employer. however. and other undesired outcomes. When one side places undue pressure on the other side. there are likely to be long-term repercussions. either individually or through collective bargaining. If so. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. This gives it the upper hand in negotiating with employees.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. the employer has the advantage: a supply of jobs. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. (Team owners are notoriously unpredictable. then you are in a position where you can set reasonable demands on wages. for example. A note of caution: Circumstances in one round of negotiations might give one side an advantage. benefits. On the other hand. low employee motivation. if the unemployment rate is high and jobs are few. If you have a special skill that an employer needs and few others have that skill. What goes around comes around.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. but they are less willing to negotiate several months ahead. will what goes around come around? 142 50 Practical Negotiation Tactics . despite strong resistance. can suffer repercussions in the form of sabotage. she has leverage and can more likely hold firm on her price. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. Other employers find themselves in situations that actually reverse the leverage (when. consider whether or not the two parties will likely meet again in the future to negotiate. etc. he didn’t have to be flexible because the employees believed that they had no alternatives. it is the union’s turn to hold firm on its demand). unemployment is low and jobs are plentiful. When the employer proposed adding duties to the job classifications. but before you choose such a tactic.
and I can’t stand it. Susie: Okay. the girls had been fussy.) Applying Pressure 143 . Andrea: Okay. you have it when we drive home. the fighting starts up again. Andrea: The doll is mine. (Their dad pulls to the side of the road and turns to face them in the back seat. You’re driving me nuts. Just share the doll. The doll can be shared. We’ve got a long ride ahead of us. About an hour into the drive. I can’t drive if you keep this up. Consider making a suggestion or a proposal that completely surprises your opponent. Just because you saw it first doesn’t make it yours. Example 1 A father and his two daughters were on their way to visit the grandparents. Susie: The doll belongs to both of us. This time. (In a few minutes. Why? A sudden surprise can disrupt the dynamics of a negotiation. the argument is over the doll’s shoes. but use this tactic judiciously. Their dad tried to reason with them. Andrea. I took it out of the box. because you will probably only get to use it once. Andrea had taken them off the doll. and Susie.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 here’s how the “negotiations” went: Dad: You two stop fighting. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll.) Dad: Stop it right now. Tell Susie to let me have it. you have it this part of the trip. the little girls began to fight over the doll. and Susie hid them under the seat. Almost from the beginning of the three-hour drive. Mom said so.
The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. Both Andrea and Susie were so shocked by their dad’s action. The defendants contended that the auditor’s actions were politically motivated. charging that they breached their duty in their handling these funds. Dolly doesn’t need shoes on in the car. at great expense to the auditor’s office and the school board. to no avail. Finally. so it was worth the risk. Dolly has to have her shoes. He grabbed it and threw it out the window. they didn’t say another word.Andrea: Give me the shoes back. The tactic was so successful. and I hope I can convince you of that. The local newspaper was prepared to urge the auditor to end the litigation. I think I have acted properly. Conclusion Dad’s use of a “surprise” tactic was extreme. Dad tried correcting them a few more times. in fact. 144 50 Practical Negotiation Tactics . (They continued to argue and whine and pinch each other. He initiated the litigation against the local school board members and several banks that invested the money for the board. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. 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. he slowed down. The auditor asked to meet with the editor to explain his position. Susie: Daddy didn’t say anything about the shoes. and that they had invested and spent the tax dollars wisely. I want the shoes. Daddy said I got the doll on the way to Grandma’s house. and reached back for the doll. She can have them later. The litigation itself had been going on for more than three years. but nothing else up to that point was working.) Dad: Now there’s no more fighting over the doll.
but I have to warn you that from what I’ve seen and heard so far. rather than drop the case. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. perhaps you should just cut your losses—and just drop the suit. Obviously. as a matter of fact. the bank would not have done that had we not proven our case. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. I think I have something here that will convince you otherwise. but recommended that the parties reach a settlement.Editor: I’m certainly willing to listen. Auditor: I appreciate their arguments. there’s just nothing to back up your allegations. From what I can see. We believe the other defendants will soon follow suit. They’ve been making that same argument from the beginning. one of the banks settled with my office. I guess we’re finished here. but actually superior to some other entities you supervise. Thank you for coming in. Applying Pressure 145 . Here are the papers. Your reporters will probably want to follow up on it. Conclusion The editor wrote an editorial urging a resolution for the good of the community. That’s really the reason this has gone on so long. Auditor: Well. I really think the community would be better off. They are very persuasive that this is just a political battle. Editor: Well. Editor: Well. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. and it is costing your office money and good will. and a significant amount of money will go toward the tax fund. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. This morning. this case needs to be dropped.
you might be able to dilute their power by identifying their different interests and addressing them separately. I want to talk about a car! Mike: It’s really not one or the other. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. 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. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Mike knows he needs to get either his wife or his son on his side. night after night. Tina: I’m really against this pool table idea. they’ll be mobile! The last thing I want is for them to be out cruising around. especially Kevin. If the other side involves more than one person. I know we’ll all enjoy it. Mike: I know. Kevin: I don’t really care about a pool table. I can remember spending hours playing with my friends and family when I was growing up. Kevin is against it because he is turning 16 years-old soon. and a car is more important to him than a pool table. I’d 146 50 Practical Negotiation Tactics . Kevin: So am I. but I think it will get a lot of use. although getting your license and getting a pool table are connected. Dad. Tina and their son Kevin are against the idea.
