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50 Practical Negotiation Tactics

50 Practical Negotiation Tactics

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  • Tactic 1: Know Your BATNA
  • Tactic 2: Know Your Opponent’s Real Objective
  • Tactic 3: Control the Setting
  • Tactic 4: Use Objective Criteria
  • Tactic 5: List All Items to Be Negotiated
  • Tactic 6: Timing Is Everything
  • Tactic 7: Decide How “High” Is High
  • Tactic 8: The Good Guy/Bad Guy Routine
  • Tactic 9: Control Your Emotions
  • Tactic 10: The Reciprocal Buy-Sell Offer
  • Tactic 11: Use an “Expert Witness”
  • Tactic 12: Find Common Interests
  • Tactic 13: Set a Deadline
  • Tactic 14: Don’t Always Hide Your Weaknesses
  • Tactic 15: Caucus
  • Tactic 16: Use Throwaway Items
  • Tactic 17: Package Items
  • Tactic 18: Agree on Something As Soon As You Can
  • Tactic 19: Make a First and Best Offer
  • Tactic 20: Posturing
  • Tactic 21: Avoid the “Winner’s Curse”
  • Tactic 22: Propose Multiple Options
  • Tactic 23: The “Win-Win” Approach
  • Tactic 24: Wait to Counter
  • Tactic 25: Be Flexible
  • Tactic 26: Keep Few Secrets
  • Tactic 27: Expand the Pie
  • Tactic 28: Offer Fixed Alternatives
  • Tactic 29: Prolonged Silence
  • Tactic 30: Always Leave Room for Dessert
  • Tactic 31: Cut Salami Slices
  • Tactic 32: Don’t Exaggerate
  • Tactic 33: Bluff!
  • Tactic 34: Control the Forum with Visuals
  • Tactic 35: Apply Pressure (when you have the leverage)
  • Tactic 36: Surprise!
  • Tactic 37: Divide a nd Conquer
  • Tactic 38: Break the Tension
  • Tactic 39: Compromise
  • Tactic 40: Be Friendly
  • Tactic 41: Record the Meeting
  • Tactic 42: Split and Choose
  • Tactic 43: Nickel and Diming
  • Tactic 44: Make Use of a Positive “Halo Effect”
  • Tactic 45: Use Facts
  • Tactic 46: Ask Probing Questions
  • Tactic 47: The Premature Congratulation
  • Tactic 48: Walk Away
  • Tactic 49: Final-Offer Arbitration
  • Tactic 50: Commit the Offer to Paper


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



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


50 Practical Negotiation Tactics

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



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

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

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

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

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

stages can be combined. What one side gains.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. the other side loses. or even skipped altogether. 10 50 Practical Negotiation Tactics . but feel free to try them when they seem most appropriate to your specific circumstance. Depending on the situation and the parties involved. 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. rearranged. 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.

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

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




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


50 Practical Negotiation Tactics

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

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



The union is demanding wage and benefit increases. notified all the employees of their intentions. as Harvey had for many years. the Jaggers decided to seek buyers for their land. The owners. 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. but rather what the buyer planned to do with the car. 16 50 Practical Negotiation Tactics . Conclusion Selling their business was the Jaggers’ BATNA.” which was refused. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. selling became an attractive alternative to a strike or prolonged battle.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. The Jaggers gave the union their “last. and it now employs 230 craftsmen. In this case. The union negotiators thought the Jaggers were bluffing. The threatened strike became a reality. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. The $56 million dollar business took them 30 years to grow. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. best. inventory. as a last resort. The union negotiators convinced the employees that this too. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. and final offer. For the past two months. They learned that their assets would be easy to sell and were worth more than originally estimated. With only two weeks remaining before a threatened strike. and equipment. When negotiations with the union became hopeless. was a power play. providing them with a very good income for life. his BATNA was not to hold out for more money. 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.

