SECTION I: INTRODUCTION

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

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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.

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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

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

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

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

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

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

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

Information.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 .

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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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.

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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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Each time. Carol wants $160. The market hasn’t gone up that much in six years. one buyer shows some interest. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. Your demand should be high enough to give you room to compromise. but the redecorating is of little value. You are not likely to get more than you request. and then look at the demand from your opponent’s perspective. And I don’t see a lot of difference in the neighborhood. We also think that the neighborhood has improved over the last few years.000. six years ago you bought it for $60.000. Planning a Strategy 35 . After all. but quite frankly. She has had it on and off the market for the last five years. it is likely that your opponent will.000. so think this through well ahead of time. Buyer: We really like the house. Anyone buying the house would want to change wall colors or add new carpets. and just refuses to reduce it. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Carol: Maybe not. Finally. Be realistic. but we simply can’t take less than $160. we think $160.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. your request must not be so low that the other party concludes that you are not negotiating in good faith. but not so high as to end the negotiations before they begin.000 is very high. Carol: We really want to sell. If you consider the demand ridiculous. It’s a good neighborhood. However. but certainly not exceptional in any way. First. Surely there’s some flexibility in your asking price. but the house has increased in value. as well. so do not underestimate what you might be able to achieve. with no success. Buyer: The air conditioning might have increased the value of the house. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.000) Settlement Range ($22.500) M $21. (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. The negotiator firmly states that it is their best offer in an attempt to gain a nice.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. by Michael R.500) Resistance Point ($25. 2: Distributive Bargaining Process. Another common strategy is to start with the status quo. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). as illustrated in the following figure: Seller Resistance Point ($22. quick agreement.750) Target Point ($24. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. Exchanging Initial Offers 61 . such as proposing to continue at the current rate or price. 190–192. Carrell and Christina Heavrin. “Distributive” bargaining (“win-lose” or “zero sum”) is used.000) Target Point ($23. Adapted from Labor Relations and Collective Bargaining. This is a practical starting point that will not anger the other side (and might even be expected).000 22 23 24 25 26 27 Initial Offer $28.750–$25. 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 initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.000 Buyer Initial Offer ($21.500) Fig. for example. None is as important as the first one.

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

the negotiations got out of hand when Shelly’s dad forgot what had been decided. a caucus can be used as a break to calm the situation down. 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. If the team is feeling pressure to concede on certain items. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. Shelly. There are many ways to use this strategy. A caucus gives you an opportunity to work out problems with your own team in private. You can invite up to 20 of your friends. and I already have 25 names. make use of the opportunity to call for a caucus. so her parents sat down with their daughter to discuss the details. If the negotiations are heated. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private.m. Mom: We’re planning on having your party here on Saturday night. We don’t want it to be a late evening. or if a member takes on a role in the negotiations that has not been assigned to them. 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. If the negotiations have suddenly gone in an unanticipated direction. so we’ll have the party from 7:00 p.Tactic 15: Caucus If you are part of a negotiating team. Shelly: Twenty friends? You’re kidding! I’ve just started on my list.–10:00 p. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. Her mom and dad had already talked about it privately. because it might disturb the neighbors. Unfortunately.m. and presumably had an agreement. If negotiations seem stalled. We’ll just have chips and soda. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . Example 1 Shelly’s “Sweet Sixteen” party was coming up.