What happened? Applying Pressure 147 . 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. I thought we were making real progress. Wylma: Tom. Instead of both opposing the idea. Once Mike convinced Tina of the idea’s merits. she joined his side of the debate. don’t you think you guys would use it? Kevin: I guess so. some. and Kevin and his friends use it often. Tina: Well. 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. They bought the pool table. the head of the union negotiating team. Kevin. I’m surprised. Here’s how the negotiations went. Mike: I really do. has just presented the company’s initial wage offer. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. Tom. 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. She noticed that Jim (another member of the union’s negotiating team. A number of contract changes have already been worked out and Wylma. only Kevin did. A pool table could attract them here. received it without comment. the chief negotiator for the company.like them to hang out here more. But I’m not going to hang out here all the time. then maybe it’s not such a bad idea.
forcing them to reconsider their demand. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. these are our actual accounting figures. these are accurate. Wylma: Tom. as Jim can point out to you. Tom: We don’t think so.) Wylma: Now Tom. you’ve seen our sales projections and production costs. I think you need to rethink your demand. (When they resumed. When the negotiations began again. Wylma: Jim. But Tom. but he added some workplace changes that Wylma was comfortable negotiating. Let’s start again tomorrow morning.Tom: Wylma: Nothing happened. Tom had reduced his wage demand significantly. Your demand is totally unreasonable. This is just what we think is fair. Right. you certainly are aware of our financial situation. 148 50 Practical Negotiation Tactics . Do you think this is reasonable? Jim: (looking uncomfortable) Well. Wylma: Let’s take a break. Jim? Jim: Yes. Wylma distributed copies of financial data that showed the company’s current condition. you’ve heard our demand.
You are almost 40 years old. When all of their children were small. Ever since Mom and Dad died. it was easy to agree on just giving presents to the children. married.Tactic 38: Break the Tension Tension is inevitable in most negotiations. especially between Madison and Cory. so pressure grew to draw names and exchange gifts. so you can find a way to quickly neutralize it. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. but it should never be at anybody’s personal expense. Stay alert and watch for clues that a negotiation is about to get out of hand. and it makes me very sad. Cory: Madison. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. get over it. some of the siblings decided they liked giving presents to one another. 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 is really important to me. the oldest and youngest Jones children. I want to say something. Tempers flare and people say things they shouldn’t out of anger or frustration. and had children. I don’t feel Christmas in the way I used to. Sometimes the argument got heated. That will just make a bad situation worse. We can’t afford to buy each other things we really need. Madison: Okay. so what’s the point? I don’t need another tie! Madison: It’s not the gift. Humor often works to break the tension of the room. but the thought that matters. Example 1 The four Jones kids grew up. Applying Pressure 149 . but as the children grew up and had families of their own.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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.
Then we can color. At some point. they would have to play ball with older children. the individual might be afraid that the exchange isn’t equitable). not the Prince. Julie wanted to play “dress-up. Dara. The day-care worker wanted to take them outside for a while so that he could visit with his friend. but since the other children in their room were not there. If there is resistance to compromise. 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. don’t you want to play? We could color before your mom comes. C. who was outside with older children.: Julie: Dara: Mr. C. each side must decide whether or not one more compromise will produce an agreement that they will later regret.: Julie: Dara: Julie: Girls. or maybe tomorrow. One day. 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. I want to play “Prince and Princess. however. 154 50 Practical Negotiation Tactics . it is better not to compromise. the exchange will be between things of equal value. Both of the little girls liked to play ball when they were outside.” Dara. Mr. I want to play “Princess” and I want Dara to be the “Prince. When that point is reached. (In a successful negotiation. If I can be the Princess. how about going out to the yard for a while? You can swing or play ball.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. and that doesn’t happen without compromise. Okay. Isn’t it “later” yet? Right now would be a good time to go outside.” but she needed Dara to play with her. Example 1 Julie and Dara both attend a local preschool.
: Julie: Hey. the parking lot will start to look trashy. The owner decided to try for a variance. Conclusion The children stayed inside and played dress-up. Mr. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. The owner and a small group of neighbors met to talk about these problems. and they still had time to color. We don’t want to go outside. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. C. 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. and teenagers attracted by Making Progress 155 .Mr. C. They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. or apply for a variance. They did all the compromising they were willing to do. you can come back in and play “Prince and Princess. failed to offer the children something that was as important as the plans they had made. the owner had to supply additional parking. According to the city’s zoning laws. neighbors became concerned about the changes to the mall. When his variance application was made public. 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. wouldn’t you like to go outside first? After you swing for a while or play ball. We want to play dress-up and then color.” No. however. The existing parking lot didn’t meet the current parking standards for that size theater.
the north lot is used more. as you said. with your plans to put the entrance of the theater on the east side of the mall. And. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. driveways on the south side of the mall are along the east and west side of the parking lot. What if I changed the entrance to the middle of the lot? That way. So. With the Comedy Club and the grocery store on that end. We’d like you to prohibit cars from entering or leaving from the south lot. We hope you’re right. the closest parking to it is along Elm Street. lights in and out at night can be very annoying. In fact. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. even though I’m not adding any parking. We’d really like to block off that cut-through and have the theater face the south. and break in his door. Right now. Not having in and out traffic to the south of the mall is just not very practical. We’re just not convinced.the theater will start to hang around and maybe wander around our yards at night. I’m afraid. You could have all of the traffic enter from the north lot. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. the south parking lot has not been used much. if I agree to move the theater entrance to the south side. and we’d like to keep it that way. only when that lot is full would cars come around the mall and park on the south side. not having direct access to the south lot from the street would be unworkable. Right now. but it’s not ever full. Many of our homes back up to that lot. The neighbors: Owner: 156 50 Practical Negotiation Tactics . I could put a privacy fence along the east and west—at the backs of your yards.
