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



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

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

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

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

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

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

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

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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.



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

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

and we’re committed to keeping it open as a major division of our company. Was Tom interested? Tom declined. Well. if you could come up a little—say $18.) Tom: John. 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. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. we 18 50 Practical Negotiation Tactics . Without some trust. I’ve been thinking about your offer. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. it made the negotiations easier.500—we’d have a deal. John: Well. but I could get the money to you right away. I don’t think I can go higher than $18. but then he will be happy to retire. No longer worried about John’s motives. Rick needs to remain president of the company for the next two years. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. we really want to buy your company. Tom now felt comfortable negotiating the price. BigManu: Rick. parties to a negotiation are not likely to reach agreement.000.500 had an 1861 for sale. Tom: Okay.Tom: Okay. let me think about it and I’ll get back to you. but thought this might explain John’s sudden interest in selling the rifle. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. the owner of a small manufacturing company. Conclusion Tom entered into the negotiations suspicious of John’s motives. However. fearing that this will put all of his employees out of work. He is two years away from retiring and does not want his business to fail before he does. The sale price for the company has not yet been agreed to. Example 2 Rick. let’s do it. has begun negotiations to sell his firm to BigManu Company.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

When Carol refused to budge. Neither Edward Bits nor Edmund Bites. We’re curious.000. but they have no idea what the value of their firm’s name might be in this nearby city. the founders of the firm. were still alive. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites.000 offer by coming down in price at least a little. or she has unreal expectations. enjoying a statewide reputation for quality representation. Carol drove off a potential buyer by setting an asking price that was just too high.000 immediately. 36 50 Practical Negotiation Tactics . In any event. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. Inquiries to other law firms were not very helpful because in almost all of the instances.000? Carol: We really can’t take less than $160. as to how you think the name is going to benefit you. The partners are interested in selling the name. and then $10. the buyer took it as a signal that either Carol didn’t want to sell. 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. Example 2 The law firm of Bits & Bites was a Sioux City institution. we are certainly interested in your request to “buy” our firm name to use in your city. Here’s how the initial negotiations went: Partners: Well. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. The other law firm was prepared to pay $100.Buyer: What if we offered you $100. though.

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

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

Andy: No. Peggy: Planning a Strategy 39 . (bad guy) and implies that his or her side will hold firm on their demands. Half what it cost us new. I want to keep those. what’s your price? Andy: $1. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. not for $1. while another acts difficult. Andy and Paula: Yes. since they are sitting out in the driveway with it. we won’t need it at the new condo. you’re really moving! I hate to see you leave. etc. Andy: No. Peggy: That’s fair. and I know how you take care of things. Peggy: So. Andy and Paula. I’ll go home and you can call me if you two can reach an agreement. angry. And take the leaf-catcher attachment and the gas can. only three years ago. Example 1 So. threatening.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. They cost about $300. Andy: I want them… Paula: Go ahead and take them.200.200! We should get $1. 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 don’t know what the deal is now. Paula: Go ahead and ride it home.400 if the catcher and can are included. Peggy: I assumed they went with the mower. I can use them. Peggy. Peggy: I’m hearing one thing from Paula and another from Andy. so I’ll take it. I heard that you want to sell your riding mower.

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

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

such as deals on computer packages and phone services. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. and might even harden your opponent into an unfavorable position (for you or for both of you). He decided that the best approach was to act indignant when he spoke to the company representative. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. 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. The fault was partly his because he did not stay on top of changes. How may I help you? Hello. he was very unhappy. made some very good purchase decisions for his small business. I have a problem with my recent bill and my billing rate. but I recently was sold a $. So. 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. 42 50 Practical Negotiation Tactics . It seems that the rate you are charging me on my home phone is $1.00 a minute. He had. in fact.Tactic 9: Control Your Emotions Stay cool. I noticed this.10 a minute rate at my office location. 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. 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. because we have had a sick relative out of town and we used long distance a lot this past month.