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

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

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

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

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

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

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

Autumn and Angela. Anne and her sisters. When the girls decided it was time to talk about the estate. can indicate that something you think is minor is really a major concern to your opponent.000. The estate’s assets included a checking and savings account totaling $450. along with the cash. and a collection of antique furniture. one might package all of the financial issues in one group and negotiate on that package as one issue. Anne: As I see it.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. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. they met at the house. 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. a house valued at $250.000 with no mortgage on it. In addition. but I’d like to talk about the house and the furniture. we need to sell the house. 300 shares of stock in a pharmaceutical company. Example 1 When their mother died at age 82. realizing that the total cost of a deal might make or break the agreement. and the stock and distribute the proceeds. for example. were faced with the task of selling the house and disposing of their mom’s personal belongings. the antiques. A reluctance to include one particular financial item with other financial issues. 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. three ways. For example. it is often helpful to package the items in distinct groups and then deal with each package separately. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. The house and much of the furniture has been in the Exchanging Initial Offers 71 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

.000—what they paid for it.000. at minimum cost. because you have settled quickly. The sellers must be willing to come down a few thousand … Sue: Well. of course.” (You have won a settlement. Sue: Let’s offer $325. and you cannot withdraw it in good faith.000 two years ago. and houses in this area sell fast.000 for a house that sold for $185. such as last year’s price. 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. 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. Jay: No. They found one they both like that lists for $325.000. That’s a fair price. then $320. Their realtor told them that it sold for $290. or 3) Make an unrealistic offer (i. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. Jay: No. The other party will probably come back with an equally ridiculous offer.000. thus requiring greater concessions on both sides. 86 50 Practical Negotiation Tactics .” The perfect first offer.000 three years ago).) To prevent this from happening.000 this year. Avoid giving away too much at the outset. but you feel cursed because you gave away too much. We don’t know how anxious they are to sell or if they know the market.e. before someone else does. which can be very useful). Let’s low-ball them and offer $290. particularly if you don’t know the other party’s “settlement range. is the most (or least) the other side will accept.000 and $337. never give them their asking price.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. offer $150. think things through before you make or accept the first offer. 2) Start out with an old number. and that two similar ones on the same street sold for $330.

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

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

Experienced negotiators seldom reveal their exact priorities and objectives. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Skilled negotiators such as salespeople. in fact.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. T Making Counteroffers (The “Give and Take”) 89 . because if you do not at least appear to be flexible. 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. which would most likely weaken their position (see Tactic #26: Keeping Secrets). Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. what appears to be an outer limit of the settlement range when the process starts can. seeing no common ground. be enlarged (see Tactic #27: Expanding the Pie). is likely to pull away from the table. 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. do not dismiss it because it is not all you want. One or more parts might be acceptable or indicate movement from their previous positions. and do not flatly reject it because it is not your offer. which is often the case. 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. In some negotiation situations. but possibly of different values to your opponent. Also. carefully evaluate an opponent’s offer. Instead. the other party. When the other party makes an offer. labor negotiators. It has often been said that the key to negotiations is to be flexible (see Tactic #25). and attorneys use tried and true tactics in giving and receiving offers. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert).

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

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

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

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

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

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.500 left. Can we split it evenly? Brooks: Okay.500 $5.000 $500 $1. which I’d like to keep in the bank.000 $5.500 $500 $1. Making Counteroffers (The “Give and Take”) 95 .500 $2. and we both get things we want. These are all permanent immediate needs.000 $3. We have $1. Maureen: No.# 1 Sod Item Cost $1. which takes another $3.000! Brooks: Good.000 $1.000 $2. $750 for lighting and $750 in the bank. I’ll trade your sidewalk and trees for my whirlpool bath. that makes sense. I’d like to spend some of it on lighting upgrades.200 $200–$2.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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.

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

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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-

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

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

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

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

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

I’ll go back and tell Madame Mayor your position. I don’t know what her reaction will be. Conclusion By remaining silent. Making Counteroffers (The “Give and Take”) 121 . the Town Council representative’s position prevailed. the Town Council’s representative left the mayor’s representative with no room to maneuver. 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. In the end. and the agreement was renewed with no new provisions. He either had to end the session or figure out what to say to reengage the other side. I hate not to attempt to add some additional areas to the agreement. Mayor’s representative: Well. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well.represents have to worry that her desire to switch governments might taint the negotiations. 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: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued.