But you’re going to have to have some kind of security as well. The compromises were what everybody could live with. and they discouraged patrons from parking on neighborhood streets. Making Progress 157 . 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 I agree to move the theater entrance to the south. put a privacy fence along both the east and west sides of the south lot. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. The fences created a buffer from the lights and noise. set back a driveway width. the neighbors reported that they were very happy with the way it all worked out. Agreed. and make sure the parking lot is kept clean. Teens can form into gangs if left unwatched. Conclusion Both sides had to give up something on certain items in order to reach agreement. If the fence was set back the width of a driveway onto your property. however. add a new entrance into the south lot. And a year after the theater opened. Now you’re talking about considerable expense.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall.
professional.m. Joan decided to at least try and talk to the neighbor. Lonely: If you’re here to complain about my Rocky. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. This gives you an advantage. Joan: Hi.m. because you are the one to set the tone for agreement. and I just moved in next door. Lonely’s only companionship. 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. Joan had a new baby. Lonely. and that as angry as they were. they had gotten nowhere.. so her neighbor’s barking dog came as an unpleasant surprise. just forget it. thinking that you will be just as easy to work with on the sticky issues. Close your windows at night and don’t listen. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. she just didn’t think it was a serious problem. Mrs. and started to get upset. but going out of your way to be friendly is an especially helpful tactic. Joan was already pretty tired. The dog was Mrs. but be friendly. and what kind of complaints might have already been made. They might even start to underestimate your negotiating skills. I’m Joan. She didn’t believe her neighbors ought to complain about the barking. She learned that everyone in the neighborhood had complained at least once. and didn’t stop until 6:00 a. Mrs. and pleasant always enhances one’s ability to reach an agreement.m. respectful. and because she was hard of hearing. Your opponent might give in readily. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Present your position forcefully. If your opponent is aggressive or angry. Example 1 Joan was new to the neighborhood.Tactic 40: Be Friendly Being polite. 158 50 Practical Negotiation Tactics .
Lonely: Joan: Mrs. I’ve got a friend who is a veterinarian. I just wanted to come by and introduce myself. then. I can’t pay for something like that. I’ll see you. Why.) Hi. Maybe I could come back tomorrow and bring him? Oh. by the way. I know that some of these people around here don’t like him. Lonely: Joan: Mrs. Well. Lonely: Joan: Mrs. Who. not at all. I sure hope he starts sleeping through the night soon. I stopped by and visited with him over the fence this morning. it’s probably because they just haven’t had the time to get to know him. is a really sweet dog. I’d like to introduce you to my new baby.Joan: Mrs. The barking at night has been mentioned to me. He’s a real comfort to me. How long have you had him? Almost eight years now. Lonely: Joan: Mrs. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. Well. Lonely: Joan: No. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Lonely again. though. No. When he does. no. Do you think his age has contributed to some of that? You know. I guess that would be okay. I might have to talk to you about Rocky. (Joan’s sleep was disturbed by another night of barking. I guess so. isn’t he cute! He’s a handful. but she took her baby and went to visit Mrs. sure. Here’s my little angel. I need to get the baby home. He’s been keeping me up at night. don’t worry about that. too. I’ve only got my Social Security. Making Progress 159 . Mikey.
Company ZZZ: (surprised) Well. recognizing that the layoffs would be an issue in upcoming local elections. After Joan’s veterinarian friend visited with Mrs. Lonely’s needs and arrive at a workable solution to the problem. he prescribed medicine that gave Rocky a more regular sleep schedule.. the mayor called and asked for a meeting with Company ZZZ officials. Under its new corporate structure. Hearing about this from the press obviously puts you in a very embarrassing situation. overseeing a factory in Mexico and selling products in the states. Lonely didn’t have to pay for the medicine she could not afford. that’s very understanding of you. of course. I think that if you could have let me know ahead of time. and Mrs. Company ZZZ was not able to meet with local elected officials regarding the status of their operations before the press reported the layoffs and the uncertain future for the 150 white-collar employees. Mayor: (very friendly) I understand how these things happen. U. its 150 management and sales employees could continue to work in Happy City. The barking all but stopped. When he heard the news on the radio. It’s very difficult to make a move of this type without having it leak out. that the press got hold of the story of our company’s activities before we could call you to let you know. Joan took up contributions from the neighbors. They anticipated that it would be an unpleasant meeting.A. 160 50 Practical Negotiation Tactics . Lonely and Rocky.S. Here’s how the meeting went: Company ZZZ: We’re very sorry. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. agreed to meet with the mayor.Conclusion Joan’s friendly approach enabled her to understand Mrs. you would have. Company ZZZ.
Company ZZZ: I’m not sure what to tell you on that. the city has a potential buyer for your plant building. Would you be in a position to talk to me about such a deal. They need a really good deal on the plant price. the 150 management/sales jobs did end up moving to Mexico. We just haven’t heard anything yet. 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. or would we need to involve the Malaysia group? Company ZZZ: Certainly. because I’d hate for us not to make an appropriate pitch to them. You’ve been very understanding about this. and I want them to know that. Mayor: Great! Let me know when we can talk again. By the way. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. 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. This strategy worked. 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: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. Mayor: Please let me know as soon as you can. Making Progress 161 . and the mayor was reelected. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. Many laid-off employees did indeed find new jobs at the plant. Unfortunately. The buyer is a “disadvantaged business” we have been working with for some time. It’s possible that some of the 300 laid-off employees will find work at this new endeavor.
The two sisters had saved up a little money so that they could buy souvenirs. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. thus becoming a source of embarrassment. They might worry that the tapes will be made public or given to others. and Jones. threats. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. The effect on the other party might be even more substantial if lies. Susan repeated her demand. Conclusion For the first time in her life.00 to spend. age 15. Fred Adams.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. Susan understood the impact a tape recording can have when it reveals a lie. the younger sister. Then he played the tape. had $40. He asked his elder daughter about the arrangement. Alexis knew this was not fair. Alexis agreed. 162 50 Practical Negotiation Tactics . but Susan had only $20. the investigator. She borrowed a tape recorder so she could ask her father if this was a fair deal. Alexis then played the tape for her father. Example 1 Susan. Michael Wood. Alexis. Somehow. are talking about a possible settlement of the issue. until Susan said they would evenly split what they bought. and Alexis. the accused.00. age 14. or used to pressure the other side to agree to certain demands. this time in front of a hidden recorder. who was disappointed to hear that she might propose such a deal. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. or simply “bad faith” methods have been used by the other party. South Carolina. were on vacation with their parents in Myrtle Beach. Jones’s supervisor. Susan denied it.