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

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

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

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

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

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

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

The couple decided to limit their selection to those rated “excellent. he decided upon a strategy: First establish himself as the “dimension expert. Conclusion The husband became the “expert” in this situation by doing the homework. she glanced at it and immediately deferred to his opinion. and created a spreadsheet to compare the five best-rated couches on their list. Based on seating capacity. It can also work in reverse: establishing the other person as the expert. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . When it came to comfort. Example 1 A young couple were discussing a possible purchase of new furniture for their living room.” but there were substantial differences in price—differences that the wife did not see as a problem. and forcing him or her to control the discussion of the issue. the one that was the most expensive was superior. This strategy worked. When he showed his wife the detailed spreadsheet.” and then argue for the frugal alternative. They both expressed an interest in finding a couch that offered the most “interior” space. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. He thus ended up having greater negotiating power. and the husband felt like he saved them hundreds of dollars. the one he wanted (one of the least-expensive) was superior. The husband found the dimensions of the couches in the brochures and Web sites. Looking at these statistics.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. This approach can also be reversed: The wife in this situation is a banker.

” If you spend many hours learning about Health Maintenance Organizations (HMOs). Preferred Provider Organizations (PPOs).investment decision or deal with an error in a bill. he argues that she is the expert. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . and should therefore handle the problem. and Point of Service (POS) plans. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. you gain an edge when negotiating a new plan for your company. 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.

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

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

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

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

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

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

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

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

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

Adapted from Labor Relations and Collective Bargaining.750) Target Point ($24. Another common strategy is to start with the status quo. Exchanging Initial Offers 61 . in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. The negotiator firmly states that it is their best offer in an attempt to gain a nice. as illustrated in the following figure: Seller Resistance Point ($22.500) Fig.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.000) Target Point ($23. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. None is as important as the first one.000 Buyer Initial Offer ($21.500) Resistance Point ($25. quick agreement. (2004). Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. for example.500) M $21. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse.750–$25. 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. 2: Distributive Bargaining Process. “Distributive” bargaining (“win-lose” or “zero sum”) is used. 190–192. Carrell and Christina Heavrin. by Michael R. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.000 22 23 24 25 26 27 Initial Offer $28.000) Settlement Range ($22.

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

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

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

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

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

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

but … Salesman: But what? Hobbs: Well. Hobbs: Yes. But for this price. Example 1 The buyer. 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. At a point late in the negotiations. quickly checked the dealer’s inventory of sport utility vehicles in stock. However. Hobbs. this conversation takes place: Hobbs: Yes. It is a useful tactic in any negotiations. when the two sides are only a few dollars apart. Here’s how it works: Party A exchanges the item for something of true value. not revealing that the item exchanged is a “throwaway. you are making $200 profit over the true dealer’s cost. and noticed that none of the vehicles have a green exterior. Mr. we’ve got expenses and we need to make some profit. He doesn’t really care about the color of the new vehicle. according to my figures. I can go to another dealer and get a green exterior—the color I like best. but the key to making it work is to include the throwaways in an initial list of demands OR add it in at a strategic time. according to the Consumer Reports listing of the cost of the vehicle. but in reality. but he makes a mental note to use color as a “throwaway” item. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . I know. you don’t want your opponent to know what these things are. it’s a great car and a fair deal.” Throwaway items are those things that hold little or no value to you. Salesman: Well. I’ll go get him.” Party B thinks that A has sacrificed one important objective to gain another. so be sure you present them in a way that suggests importance. Salesman: Let me talk to my manager.

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

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

realizing that the total cost of a deal might make or break the agreement. 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. For example. three ways. can indicate that something you think is minor is really a major concern to your opponent. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate.000 with no mortgage on it. In addition. one might package all of the financial issues in one group and negotiate on that package as one issue. it is often helpful to package the items in distinct groups and then deal with each package separately. were faced with the task of selling the house and disposing of their mom’s personal belongings.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. along with the cash. and a collection of antique furniture. we need to sell the house. for example. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. A reluctance to include one particular financial item with other financial issues. 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. 300 shares of stock in a pharmaceutical company. but I’d like to talk about the house and the furniture. The house and much of the furniture has been in the Exchanging Initial Offers 71 . a house valued at $250. the antiques. Anne: As I see it. When the girls decided it was time to talk about the estate. Autumn and Angela. Anne and her sisters. and the stock and distribute the proceeds. they met at the house. The estate’s assets included a checking and savings account totaling $450.000. Example 1 When their mother died at age 82.