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

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

what they really need is for you to cover the costs of dependent coverage. you are taking a risk on the costs increasing.000.000. With long-term planning and investments. that would be the minimum increase.000 (which we reasonably should have expected to pay in premiums) in the pension account now. Pilots: Look. And we cannot afford that $1. This would be a better benefit in the long run. The pilots want dependent coverage paid for by the company. The projections for the next five years were that these costs would increase to about $1.000 to cover the premiums for dependent coverage. with all wage and operations issues resolved fairly early. As best as we can tell.000. Over the next five years. If we invest the $200. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000. dependent coverage could cost us $1. and are willing to keep pension benefits the same. But only a few of our people are close to retirement age. This is just a cash-flow problem that your members have to understand. 124 50 Practical Negotiation Tactics . However. Over the last five years. Everyone was afraid that the dispute would cause an impasse and a possible strike. and we know that with this new contract term of five years. the company can make your pensions much better. the airline paid a total of $200.000. and the premiums for health care just keep going up. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.000 a year over the next five years? Company: Yes. The airline industry is in a slump. Company: This could not come at a worst time for us. then the pension benefits overall will increase by $10.000 figure.000. as it has always been.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. we know that health insurance premiums might skyrocket. The company wants to trade paying for dependent coverage for better pension benefits.000.

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

If you are on the receiving end of such a tactic.” and “low monthly rates” are examples of the salami tactic.000 for a Volvo? I bought the one I’m driving for $19.500! Saleswoman: Yes. I guess it would be around $600 per month. Example 1 Car buyer: What. I recall the day you drove it out of here. Buyer: Way too much! Saleswoman: Well. do you want to look at something else? Buyer: No.” “affordable weekly payments. what monthly payment did you have in mind? Buyer: More like $300 per month.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party. Saleswoman: I’ll be right back. Buyer: Yes. it’s a deal? 126 50 Practical Negotiation Tactics .Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. and compare it to your strategic objective. I love this car.000 car. $45. be sure to add up the total cost. Phrases such as “for only pennies a day. if I can give you this car with a $300 monthly payment.… (20 minutes later) Saleswoman: So. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. I just can’t imagine the monthly payment on a $45. Saleswoman: With your 740 in trade. but that was several years ago.

Buyer: I don’t see how you can do that. I can afford $6. but what else must I buy? Only the basic service for $8.99 per month. But my neighbor pays $39.000 price into “slices” the buyer thought reasonable. Sure. I can’t discuss another client’s account. You can do that. you can get the Disney channel for only $5.” She decided to cut the $45. and added the trade-in.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. with your car and $6.” she had him—she worked around the $300 slices. and payout slices to reach the total price she wanted. Let’s see. do you want HBO? How much? $5. do you want Disney? Yes. as promised. can’t you? Buyer: Yes. Once the buyer volunteered that $300 was an affordable “slice. Making Counteroffers (The “Give and Take”) 127 . I can’t afford that much.00 per month. it will be a five-year lease. Instead of a three-year lease.000 down.00 per month for your service. (looks at the numbers) That looks good. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. down payment. Great! So. Saleswoman: Simple.00 per month. but let me see the numbers.

I really want the sports channels. but he agreed to six “salami slices” for a total of $38.99 per month. we had that before.00 a month.00! Why? Because he judged the per-slice price to be reasonable. 2. The total is $38. 2? How much? $8. What about the music package? Yes.00 per month was far too much. That’s another $5. Thanks.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. they asked about the Cartoon Network. Okay. and SI 1.00. 3. Yeah. But that’s all! Then we’ll hook you up on Monday. 128 50 Practical Negotiation Tactics . Conclusion The owner thought his neighbor’s service at $39. Great. and my wife wants the old movies. That’s $5.00 per month. Any other kids’ channels? Yes. instead of one total amount. Disney is for the kids! The sports channels are for me. and probably felt much better about the total negotiated package because it was presented in modest individual slices.