And please describe your general manner. You never touched any part of her body? Not even accidentally? No. to quote you.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. Ruiz and Ms. No one could have possibly misunderstood your intentions? No reasonable person. and gestures did not have a single hint of sexual implication or innuendo? None at all. Appleton both claim they saw the incident and will testify. When Adams set the tape recorder on the table and revealed that he had witnesses. he also lost his negotiating position. Making Progress 163 . But by refusing to repeat his answers. Jones. I’ve brought a tape recorder with me. He failed to think about what might be the next step. Well. (a long pause) I want to see my lawyer. Your request. Mr. and now I’ll ask you to repeat your answers—on tape. I simply asked her to make copies for me as quickly as possible.” meaning something other than copies? No. exactly what you said to Ms. Starr. Jones suddenly realized that his strategy would not work. Stuart. So. stares. you are aware that the next step in this process is to ask witnesses to come forth. And you did not threaten her job if she did not. I think I can write my recommendation. Mr. So you refuse to repeat the answers you just gave us? Yes. Conclusion Jones had knowingly lied when he denied the charges. “Do what I want.
Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Many of us learned this one from our parents: After two people agree to the strategy. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. because you did the cutting. of course. The second person then chooses which of the two parts they will receive. the classic “split and choose” tactic might be the best way to settle the issue. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . one person is given the task of dividing the object(s) into two parts. which certainly is large enough (he naively thought) for two young children to easily share. Maria. Realizing the potential of getting the “smaller half. Roberto will get to choose which half he wants.” the divider. is usually careful about dividing the object into two equal parts. Maria and Roberto: No.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. with the remaining part going to the person who did the dividing. Their dad instructed them to share the candy bar. Oh. take this knife and slice the Snickers into two halves. 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.
Deal? Clarence: Sure. That makes them more desirable. so we should be able to divide the property fairly. They have a recent appraisal that values the property at $150. Archie: Here is the map. but is not sure how to arrive at a fair split. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Give me the map and a pencil. Archie: I really don’t care either. Example 2 Two friends and business partners. Clarence agrees to divide it. Lots must be at least one acre to be developed. that sounds fair. Then I will choose which parcel I want. There is only one place for an access road that must serve all lots. Making Progress 165 . Archie is ready to build a retirement home on the property. Clarence: Right. Clarence and Archie. both parties. quickly recognize the fairness of the divideand-choose method. I don’t really care which lakefront lots I keep. The problem is that one of us will get four lakefront lots and the other will only get three lots. Archie: That’s true. jointly purchased fourteen acres of lakefront property several years ago. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others.Conclusion When two people desire the same object and it is something that can be divided in some way. according to county deed restrictions.000. 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. and wants to divide it into two separate parcels. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. They all have a great view and are equally desirable to build on. even children.
and both men were happy with the arrangement.Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. Archie chose the parcel with the three lakefront lots. Which would you have chosen? 166 50 Practical Negotiation Tactics . and the second parcel with four lakefront lots and one other lot.
etc.” thus extending the scope of the negotiations. 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 .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. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. What started out as a single issue is now a combination of a major issue and a much smaller issue. we’ll take the suite if you’ll throw in free delivery and set up the furniture. is expected to dicker over the price. Conclusion The amount the couple spent was fairly large.” Many people have witnessed or used this effective negotiating tactic. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. Her husband Jason. so the salesperson delivered the suite himself. delivery was limited to a small geographical area. With a great deal of effort. attach legs. His tactic was to throw in a “nickel” in order to make lots of “dollars. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). he also set up all of the furniture in a second-floor bedroom.” Under store policy. and the delivery carrier doesn’t set up mirrors. However. miles from their home. Jason was having a hard time getting the salesman to lower the price. Brenda did her part when she said. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. “Okay.
the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. This experienced bargainer said. it can be a dealbreaker.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. so be prepared to withdraw the nickel and dime item at the hint of trouble.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations.important item. we’ll agree to Health Plan A with another ½ cent on the pension fund. At the end of negotiations. If one party misjudges the situation. 168 50 Practical Negotiation Tactics . In one case. “Okay.
Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. and all the rest is small junk. Kathy: But they are a matched set. Donna: They match. trustworthy. and performance evaluations for people to come across as likeable. Kathy: I’ll take the pool table. This creates what is called a “halo effect. decision-making meetings. Kathy: Then I’ll take the couch and love seat.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. You can go first. Kathy: I suggest we take turns choosing which of these things we want. Donna: Okay. Donna: No way! These are the last two pieces of furniture. I’ll take the color TV. Donna: I’ll take the bar with stools. People tend to make an effort to put their best foot forward. or knowledgeable. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . but they are two pieces of furniture. thus creating the impression in others that the good qualities they see are present all the time.
what can we do? Give me the couch and love seat! No. (Pause) We’ve got to settle this today and get this stuff moved. He’s our cousin. He might or might not have also been a good arbitrator. and if the bar and stools should be one item or two. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. The union negotiators.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. Johnny had the “halo” of an honest person. I want the stools. I trust his judgment. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. Example 2 During a heated labor negotiation. and he has always struck me as an honest person. and ask him if the couch and chair should be one item or two. I want the love seat. Good idea. What for? Tell him the situation. 170 50 Practical Negotiation Tactics . with a record of labor involvement that included three recent strikes. the team representing the city management found itself unable to convince the union negotiators that their newly proposed staffing plan would provide adequate personnel for each firehouse. Let’s call Johnny Ryan.
even if the proposal appeared to be valid. as a consultant to review their proposal. the management team hired Sam Boston. the former union president. The union accepted the proposal. the consultant did not speak. He said he believed that it would work as presented by management. This time. and that he did. the city management again hired Boston. but his mere presence caused the union leaders to accept a management point as valid.simply did not trust the management team. The teams took a weekend break from the stalled negotiations. On Monday. but the power of the so-called halo effect was great. 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. Making Progress 171 . Two weeks later. Boston was widely known as a totally honest man who speaks his mind. thus bringing the negotiations to a conclusion. They might have stretched his halo farther than his expertise and experience warranted. He solemnly told the union negotiators that he had been hired to review it. Boston went to the negotiation table with the management team. when negotiations again stalled on a retirement plan issue. without any reservations. During the break.