Example 1 Tom had always admired John’s 1861 Confederate rifle. for example. you still interested in my rifle? Of course. because if the company does not provide relocation benefits. it’s still perfect. right? John: Sure. Are you finally ready to sell it? Yes. Preparation 17 . I’ve been thinking of getting rid of it for a while. I guess I couldn’t take less than $20.000.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. you know. so Tom was surprised when John called him out of the blue one day with a proposal. sure. 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. I think so. I’ll have to think about that. Make me an offer. Just running out of space. it’s to your advantage to know what is behind a seller’s decision to put it on the market. If you are the party making the offer on the house. John assured Tom that this would never happen. This is a good thing to know. she might have to take a lower offer just to be able to move. What changed your mind about getting rid of it? It is still in perfect condition. It is extremely rare—one of only 100 made with that bore and handle. what the other party’s desired outcome is. How much are you thinking it’s worth? John: Well. Tom: $20. A person who has to sell her home because her company is relocating her. might not be willing to lower her asking price because she knows that her company has agreed to buy the house if she can’t sell it. John: Tom: John: Tom: Tom. Just as important is the why. and told John several times to let him know if he ever wanted to get rid of it. at some point. Gosh.000? That’s more than I planned.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The agent explained that the seller was desperate.” The agent took the offer to the seller. and the buyer was able to completely renovate the house and still have a great deal. with “All right. 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.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. I offer half the asking price. The buyer loved the location. 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). Weeks later. The desperate owner agreed. For example. “Please make any offer—they are motivated!” The buyer responded. The buyer said he wasn’t interested. 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). His teenage sons had “trashed” the house. the seller’s agent called the buyer about the property. By assuming opposing roles. half-serious. 34 50 Practical Negotiation Tactics . but the inside was a complete turnoff. If there is a significant weakness in your position.

Carol: We really want to sell. Planning a Strategy 35 . And I don’t see a lot of difference in the neighborhood. one buyer shows some interest. Be realistic. so think this through well ahead of time. Carol wants $160.000. Buyer: We really like the house. Anyone buying the house would want to change wall colors or add new carpets. The market hasn’t gone up that much in six years. Carol: Maybe not. However. it is likely that your opponent will. Surely there’s some flexibility in your asking price. and then look at the demand from your opponent’s perspective. but we simply can’t take less than $160. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. and just refuses to reduce it. but quite frankly. Buyer: The air conditioning might have increased the value of the house. First. but the redecorating is of little value. so do not underestimate what you might be able to achieve. but not so high as to end the negotiations before they begin. After all.000. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. six years ago you bought it for $60. Your demand should be high enough to give you room to compromise. we think $160. your request must not be so low that the other party concludes that you are not negotiating in good faith. but certainly not exceptional in any way.000.000 is very high. She has had it on and off the market for the last five years. as well. It’s a good neighborhood. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Each time. We also think that the neighborhood has improved over the last few years. Finally. If you consider the demand ridiculous. but the house has increased in value. You are not likely to get more than you request.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. with no success.

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

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

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

since they are sitting out in the driveway with it. etc. Andy: No. you’re really moving! I hate to see you leave. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. I can use them. They cost about $300. not for $1. Half what it cost us new. Peggy. Example 1 So. and I know how you take care of things. Peggy: That’s fair. I don’t know what the deal is now. Andy and Paula: Yes. what’s your price? Andy: $1. Peggy: So.400 if the catcher and can are included. I’ll go home and you can call me if you two can reach an agreement.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. angry. Peggy: I’m hearing one thing from Paula and another from Andy. And take the leaf-catcher attachment and the gas can.200! We should get $1. Andy: I want them… Paula: Go ahead and take them. threatening. only three years ago. we won’t need it at the new condo. so I’ll take it. Paula: Go ahead and ride it home. Andy and Paula. Andy: No. I want to keep those. while another acts difficult. (bad guy) and implies that his or her side will hold firm on their demands. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. I heard that you want to sell your riding mower.200. Peggy: Planning a Strategy 39 . Peggy: I assumed they went with the mower.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Adapted from Labor Relations and Collective Bargaining.750) Target Point ($24. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000) Settlement Range ($22.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. 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. Carrell and Christina Heavrin. This is a practical starting point that will not anger the other side (and might even be expected). such as proposing to continue at the current rate or price.000) Target Point ($23. as illustrated in the following figure: Seller Resistance Point ($22. The negotiator firmly states that it is their best offer in an attempt to gain a nice.750–$25. 190–192. 2: Distributive Bargaining Process. (2004). quick agreement. by Michael R. 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. 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. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.000 22 23 24 25 26 27 Initial Offer $28. for example. Another common strategy is to start with the status quo. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Exchanging Initial Offers 61 . “Distributive” bargaining (“win-lose” or “zero sum”) is used.500) M $21.000 Buyer Initial Offer ($21.500) Resistance Point ($25. None is as important as the first one.500) Fig.