m. the traditional car salesperson might tell the buyer. but in tense. today. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. but it can be used effectively when one party clearly has an edge. “I can only guarantee this price until 6:00 p. In some cases. and the use of humor. however. For example. which can be successful if the opposing team has two or more members who hold different views of an issue. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. When both sides believe that each has equally strong positions. angry negotiations. Applying Pressure 129 . turned off by the tactic.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. but others will walk out the door. It should be used with caution: It can end negotiations immediately. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). Tactic #33 (The Bluff) is a classic pressure tactic. 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. pressure tactics should probably be avoided. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). and it can destroy your credibility. it is effective. Humor might not look like pressure. so are you ready to make a deal? This might convince a few buyers.

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

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

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

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

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

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

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

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

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

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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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

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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.

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

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

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

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

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

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

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

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

Example 1 Susan. 162 50 Practical Negotiation Tactics . but Susan had only $20. Jones’s supervisor. Alexis agreed. Susan repeated her demand. They might worry that the tapes will be made public or given to others. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Michael Wood. South Carolina. age 15. thus becoming a source of embarrassment. Alexis knew this was not fair. Somehow. Conclusion For the first time in her life. the younger sister. the investigator. The two sisters had saved up a little money so that they could buy souvenirs. and Jones. Then he played the tape.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. or used to pressure the other side to agree to certain demands. the accused. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. She borrowed a tape recorder so she could ask her father if this was a fair deal. age 14. and Alexis. or simply “bad faith” methods have been used by the other party. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Susan understood the impact a tape recording can have when it reveals a lie. are talking about a possible settlement of the issue. this time in front of a hidden recorder. Susan denied it. The effect on the other party might be even more substantial if lies. Alexis. threats. Alexis then played the tape for her father. were on vacation with their parents in Myrtle Beach. Fred Adams. had $40. He asked his elder daughter about the arrangement.00.00 to spend. until Susan said they would evenly split what they bought. who was disappointed to hear that she might propose such a deal.

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

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

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

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

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

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

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

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

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

and we are countering with an offer of $250. the other party will ignore or refuse to believe the information. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. They believe it is overpriced. but the right facts presented at the right time can chill or astound and completely turn things around. $235. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. has owned the house for 24 years and is downsizing to a condo. Sam Jones. Sometimes. This offer is for more money than any four-bedroom houses on this neighborhood list. but the key is to gather facts that you might need—not just the facts that you will need.000. $237. We love your house.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000. (Next day) We’ve reviewed the records you’ve produced. What? That’s $35. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Here’s a list of the five that are about the same size as yours.500.000.000.000. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. I’ll get back to you. $229. They sold for: $225. The owner. and $237.000 under the listing price! We realize that. but we feel that it’s a fair offer. but you’ve priced it way too high.

I asked for a list of all new PCs bought this year. No one can go over $1. and did his homework. We accept. Well… We have a written counter of $245.400 each. He found facts that supported his position.600 for a computer.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. who was not particularly knoledgeable about real estate. I’ll be… Okay. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. Making Progress 173 . Hatfield: While I was at purchasing. Order the new computers. Example 2 Supervisor: You know the policy. You can’t pay more than $1. if other departments have ignored the policy. We’ve talked with purchasing and we have the authority to buy seven for $2.600 unless the company president approves. Supervisor: If I okay this purchase order. let’s not worry about it.000 each. That’s the bottom price. and we know that only this model will meet our needs. Here it is. Supervisor: Well. I’ll get called on the carpet.000. and wisely chose exactly when to present them in order to make his point. Hatfield: My staff has done a lot of research. Conclusion Hatfield had anticipated what his supervisor’s position would be. The last 20 were over $2. Conclusion The Joneses had based their asking price on the advice of a friend.