The owner. We love your house. (Next day) We’ve reviewed the records you’ve produced. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. What? That’s $35. $229. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. Sometimes.000. I’ll get back to you. They believe it is overpriced.000. $237.000. but we feel that it’s a fair offer.500. They sold for: $225. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000.000. $235. This offer is for more money than any four-bedroom houses on this neighborhood list.000 under the listing price! We realize that. Sam Jones. Here’s a list of the five that are about the same size as yours. but you’ve priced it way too high. but the right facts presented at the right time can chill or astound and completely turn things around. and we are countering with an offer of $250. but the key is to gather facts that you might need—not just the facts that you will need. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. and $237. has owned the house for 24 years and is downsizing to a condo. the other party will ignore or refuse to believe the information.000.
if other departments have ignored the policy. We’ve talked with purchasing and we have the authority to buy seven for $2. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. I’ll be… Okay. No one can go over $1. let’s not worry about it. I asked for a list of all new PCs bought this year. Order the new computers. Making Progress 173 .600 for a computer. The last 20 were over $2.000.600 unless the company president approves. Example 2 Supervisor: You know the policy. Conclusion Hatfield had anticipated what his supervisor’s position would be. Hatfield: While I was at purchasing. Here it is. who was not particularly knoledgeable about real estate. That’s the bottom price.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Conclusion The Joneses had based their asking price on the advice of a friend. Supervisor: If I okay this purchase order. We accept. I’ll get called on the carpet. Well… We have a written counter of $245. He found facts that supported his position.400 each. and wisely chose exactly when to present them in order to make his point. You can’t pay more than $1. Supervisor: Well. and did his homework.000 each. and we know that only this model will meet our needs. Hatfield: My staff has done a lot of research.
and they would all be unavailable to others. 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. I can’t check out these four books? Jenny (Librarian): That’s the policy. If you trust me.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. reveal misperceptions or lack of knowledge about positions that can be corrected. but I don’t set the policy and I can’t make exceptions. Example 1 Maureen: What. They can help you identify or better understand what the other side really wants. Maureen. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. can you check out two on a card for him? Jenny: Well. I want two of these. A maximum of three books can be checked out to a person at any one time. 174 50 Practical Negotiation Tactics . I’m sure you would not. I can do that within the rules. some people would have forty or fifty books out at the same time. Maureen: Well. The effective use of probing questions can help achieve a favorable settlement. Maureen: Well. yes. I trust you. you know me. But I can’t break the limit rule—it is an absolute rule here. and two are for my husband. Otherwise. Would I do that? Jenny: Maureen. Maureen: So you trust me with the books.
If that data ended up in the wrong hands. we can’t do that. it could kill us. Babu. Why? Some policy? Yes. but it’s because you don’t have access clearance. Who does have access clearance? Mike.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. I couldn’t find anyone who knew it. Sue. and they don’t even have a use for the sales data. What’s the policy number or date of approval? I don’t know. and Kenzie. Mary. Can you get me the number? Sure. They say it’s a security issue. But this forces us to make decisions without complete information! Yes. Security? Right. (Next day) Do you have the policy about giving out product sales information? No. Jay. Brooks. Mary and Kenzie? They are 2-3 pay grades below us. Making Progress 175 . Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. are you sure I can’t get your information technology people to give us direct information on product sales? No.
I’ll get it for you ASAP.P. When can I get the data? Mark: Today. that’s been the policy since I’ve been here. if we can have access? Mark: I guess so. Jack: Here.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. Once he discovered that employees in lower pay grades had access clearance. 176 50 Practical Negotiation Tactics . His probing questions turned up a critical fact. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. I’ll sign now.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. Jack: Can you ask your V. Jack was able to receive clearance as well.Mark: Well.
They bring it out when a dispute arises. 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. days. 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. When two parties believe they have an oral agreement. hours. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. this tactic can produce an agreement. 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. and the classic Walk Away (Tactic #48). If friends or neighbors need to settle something but prefer to avoid the negotiation process. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. or even months after the first offer is presented. 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. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). When multiple issues are at stake and most have been agreed upon during negotiations. In this process. this process can easily result in a final settlement.Stage 7: Reaching Agreement he final stage! It might come minutes. and the child learns an important lesson about life. 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. T Reaching Agreement 177 .
Nancy brought up the subject of vacation again after dinner. 2) allows the other side to feel the release that comes with completing the bargain. 3) and adds one last key demand to the congratulation sentence. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. After days and weeks of on-again. Let’s do go to Virginia Beach and Washington D. Larry Snyder gets bored staying in any one place for many days.C. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. “I’m thinking of agreeing to your plans for vacation. and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. off-again discussions.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. She said. 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. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics .” Conclusion The husband was so excited about visiting Washington. His wife had carefully planned her exact “premature” vacation agreement. As he hugged her. but his wife Nancy likes to stay put and relax. D.C. Near the end of a particularly anxious bargaining session when there was little time left to negotiate.
When the chief negotiator emerged with his team and headed toward my team. Therefore. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. My team was afraid we would not even come to an agreement. “…as long as you give us a 45-day probation period. There were grins and handshakes coming from the other side. he turned on a large warm smile and extended his hand to shake. but also that they sensed the weariness of my team. “It was hard for us. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. In our last offer. We all knew that it could come down to agreement or strike. (This is a bad position to be in.) Here’s what happened: Bob: I knew that the other side was similarly harried.almost willing to accept any deal. but held firm on remaining operating principles. but acceptable. symbolizing that he was agreeing to the entire final offer. One operating issue involved the probation period for new employees.” Bob: Ted timed this perfectly. because it makes you pretty vulnerable. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. fit. we made some small concessions on financial matters. but we agree to everything in your final proposal…” Members of my team shouted hooray. but the other side continued to ask for 60 days. It was so close. The old agreement specified a 30-day period. However. The celebration had begun. and rested. Reaching Agreement 179 . One of the best pieces of negotiation advice is to remain fresh. Ted said. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. as the negotiator came closer. My team had convinced me that doubling the time frame would create a real problem on the shop floor. I felt the tension in the room.
the negotiator skillfully finishes his words of congratulations by inserting one last key demand. However. 180 50 Practical Negotiation Tactics .Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. 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.
