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

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

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

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

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

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

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

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

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

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

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

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

) Let’s take all our Beanie Babies to my house to trade! Okay. 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. (Think of the showroom tactics used by car dealers. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. Make up your minds. too. girls. they have the information they need at their fingertips. Mother: Hush. (thirty minutes later) Bailey: So. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. Bailey: Cybil: Preparation 21 .) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. it’s a deal. and go play somewhere! Cybil: Well … Okay. such as a hotel conference room. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. they control the breaks and environmental factors. and so on. the frog is everybody’s favorite. I like the frog. Cybil.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.

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

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

disagree on the need for that work or that they would have done it for less. Larry: That sounds fair. because (as Will pointed out) it wasn’t an apples-to-apples comparison. he used his financial expertise to analyze the investments of the college’s endowment fund. and decided to bring the matter up at a Board meeting. they would have had to revise the figures. 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. she had been investing the college’s endowment funds for many years. He was disappointed in the performance of the fund. I certainly didn’t mean to offend you. while she wasn’t an expert. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. The estimates would have been higher than what cousin Will charged. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. Comparing the estimates to Will’s actual costs would have been counterproductive. Had they actually prepared bids on the work. I’ll revise my bill to meet the lowest estimate you get. they said. Budget Officer: I don’t know what your problem is. From a look at the portfolio. Example 2 After Stuart was appointed to the college’s Board of Trustees. and no one had ever questioned her performance. Conclusion When the other plumbers looked at the work. they had to agree that their early estimates were low. The college’s budget officer was understandably offended. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics .

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. and its resources are limited. Stuart: Yes. Okay? Budget Officer: Okay. In this situation. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. I have a suggestion. but such a strategy also increases risk and costs more money to administer. because she did not have the background in investments necessary to trust such advice. Preparation 25 . but some of these stocks have really lost their value. I don’t question that they were sound at one time. I find that a more aggressive investment strategy produces a better return. At the end of two months. considering commissions and all. the college is a private institution. if both of them demonstrate a similar strategy and produce better results after expenses. I don’t want you directing how they’re going to go. Stuart: No problem.were stale. but I think they more than offset the gains. Now. Budget Officer: Yes. but we can ask them to plan and cost out each move. As you know. there might be increased risk and some expenses for commissions. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. then you and I can talk about changing our investment strategy. 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. 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.

Mother: That’s a large increase—and we just raised it last year! Shari: Well. Example 1 Shari. what else can I do. clean the whole house—should I continue? Shari: Whoa! I want to stay out longer—past my curfew of 10:00—not work more! Mother: Well. wash the cars. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. has asked her mother for a $10/week increase in her allowance. not on what you want to spend. It will cost me more than $10—about $35 per week. Once you both agree on the list of things to be negotiated. Shari: Well. and for going out with my friends. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . a sixteen-year-old who lives with her parents and three younger sisters. cut the grass. baby-sit your sisters. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. and ask the other party to add to the list. (2) a later curfew. (3) more chores. I need more money for clothes and CDs. Shari: I’m four years older than the next-oldest. not just an allowance increase! There is: (1) a $10 increase. You can’t treat me the same! Mother: Well—so we’re talking about several issues. if I give you an increase.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. your little sisters will want equal treatment. This strategy can build trust in the negotiation process itself. Mother: But your allowance is based on what you earn in your weekly chores.

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

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

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

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

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

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

” The agent took the offer to the seller. If there is a significant weakness in your position. but the inside was a complete turnoff. For example. 34 50 Practical Negotiation Tactics . and the buyer was able to completely renovate the house and still have a great deal. “Please make any offer—they are motivated!” The buyer responded. two people on the team will be more successful because they evoke different emotions from the other side. with “All right. By assuming opposing roles. I offer half the asking price. let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. The buyer loved the location. The agent explained that the seller was desperate. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). the seller’s agent called the buyer about the property. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). Weeks later. His teenage sons had “trashed” the house. The desperate owner agreed.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. half-serious. The buyer said he wasn’t interested.