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

Jay. I couldn’t find anyone who knew it. and they don’t even have a use for the sales data. Babu. (Next day) Do you have the policy about giving out product sales information? No. They say it’s a security issue. What’s the policy number or date of approval? I don’t know.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. Why? Some policy? Yes. but it’s because you don’t have access clearance. Mary. Making Progress 175 . we can’t do that. are you sure I can’t get your information technology people to give us direct information on product sales? No. and Kenzie. Security? Right. Sue. Mary and Kenzie? They are 2-3 pay grades below us. Brooks. 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. If that data ended up in the wrong hands. Can you get me the number? Sure. Who does have access clearance? Mike. it could kill us.

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

and the child learns an important lesson about life. hours. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. If friends or neighbors need to settle something but prefer to avoid the negotiation process. In this process. 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). this process can easily result in a final settlement. days. this tactic can produce an agreement. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. 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. and the classic Walk Away (Tactic #48). They bring it out when a dispute arises. When multiple issues are at stake and most have been agreed upon during negotiations. 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. 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. T Reaching Agreement 177 . When two parties believe they have an oral agreement.Stage 7: Reaching Agreement he final stage! It might come minutes. or even months after the first offer is presented. 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. 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.

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

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

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

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

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

(Judy and Larry walk into the back room and close the door. I still want to develop this block. You rejected it. and we gave you our price. and he is offering us $4. In reality. Judy: Larry. and I’m not interested in less. go back to your office.both of them love their store. Michael Roberts. they were prepared to accept $5. Larry: Michael. which the Bizannes accept.5 million. our accountant said it’s worth $6 million. come out here! (Judy comes out from the back room. He met with Bizannes twice before. One day.5 million.0 million. you’ve already told us that. a local developer. Michael: Good morning. and I only need your building to own it. Michael: I have a check right here for 4. so why are you here? Michael: I’ve discussed it with my partners. Reaching Agreement 183 . after no contact from Larry or Judy. Larry.) 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. How’s business? Larry: Great! I’m surprised to see you again. Larry: Judy.5 million for the building. What do you think? Judy: Larry. and I’m prepared to offer you $4. Larry: Yes. but their continued walkout convinced Michael that they would hold firm.) Larry: Michael is here again. Michael: Well. let’s eat lunch. Two months later. visited their store. with a certified check. today. Larry. Michael calls on them again with a check for $5.5 million.

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

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

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

Bill and Paulette fell in love with the house. we won’t be involving our real estate agent. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. We’d like to make you an offer of $150. everyone is busy grappling with the details of the negotiations. Obviously.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. and felt that they would have to work fast to make an offer before someone else did. The owners were selling the house without a real estate agent. They saw the “For Sale” and “Open House” signs. 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. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. During a discussion.000. and while Bill and Paulette had been using an agent to help locate houses. all the usual stuff in a sale. Example 1 Bill and Paulette had been house-hunting for some time. If we shake hands on it right now. and one of the other couples looked very interested. Bill: Reaching Agreement 187 . Bill pulled the seller aside. and decided to stop by to see if they liked the house. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. At the very least. they looked at this particular house on their own. They finally looked at a house they really liked. They were not the only couple to come to the open house.000. Seller: We’re asking $152. Seller: Yes. however. not the furniture.

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

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

190 50 Practical Negotiation Tactics .She: authorized to pay $200.000 just to get the employee to “withdraw” the complaint.000. It was made clear that the employer had paid the additional $100.000. to his disadvantage.000 and the conditions of the offer.000 when all that was asked for was $100. There was a confidentiality agreement. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. 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. I’ll take your offer back to her and let you know. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. Monica accepted the $200. but word did get out that a public agency paid $200.

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

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

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

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

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

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

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

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

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

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

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. an agreement between the State of Kentucky. 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. Ms.park and a successful industrial park in the City’s enterprise zone. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 202 50 Practical Negotiation Tactics . the City and a for-profit hospital for guaranteed indigent health care services for city residents. 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.

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