Sue: Let me get you the keys so you can take this one home overnight to see how you like it. or go after you and perhaps make a new concession in order to get you back to the table. but I thought I might want to try a new Highlander. right? Jay: Yes. a veteran salesperson.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. (Vahaly drives the new Highlander home. and he can simply buy it when the lease expires. Jay: Hi. He really likes it. how did you like it? Jay: Okay. be sure you think this through beforehand. My name is Jay Vahaly. He stopped by Pembroke one day to look at the new models. but my Avalon is a good car. Whether you are really bluffing or you are serious. all from Sue Wilson. The next morning. Jay. Jay. You had time to assess my car. Sue: I remember you. if I roll over the lease to a Highlander. what can you do on a 36-month lease? Reaching Agreement 181 . the following exchange occurs. I don’t want to negotiate. I like it. Sue: Well. Your opponent will have to either let you go and run the risk that things are really over. You bought your wife a new van just last year. I’ve worked with you before. here are your keys. and the lease on my Avalon is about to expire. too. but his Avalon has been a good car.) Jay: Sue.
Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. He effectively used the walk-away tactic to let Sue know that he was firm on the price. 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. Sue called him as soon as he walked in the door and offered another $50 break on the lease. at most. (15 minutes later) Sue: Well. Jay accepted. Sue: I’ll try. they came down to $199 more on a thirty-six month lease. but 182 50 Practical Negotiation Tactics . Please go back and work out a lower lease payment. I thought I’d get a fair deal. They’ve talked about retiring in recent months. (Jay got in his car and drove home. $100 more. That was the figure he was looking for. (He walks away) Sue: No. He was prepared to keep his Avalon if the lease was even $1 more than his limit. These Highlanders are hot items! Jay: Well. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. I’m disappointed. Jay. a successful musical instrument sales and rental store. Sue: Sorry. Jay—wait. Jay.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. Let me try again.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough.
Reaching Agreement 183 . Michael Roberts. Judy: Larry. Larry. Larry. and I only need your building to own it. visited their store. What do you think? Judy: Larry. and I’m prepared to offer you $4.0 million. come out here! (Judy comes out from the back room. a local developer. Larry: Michael.) 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. you’ve already told us that. In reality. go back to your office. which the Bizannes accept. after no contact from Larry or Judy. and I’m not interested in less. I still want to develop this block. Michael calls on them again with a check for $5. Michael: Well. One day. our accountant said it’s worth $6 million.5 million.both of them love their store.) Larry: Michael is here again. with a certified check. Larry: Judy. so why are you here? Michael: I’ve discussed it with my partners. today. they were prepared to accept $5. let’s eat lunch.5 million for the building. Two months later. (Judy and Larry walk into the back room and close the door. How’s business? Larry: Great! I’m surprised to see you again. and he is offering us $4. Michael: I have a check right here for 4.5 million.5 million. You rejected it. He met with Bizannes twice before. Larry: Yes. Michael: Good morning. and we gave you our price. but their continued walkout convinced Michael that they would hold firm.
One day Lynne dropped by for a visit and the discussion turned to the old Singer. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Lynne told Jenny that she and her husband Gary have restored two other Singers. 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). I offered it to you for nothing. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. In mediation. Example 1 Jenny and Lynne are sisters. Lynne and Gary bring the restored Singer to Jenny’s house. In ﬁnal offer arbitration. and would be able to restore hers as well. We have a few dollars invested in parts and we had fun working on it. Jenny has an antique Singer sewing machine. both sides have agreed in writing to accept the arbitrator’s decision. I won’t take it. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. which she has kept in a barn for over ten years. Lynne responded that this was their intention. Jenny: No. but they wanted to give Jenny $500 for her “share” of the machine. That was the deal. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. Let’s split the money. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision.000. In arbitration. Lynne: No.000. Both involve the use of third parties who are objective. 184 50 Practical Negotiation Tactics . Six months later. Each party wants their offer chosen.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. In most arbitrations. which is generally voluntary. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. They inform her that they put the machine on e-Bay and have an offer of $1. Keep the $1. Jenny told them to sell it.
They should get the other $950. Tina: Good. since he could only choose one offer. The union’s position could have run into millions of dollars. but we’ve made no movement on any of them since we started. Tina. Ralph: I know. My troops are getting restless.m. binding decision on the three items. Then we both submit our final offers to Judge Ryan within 48 hours. first on the health insurance co-pay. Their father found Jenny’s position to be the most reasonable. Example 2 Ralph: Well. based Reaching Agreement 185 .m. (One week later) I think Jenny’s position is the most reasonable.) Judge Ryan: Here is my written. Tina: Yes. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. after six weeks of negotiating. on Friday. I’ll buy that. Any increase in value was due to the work of Gary and Lynne. I can’t see any way to reach an agreement. As a brief explanation. the old machine was only worth $50 when Lynne hauled it away. Ralph: Right! (Friday at 3:00 p. and meet back here in 72 hours—3:00 p.” Lynne proposed a 50-50 split. so I am invoking the finaloffer arbitration ground rule we have in place. he did not need to “haggle” with them. I have chosen management’s offer to keep it as it is under the current contract. we are down to only three unresolved items.Jenny: Dad: Okay. At best.