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

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

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

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

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

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

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

It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. Jeff spends many hours mowing the yard every week.000 for it six years ago. we plan on selling our Ford tractor when we move. consider using the “First and Best” tactic. Ann: Well. What do you want for it? Colleen: Well. Okay? No quibbling. Why don’t you give me a price? Colleen: Oh. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. period. we’ll sell it to you. we paid $5. and even more hours in the fall picking up leaves. I don’t have any idea. You must mean what you say and be prepared to walk away from an unacceptable offer. I know you and Jeff said you’d like one because you have about five acres. We plan to put an ad in the paper next week. and it came with the bush hog and the leaf pick-up. Ann: Thanks! We really need one. The “first and best” tactic enabled them to settle the matter easily.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. no hard feelings either way. 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. Exchanging Initial Offers 79 . 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. Example 1 Colleen: Ann. but if you’re interested. I don’t want to quibble. Ann: That sounds great! I don’t want this to affect our friendship.

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

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

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

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

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

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

000 two years ago. before someone else does. thus requiring greater concessions on both sides. and houses in this area sell fast. The worst first offer is the one that is so high or so low that the other party jumps on it immediately—known as the “Winner’s Curse.000 for a house that sold for $185.e.000. 2) Start out with an old number. particularly if you don’t know the other party’s “settlement range.) To prevent this from happening. because you have settled quickly.000 and $337. never give them their asking price. Sue: Let’s offer $325. Avoid giving away too much at the outset. or 3) Make an unrealistic offer (i. at minimum cost. and you cannot withdraw it in good faith. such as last year’s price. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure.000 three years ago). is the most (or least) the other side will accept. think things through before you make or accept the first offer. Jay: No. They found one they both like that lists for $325.” The perfect first offer. of course.000. then $320. Let’s low-ball them and offer $290.” (You have won a settlement. 86 50 Practical Negotiation Tactics . We don’t know how anxious they are to sell or if they know the market.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. offer $150. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. Their realtor told them that it sold for $290.000—what they paid for it. but you feel cursed because you gave away too much. The sellers must be willing to come down a few thousand … Sue: Well. The other party will probably come back with an equally ridiculous offer.000 this year. That’s a fair price. and that two similar ones on the same street sold for $330.000. which can be very useful).. Jay: No.

Both parties felt that they made a good deal.000 for each of us—$6.) Bob: I’d do it for $3. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. as requested by the human resource director.000.500—half the difference! Sue: Great. then let them make a counteroffer. Sue: Then you do it. 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. and the offer was based on fact: the prior negotiated price. Frank: Me too. Lyle Foxworthy. was very impressed with their presentation.Sue: Don’t be crazy. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. The buyers were very motivated to sell. That’s an insult! Jay: Well. as Sue had first suggested. (the next day …) Jay: They made us a counteroffer of $307. since they had already bought another house. If.000. the company president. (Bob and Frank meet privately to discuss the situation. Give us your lowest price. Exchanging Initial Offers 87 . they had offered $325. realizing they offered too much. but who knows what they are planning on offering.000 total. They outlined how they would develop a new employee performance-appraisal system. the sellers obviously would have accepted and Jay and Sue. I can’t tell our realtor $290.

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

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

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

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

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

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

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

$750 for lighting and $750 in the bank. which I’d like to keep in the bank.000! Brooks: Good. which takes another $3. We have $1.500 $2. and we both get things we want. that makes sense.500 left.200 $200–$2.500 $5. Can we split it evenly? Brooks: Okay. I’ll trade your sidewalk and trees for my whirlpool bath.000 $5.500 $500 $1.000 $2. Maureen: No. Making Counteroffers (The “Give and Take”) 95 . I’d like to spend some of it on lighting upgrades. These are all permanent immediate needs.000 $3.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.000 $1.000 $500 $1.# 1 Sod Item Cost $1.