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

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

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

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

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. 66 50 Practical Negotiation Tactics . it’s a good proposal. many will want to use it for their children’s education. What is this. 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. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. 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. Tuition in place of health insurances? They’ll think I’ve lost my mind. The union’s lead negotiator misunderstood the proposal. With the cost of college educations so high. Union negotiator #2: Please—just a moment outside. The company’s negotiator didn’t recognize the misunderstanding. and the following conversation occurred. A lot of employees have spouses who can get health insurance coverage through their work.

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

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

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

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

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

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

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

Let’s get started. 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. tuition benefits. and the parking spaces). but the parties were able to come to agreement because the wage issue had been resolved. I think it also makes sense to include tuition benefits in the Working Conditions category. 74 50 Practical Negotiation Tactics . Also. paid leave times. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. I would include that under the Working Conditions category. that makes sense. Later negotiations were difficult. because they’re really an incentive for better performance. Executive Director: Well. Executive Director: Sounds like a good agenda. to be honest with you. Executive Director: I think it’s a good idea to group items together. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. as well. the paid leave categories are pretty clearly defined. Conclusion The executive director’s request to move merit raises out of the Wage category and move paid leave into that category because there is little flexibility to finance those areas allowed the parties to resolve the wage issue first. So I’d like to see us get through the wage issues quickly and then move on.efits (health insurance. Employees: Okay. There is more flexibility to use non-public money sources to reward employees who will cover night or weekend hours or who qualify for merit increases. we are an agency supported generally by public funding. but I’d change your list.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

is likely to pull away from the table.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. but possibly of different values to your opponent. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). One or more parts might be acceptable or indicate movement from their previous positions. and do not flatly reject it because it is not your offer. Skilled negotiators such as salespeople. In some negotiation situations. Instead. It has often been said that the key to negotiations is to be flexible (see Tactic #25). because if you do not at least appear to be flexible. be enlarged (see Tactic #27: Expanding the Pie). Also. carefully evaluate an opponent’s offer. the other party. which would most likely weaken their position (see Tactic #26: Keeping Secrets). 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. Experienced negotiators seldom reveal their exact priorities and objectives. labor negotiators. and attorneys use tried and true tactics in giving and receiving offers. T Making Counteroffers (The “Give and Take”) 89 . Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. When the other party makes an offer. in fact. seeing no common ground. what appears to be an outer limit of the settlement range when the process starts can. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). do not dismiss it because it is not all you want. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Expect that the “total pie” will be different from what it was at the outset. which is often the case.

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

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

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

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

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

I’ll trade your sidewalk and trees for my whirlpool bath.000 $3.000 $2. Maureen: No.000 $1.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.000 $500 $1. We have $1.500 $5. which I’d like to keep in the bank. Making Counteroffers (The “Give and Take”) 95 . I’d like to spend some of it on lighting upgrades. These are all permanent immediate needs.500 left. and we both get things we want.000! Brooks: Good. that makes sense. Can we split it evenly? Brooks: Okay. $750 for lighting and $750 in the bank.000 $5. which takes another $3.200 $200–$2.500 $2.# 1 Sod Item Cost $1.500 $500 $1.

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

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

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

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

Under the restructuring.m. Under ABC ‘s contract with the union. and the union foreman would report directly to the plant manager.) Listen. and that’s it. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. and that’s not negotiable. The appeals procedure would have to be altered to reflect the restructuring.m. I want a 10:30 p. but changed his mind when he saw Jasper’s attitude. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. curfew on TV and other noise every night. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. and d) a hearing with company owner if the matter is not resolved in 20 days. Jasper: (without taking a breath) At best. No agreement was reached. 10:30 p. Jasper: Midnight. b) written complaint to a floor manager if the matter is not resolved in 5 days. Rob: (there is no hesitation in this voice) No. the positions of non-union crew leader and floor manager would both be eliminated. is all I’ll consider. midnight during the week is the only thing I’ll consider. The union contract required that management renegotiate this change in the grievance procedure with the union. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics .

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

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

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

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

but we can’t fund all of the $12 or $15 million.5 million is available for distribution to numerous charities. a non-profit organization for orphaned children. Kids’ Home: That’s why we brought the foundation’s officials with us. the interest income of around $6.000 a year for operations. the foundation’s regular annual grants come to roughly half of their available funds. but the principal of the fund can’t be touched. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Unfortunately (for Kids’ Home). City: Can’t you borrow the money from a bank to build the facility. 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. Estimates for building a new orphan home ranged from $12–$15 million. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. we hope to break ground early next year for the new orphan home. They are meeting with the city to ask that the land be donated by the city for the project. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . Kids’ Home hoped to get $500. The foundation has a substantial endowment fund. we’re committed in theory. We only have maybe $2 million a year to put toward this charity. Kids’ Home: As you know. depending on the cost of the land. We need the city’s help by allowing us to get the city land donated to us (for free). Each year.Example 2 Kids’ Home. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. Foundation officals: Oh. City officals: We can probably give you the land for free.

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

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

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

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

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

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

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

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

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

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


50 Practical Negotiation Tactics

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

Making Counteroffers (The “Give and Take”)


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


50 Practical Negotiation Tactics

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

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

Making Counteroffers (The “Give and Take”)


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

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

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

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

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

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

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

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

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

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

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

Saleswoman: Simple.00 per month for your service. I can’t afford that much.” she had him—she worked around the $300 slices. as promised. (looks at the numbers) That looks good. down payment.Buyer: I don’t see how you can do that. But my neighbor pays $39. Great! So.000 down. I can’t discuss another client’s account.00 per month. you can get the Disney channel for only $5. do you want Disney? Yes.00 per month. You can do that. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. and payout slices to reach the total price she wanted. Instead of a three-year lease.000 price into “slices” the buyer thought reasonable. Once the buyer volunteered that $300 was an affordable “slice. Let’s see.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. and added the trade-in.” She decided to cut the $45. can’t you? Buyer: Yes. Making Counteroffers (The “Give and Take”) 127 . but what else must I buy? Only the basic service for $8. Sure. I can afford $6. do you want HBO? How much? $5.99 per month. with your car and $6. it will be a five-year lease. but let me see the numbers.

I really want the sports channels. 3.99 per month.00. but he agreed to six “salami slices” for a total of $38. Great. Thanks.00 per month.00 a month. 128 50 Practical Negotiation Tactics . That’s $5. Conclusion The owner thought his neighbor’s service at $39. Okay. 2? How much? $8. Any other kids’ channels? Yes. instead of one total amount. What about the music package? Yes. The total is $38. Yeah.00! Why? Because he judged the per-slice price to be reasonable. Disney is for the kids! The sports channels are for me. and my wife wants the old movies. they asked about the Cartoon Network. and SI 1. we had that before. 2. But that’s all! Then we’ll hook you up on Monday.00 per month was far too much.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. and probably felt much better about the total negotiated package because it was presented in modest individual slices. That’s another $5.

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

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

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

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

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

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

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

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

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

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

Applying Pressure


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

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


50 Practical Negotiation Tactics

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

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

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

Applying Pressure


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

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


50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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


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

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

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


50 Practical Negotiation Tactics

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

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

Applying Pressure


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


Making Progress


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

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

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

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

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

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

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

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

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

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

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

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

Which would you have chosen? 166 50 Practical Negotiation Tactics . 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. and the second parcel with four lakefront lots and one other lot. Archie chose the parcel with the three lakefront lots.

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

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

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

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

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

000. We love your house. $237.000. This offer is for more money than any four-bedroom houses on this neighborhood list. and $237. $229. but we feel that it’s a fair offer.000 under the listing price! We realize that. but the key is to gather facts that you might need—not just the facts that you will need. The owner.000. What? That’s $35.000. $235. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. I’ll get back to you. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. They sold for: $225. 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. but you’ve priced it way too high.500. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . the other party will ignore or refuse to believe the information. and we are countering with an offer of $250. (Next day) We’ve reviewed the records you’ve produced.000. Sometimes. has owned the house for 24 years and is downsizing to a condo. Sam Jones.000. but the right facts presented at the right time can chill or astound and completely turn things around. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. Here’s a list of the five that are about the same size as yours. They believe it is overpriced.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.

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

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

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

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

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

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

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

the negotiator skillfully finishes his words of congratulations by inserting one last key demand. 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.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. However. 180 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

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

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

There was a confidentiality agreement. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. but word did get out that a public agency paid $200.She: authorized to pay $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 when all that was asked for was $100.000 just to get the employee to “withdraw” the complaint.000 and the conditions of the offer. I’ll take your offer back to her and let you know. 190 50 Practical Negotiation Tactics .000.000. Monica accepted the $200. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. It was made clear that the employer had paid the additional $100. to his disadvantage.

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

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

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

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

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

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

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

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

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

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

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

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