I’m sure you realize that we could have taken six more weeks to reach the same point. 186 50 Practical Negotiation Tactics . I have chosen management’s offer because the union did not justify why the past practice should be changed. It will only cost $120. Well. Ralph.000—less than 1 percent of the total package. on the clothing allowance. and peacefully finalize a contract that contained several important gains for both sides. No increase has been given for six years. reasonable resolution to their last three unresolved issues. Second. nor why their method was superior. I have chosen the union’s final offer. and an item that large should have been negotiated at the table. At least we both saved time. Conclusion The final-offer arbitration process enabled the parties to gain a fast. and stress. but we agreed to this process. on the merit pool distribution method issue. Now let’s get a signed contract.Ralph: Tina: on last year’s data. I’m not happy with your decisions. Finally. money.
and felt that they would have to work fast to make an offer before someone else did. 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. and while Bill and Paulette had been using an agent to help locate houses. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. Bill and Paulette fell in love with the house. During a discussion. however. We’d like to make you an offer of $150. not the furniture. They saw the “For Sale” and “Open House” signs. They were not the only couple to come to the open house. They finally looked at a house they really liked. 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. The owners were selling the house without a real estate agent. Bill: Reaching Agreement 187 . Bill pulled the seller aside. Example 1 Bill and Paulette had been house-hunting for some time. Seller: We’re asking $152. If we shake hands on it right now.000.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. they looked at this particular house on their own. and decided to stop by to see if they liked the house. everyone is busy grappling with the details of the negotiations. we won’t be involving our real estate agent. all the usual stuff in a sale. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude.000. Obviously. At the very least. Seller: Yes. and one of the other couples looked very interested.
and that the problems with her job performance were. The supervisor assured the employer that there was no basis for her complaint. and the two area rugs were specifically included. and two area rugs.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. in fact.) Seller: So. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. she said that her supervisor had repeatedly asked her out.Seller: Just a minute. Under the section for appliances to be left on the property. Bill: (pleasantly surprised to learn that the garbage disposal. Sign here. and had been prepared to drop his price to $145. the refrigerator. (The seller recorded the offer of $150. a public agency. then we have a deal. he began to have “problems” with her job performance. Seller: Okay. If it’s what you meant. look this over. he left the price at $150. Let me just get the standard “offer of sale” form and fill out what I hear you saying. When he had the chance to put the deal in writing. that’s what I meant.000. the hutch. but I’d like to make sure there are no misunderstandings. he listed the stove.000. and when she refused. In her complaint. It worked. and the two area rugs. The supervisor pointed out that he had a staff of 20 or so women. he listed an attached hutch in the kitchen. and the garbage disposal. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . the house is yours. the hutch. all window blinds and drapes. Example 2 Monica brought a sex discrimination charge against her employer. I think we can work something out. real. Conclusion The seller had always intended to leave the garbage disposal. since he probably would have missed them) Yes. In the section for fixtures and miscellaneous items to be left on the property.
and expensive matter. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100.000. Monica had. Withdrawing. He offered to send settlement agreement papers to her.000. drawn-out. 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.000. I’m He: She: He: Reaching Agreement 189 . but said that fighting the charges would be a long.there was little basis for the complaint. You’re just trying to make it seem as if your supervisor did nothing wrong. But the employer doesn’t want to go through the expense and publicity of a trial. you didn’t mention in the agreement that in exchange for the $100. Look. even though we’re certain we would prevail. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. even though you are paying Monica because we can prove he did do something wrong. by this time. settling—What difference does it make to her? She’s getting her $100.000. my client is supposed to formally withdraw the complaint rather than just settle it. but it’s not standard when a complaint is formally withdrawn.000 without actually having to prove anything. The supervisor insisted that if the employer felt he had to settle. He’s happy to prove that in court. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. And the confidentiality clause is standard. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. Why’s that? Well. then Monica had to acknowledge that the supervisor did nothing wrong. It might be standard when there’s a settlement. and must agree not to tell anyone about the $100.
She: authorized to pay $200. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. There was a confidentiality agreement.000 when all that was asked for was $100. It was made clear that the employer had paid the additional $100. but word did get out that a public agency paid $200. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. 190 50 Practical Negotiation Tactics .000. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. to his disadvantage. I’ll take your offer back to her and let you know.000 and the conditions of the offer.000 just to get the employee to “withdraw” the complaint. Monica accepted the $200.000.
reaching an agreement is sometimes a long and difficult process. However. Putting an agreement into writing serves three purposes: communication. Think of how often you have said to someone. but some of the decisions were put off for a couple of months. but it was not what I meant.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. Unfortunately. it would have been easier to resume negotiations at a later date. When two friends agree on what movie to see. it is much more effective in the long run when the parties enter into “win-win” agreements. depend on the kind of negotiations in which you are involved. A union contract. The degree of detail and formality of a written document will. Putting the Agreement in Writing 191 . Reaching an agreement is the first step. commitment.” By the same token. “Oh. One way to help the parties abide by an agreement is to put it into written form.” Clear communication is essential if you want to reach an agreement and have it abided by. when they engage in honest “give and take” negotiations. rather than attack each other. however. the three sisters reached an amiable agreement. talking is not always the same thing as communicating. “That may be what I said. and when they agree to solve problems together. of course. As these examples of personal and business negotiations show. In Tactic #17 (Package Items). operating under an agreement after it has been reached can be even more difficult. and contract. Certainly someone has said to you. even an informal agreement benefits from some type of written documentation. most certainly needs to be in written form. then the parties have to abide by the agreement. If the agreement reached at the time had been put into writing with all three sisters signing it. a written document is hardly necessary. A Communication Hearing is not necessarily the same as listening. I thought you said something else.
When you create a written record of the details of an agreement. or express a thought or emotion through words. seek information. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester.” In Tactic #14 (Don’t Always Hide Your Weaknesses). the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. 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. a couple of months away. And because the sender and the receiver are two unique individuals. His mom could more easily enforce the agreement if she had it in writing.944. the message being conveyed and received might be understood differently. or movements being used by the sender.Communication is a process that involves a sender and a receiver. pictures. nine hundred and forty-four dollars—$22. When communication is limited to the spoken word only. that is. you have created something tangible that can be referred to in the future when memories become fuzzy. In Tactic #4 (Use Objective Criteria). Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. the price is spelled out in the loan document as “twenty-two thousand. 192 50 Practical Negotiation Tactics . sounds. If Jason fails to live up to his side of the deal. pictures. The sender wishes to convey an idea. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. The receiver has to decode the message being sent by trying to understand and interpret the words. Who isn’t excited about buying a brand new SUV or truck? Until. sounds. or movements. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. he can be reminded of the details because it’s all there in black and white. 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.