Profit-Sharing 5. Wage Increase 4. This year. 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. both sides exchanged lists of initial demands at their first meeting. Pension Increase 3. Length of Contract 2. During that time. finally agreeing to split the difference on the remaining amount (distributive items).Conclusion By taking the time to list all the items each person wanted and their cost estimates. 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. All items to be negotiated and their desired outcome for each item were put in writing for review. The combined lists total thirteen different items: Desired Outcome No. even in difficult years. management and union negotiators found that a “winwin” approach to negotiations worked well. 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). Drug-Testing Program 96 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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”)


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

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

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

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

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

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

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

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

then the pension benefits overall will increase by $10. The company wants to trade paying for dependent coverage for better pension benefits.000.000.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000.000 a year over the next five years? Company: Yes. Over the last five years. The projections for the next five years were that these costs would increase to about $1. the company can make your pensions much better.000. what they really need is for you to cover the costs of dependent coverage. and are willing to keep pension benefits the same. with all wage and operations issues resolved fairly early. This is just a cash-flow problem that your members have to understand. that would be the minimum increase. dependent coverage could cost us $1.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. As best as we can tell. Company: This could not come at a worst time for us. Over the next five years. This would be a better benefit in the long run. But only a few of our people are close to retirement age.000 (which we reasonably should have expected to pay in premiums) in the pension account now. as it has always been. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. and we know that with this new contract term of five years.000. The pilots want dependent coverage paid for by the company.000 figure. 124 50 Practical Negotiation Tactics . The airline industry is in a slump. and the premiums for health care just keep going up. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. Pilots: Look. With long-term planning and investments. However. And we cannot afford that $1.000 to cover the premiums for dependent coverage. the airline paid a total of $200.000. you are taking a risk on the costs increasing. If we invest the $200. we know that health insurance premiums might skyrocket.

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

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

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

But that’s all! Then we’ll hook you up on Monday.00 per month.00 per month was far too much. Thanks. Yeah. What about the music package? Yes. That’s $5. The total is $38. and SI 1.99 per month. we had that before. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00! Why? Because he judged the per-slice price to be reasonable. That’s another $5. and my wife wants the old movies.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.00 a month. instead of one total amount. Any other kids’ channels? Yes. 2? How much? $8. 3. they asked about the Cartoon Network. Great. Okay. I really want the sports channels. but he agreed to six “salami slices” for a total of $38. Conclusion The owner thought his neighbor’s service at $39. Disney is for the kids! The sports channels are for me. 2.00. 128 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

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

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

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

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

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

) Dad: Now there’s no more fighting over the doll. and reached back for the doll. Finally. Susie: Daddy didn’t say anything about the shoes. Conclusion Dad’s use of a “surprise” tactic was extreme. Daddy said I got the doll on the way to Grandma’s house. charging that they breached their duty in their handling these funds. in fact. The local newspaper was prepared to urge the auditor to end the litigation. I think I have acted properly. The tactic was so successful. He grabbed it and threw it out the window. Dolly doesn’t need shoes on in the car. The auditor asked to meet with the editor to explain his position. he slowed down. She can have them later. (They continued to argue and whine and pinch each other. but nothing else up to that point was working. and that they had invested and spent the tax dollars wisely. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. Dolly has to have her shoes.Andrea: Give me the shoes back. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. to no avail. and I hope I can convince you of that. I want the shoes. Dad tried correcting them a few more times. The litigation itself had been going on for more than three years. Both Andrea and Susie were so shocked by their dad’s action. The defendants contended that the auditor’s actions were politically motivated. He initiated the litigation against the local school board members and several banks that invested the money for the board. that they never fought over a toy in the back seat of the car again!! Example 2 The editor of a local newspaper was planning on writing an editorial critical of a locally elected auditor who had filed a very nasty lawsuit. at great expense to the auditor’s office and the school board. so it was worth the risk. 144 50 Practical Negotiation Tactics . they didn’t say another word.

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

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

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

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

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


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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The owner. They believe it is overpriced.000. This offer is for more money than any four-bedroom houses on this neighborhood list.000. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. $235. $237. What? That’s $35.000. Sam Jones.000. $229. They sold for: $225.500. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.000. but you’ve priced it way too high. and we are countering with an offer of $250. Here’s a list of the five that are about the same size as yours. 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. (Next day) We’ve reviewed the records you’ve produced. Sometimes. has owned the house for 24 years and is downsizing to a condo.000 under the listing price! We realize that. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. but we feel that it’s a fair offer. I’ll get back to you.000. but the right facts presented at the right time can chill or astound and completely turn things around.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . the other party will ignore or refuse to believe the information. We love your house. but the key is to gather facts that you might need—not just the facts that you will need. and $237.

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

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

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

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

this process can easily result in a final settlement. When multiple issues are at stake and most have been agreed upon during negotiations. and the child learns an important lesson about life. When two parties believe they have an oral agreement. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. They bring it out when a dispute arises. 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. the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. T Reaching Agreement 177 . 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. hours. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. this tactic can produce an agreement. and the classic Walk Away (Tactic #48).Stage 7: Reaching Agreement he final stage! It might come minutes. If friends or neighbors need to settle something but prefer to avoid the negotiation process. or even months after the first offer is presented. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). In this process. days.

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

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

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

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

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

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

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

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

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

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

but I’d like to make sure there are no misunderstandings. he left the price at $150. look this over. The supervisor assured the employer that there was no basis for her complaint. all window blinds and drapes. he listed an attached hutch in the kitchen. real. he listed the stove.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. In her complaint. The supervisor pointed out that he had a staff of 20 or so women.) Seller: So. and that the problems with her job performance were. When he had the chance to put the deal in writing. It worked. since he probably would have missed them) Yes. that’s what I meant. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. the hutch. Bill: (pleasantly surprised to learn that the garbage disposal. and had been prepared to drop his price to $145. I think we can work something out. Under the section for appliances to be left on the property. in fact. Conclusion The seller had always intended to leave the garbage disposal. the house is yours. the hutch. a public agency. and the two area rugs were specifically included. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . (The seller recorded the offer of $150.000. and when she refused. and the two area rugs.000. If it’s what you meant. In the section for fixtures and miscellaneous items to be left on the property.Seller: Just a minute. Seller: Okay. Let me just get the standard “offer of sale” form and fill out what I hear you saying. and two area rugs. the refrigerator. then we have a deal. and the garbage disposal. Sign here. Example 2 Monica brought a sex discrimination charge against her employer. he began to have “problems” with her job performance. she said that her supervisor had repeatedly asked her out.

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

000. It was made clear that the employer had paid the additional $100.000.000 when all that was asked for was $100. I’ll take your offer back to her and let you know. to his disadvantage.She: authorized to pay $200. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000 just to get the employee to “withdraw” the complaint. 190 50 Practical Negotiation Tactics . There was a confidentiality agreement. Monica accepted the $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. but word did get out that a public agency paid $200.000 and the conditions of the offer.

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

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

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

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

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.

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

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

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

Personnel. The University of Nebraska-Omaha. During his academic career he has received awards for both outstanding research and teaching. He received his doctorate from the University of Kentucky. Carrell are in the fields of collective bargaining and labor relations. In addition. In addition to negotiating numerous litigation settlements and contracts. Books published by Dr. HR Magazine. Human Resource Management. he was elected to the City of Louisville Board of Aldermen for five terms. Labor Law Journal. The Personnel Administrator. The Journal of Accountancy Training. which is located in the greater Cincinnati area. and Public Personnel Management.A. Morehead State University. and served as President of the Board and Mayor Pro-tem for three terms. in Economics from the University of Louisville. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky.D. Bakersfield. Carrell has held academic positions at California State University. Business Forum. and the University of Louisville. and MBA and B. Dr. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . Personnel Journal. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. Organizational Behavior and Human Performance. Marshall University. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. The Academy of Management Review. M Christina Heavrin J.ABOUT THE AUTHORS ichael R. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. organizational behavior. Carrell is Dean of the College of Business at Northern Kentucky University. and negotiations.

a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. an agreement between the State of Kentucky. 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. 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. Jefferson County. Ms. 202 50 Practical Negotiation Tactics .park and a successful industrial park in the City’s enterprise zone. 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.

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