Putting the Agreement in Writing 193 . signed. when. ask yourself the basic questions of who. Carefully and completely describe the subject matter of the agreement. where. You can do this more formally by taking them to court (perhaps as a last resort). 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. Failure to do so can lead to big problems. before the trip. your plants die because the house-sitter wasn’t told to water them.Contract Finally. 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. Generally. say. and put that information into the document. or it isn’t an agreement—it’s merely the conveying of a gift. protect yourself by having a written. and how much. and getting all the parties to sign it usually creates an enforceable contract. why. However. have your spouse also agree to the details of the agreement. WHAT? The written document should clearly describe the item(s) covered by the agreement. the address and description of the real property. WHO? Provide of the full names the parties necessary to the agreement. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. the real estate contract includes information about the buyer and seller. Both parties must receive a benefit or something they personally consider of value. leading to misunderstandings and contract disputes. how many. In either case. If you have agreed to pay someone to house-sit while your family is on vacation. and dated agreement. pulling an agreement in writing. as many people learn when they purchase a home. what. one party will work if the other party pays for the work. dating it. which kind of. Here’s what we mean. in writing. details such as what fixtures stay or what appliances go can be easily overlooked. When you are ready to commit yourself in writing. One party wishes to buy what the other wishes to sell. which. and so on in standard contract form. one party will change behavior in exchange for something of value from the party who wants the behavior changed.
And it can create a tangible reminder of the deal (or an enforceable agreement. in fact. if that becomes necessary). The more-specific and clear these details are. which one or which kind of. dating it. depending upon the deal: when or where.The remaining questions fill in the details of the agreement. the better. how much or how many. and having all parties sign it ensures that the parties have. It gives the parties an opportunity to really buy into the deal. Putting an agreement in writing. 194 50 Practical Negotiation Tactics . agreed to the same thing.
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.
________________ 3. ________________ 7.Name of Negotiation Tactic 1. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 4. ________________ 9. ________________ 2. ________________ 10. ________________ 6. ________________ 8. ________________ 5.
This page intentionally left blank .
Brown. 1980. Maddux. M. Getting Together: Building Relationships As We Negotiate. M. Upper Saddle River. and B. 1999. and J. New York: Simon and Schuster. and Law. New York: Bantam Books. Roger. and J. Upper Saddle River. M. Roger. Los Altos. McKay. and C. Fiske. R. R. Fuller. Calif. 2001. K. Negotiation Skills.. New Jersey: Prentice-Hall. Saunders. Herb. Lewicki. Minton.REFERENCES Carrell. and S. Victor. Getting to Yes: Negotiating Agreement Without Giving In. Cleary. George. Sharpe.: Waveland Press. Prospect Heights. and S. Ury. Pocket Negotiator. 2nd ed. C. References 199 . W. Inc. 1991. Inc. and M. 7th ed. Labor Relations and Collective Bargaining: Cases. Mediation. 1996. Eshelman. Inc. New York: Penguin Books. David. 1987. Inc. 2nd ed. Inc. 2001. Fisher. 1988. 2004. New York: Basil Blackwell. Oakland. The Relaxation and Stress Reduction Workbook. D. 1989. Gotbaum. Practice. New York: M. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Patrick J. University of Missouri: Columbia Press. Domenici. Chicago: Richard D. The Negotiator’s Handbook. Gavin. R.: New Harbinger Publications. J.. New York: Penguin Books. Ill. You Can Negotiate Anything. 1991. Fisher. LittleJohn.E. Clark. Heavrin. Calif. The Essentials of Negotiation. Cohen. 1997.: Crisp Publications. E. New Jersey: Prentice-Hall. Patton. Kennedy. Inc. Inc. 1988. W. Negotiating in the Real World. Irwin. The Negotiation Handbook.
Cambridge. Gerald I. Lexington.org 200 50 Practical Negotiation Tactics . Massachusetts: PON Books. J. Stulberg. Tsogas. Dudley. New York: Viking Press. L. 1994. 1996. Inc. Labor Relations in a Global Economy. Heath and Company. 1987.negotiationsources. Taking Charge/Managing Conflict. Weeks. Lectures on Negotiation Analysis. Inc. 2001. The Art of Negotiating. Massachusetts: Harvard University Press. 1982. The Mind and Heart of a Negotiator. New York: M. www. Inc. Inc. Getting Past No: Negotiating with Difficult People. 1981. New York: Penguin Putnam. Howard. William. 1991. The Art and Science of Negotiation. G. Ury. New Jersey: PrenticeHall. 1999. The Eight Essential Steps to Conflict Resolution. George. Raiffa. New York: Bantam Books. C. R. Howard. Raiffa. 1998. Thompson. B. Sharpe. Upper Saddle River. Shell.Nierenberg. Cambridge. Bargaining for Advantage. New York: Simon and Schuster.E. Massachusetts: D.
Business Forum. Carrell has held academic positions at California State University. Human Resource Management. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. and MBA and B. The Personnel Administrator. Personnel.ABOUT THE AUTHORS ichael R.D. Carrell are in the fields of collective bargaining and labor relations. The Academy of Management Review. During his academic career he has received awards for both outstanding research and teaching. Carrell is Dean of the College of Business at Northern Kentucky University. The University of Nebraska-Omaha. Bakersfield. organizational behavior. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. which is located in the greater Cincinnati area. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. and served as President of the Board and Mayor Pro-tem for three terms. Personnel Journal. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. Dr. In addition to negotiating numerous litigation settlements and contracts. Morehead State University. in Economics from the University of Louisville. and the University of Louisville. The Journal of Accountancy Training. In addition. Books published by Dr. Marshall University. M Christina Heavrin J. and Public Personnel Management. and negotiations. HR Magazine. 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 . Labor Law Journal. he was elected to the City of Louisville Board of Aldermen for five terms. Organizational Behavior and Human Performance. He received his doctorate from the University of Kentucky.A.
202 50 Practical Negotiation Tactics . 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. an agreement between the State of Kentucky.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. Jefferson County. the City and a for-profit hospital for guaranteed indigent health care services for city residents. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 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.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.