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

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

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

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

I’ll go home and you can call me if you two can reach an agreement. Andy and Paula. Andy: No. threatening. etc. you’re really moving! I hate to see you leave.200! We should get $1. And take the leaf-catcher attachment and the gas can. we won’t need it at the new condo. I can use them. I don’t know what the deal is now. while another acts difficult. Peggy: Planning a Strategy 39 . Half what it cost us new.400 if the catcher and can are included. Peggy: I’m hearing one thing from Paula and another from Andy. They cost about $300.200. 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 assumed they went with the mower. Andy: I want them… Paula: Go ahead and take them. (bad guy) and implies that his or her side will hold firm on their demands. since they are sitting out in the driveway with it. not for $1. Andy: No. angry. so I’ll take it. and I know how you take care of things. what’s your price? Andy: $1. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Andy and Paula: Yes. Example 1 So. only three years ago. Peggy: That’s fair. I want to keep those. Peggy: So. I heard that you want to sell your riding mower. Peggy. Paula: Go ahead and ride it home.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one.

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

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

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

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

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

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. The owner told the employees that he was worried that during the overtime shifts. Working with fireworks is working with explosives. and that they should be asking for a fairer base wage for the work they do for you. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . and you just can’t be too careful. 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. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. They will be putting the plant AND their fellow workers at risk by not being here. that’s just not fair. On those overtime shifts. and it’s not what we’re even talking about. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. lesssenior employees might be at greater risk of injury because they have to handle explosives. The employees’ negotiator finally decided to use “indignation” to break the stalemate. I’ve got to have the employees with the most experience to protect this place. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. Owner: Now. and it’s getting old. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees.

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

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

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

Conclusion Both parties wanted to keep the business. Bobby. your bid is $190 million. Agreed. Abe. Bobby was willing to pay more than Abe to remain sole owner. you agree to sell your half-interest to Bobby for $180 million. but only if they could become the sole owner. I will arrange to sell him my half-interest for $180 million. your bid is $170 million. 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. And I will arrange financing to pay you $180 million to become sole owner. and both men had carefully estimated the market value of half the business.Howard: Abe: Bobby: Abe. 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 to close within ninety days. Planning a Strategy 49 .

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

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

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

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

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

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

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

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

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

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

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

quick agreement. Carrell and Christina Heavrin. 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.000) Settlement Range ($22. for example.500) M $21. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. such as proposing to continue at the current rate or price. Another common strategy is to start with the status quo. Exchanging Initial Offers 61 .500) Resistance Point ($25. The negotiator firmly states that it is their best offer in an attempt to gain a nice. (2004). 2: Distributive Bargaining Process. 190–192. Adapted from Labor Relations and Collective Bargaining.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. None is as important as the first one. This is a practical starting point that will not anger the other side (and might even be expected). Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).500) Fig.000 Buyer Initial Offer ($21. by Michael R. “Distributive” bargaining (“win-lose” or “zero sum”) is used.750–$25.000 22 23 24 25 26 27 Initial Offer $28. as illustrated in the following figure: Seller Resistance Point ($22.750) Target Point ($24.000) Target Point ($23. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.

The settlement range is the distance between the resistance points. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. usually. if the buyer’s initial offer was $25.000) is reasonable. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). 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). When the two parties agree to a price within the range. A target point is the desired settlement value a party has set as a goal when negotiations begin.In this example. After initial offers are exchanged. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. thus producing a true “win-win” negotiation. it is termed the settlement point – not the “right price” or “fair price. You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. and is the range in which most negotiations actually occur. 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). each initial offer ($21.” but the settlement price. 62 50 Practical Negotiation Tactics . In the example. the other side does not agree to this value). these points have set the outer limits. thus starting out on a positive note. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse.000 and $28. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. See Tactic #18: Agree on Something As Soon As You Can.000. the process quickly narrows to the range between the initial offers.

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

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

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

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. The tuition benefits will encourage the workers to be prepared for new job opportunities. 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. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. With the cost of college educations so high. The union’s lead negotiator misunderstood the proposal. 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. Tuition in place of health insurances? They’ll think I’ve lost my mind. 66 50 Practical Negotiation Tactics . and the following conversation occurred. it’s a good proposal. The company’s negotiator didn’t recognize the misunderstanding. Union negotiator #2: Please—just a moment outside.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. Union: (angrily) I’m not presenting this proposal to my people. What is this. A lot of employees have spouses who can get health insurance coverage through their work.

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

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

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

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

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. Autumn and Angela. In addition. The house and much of the furniture has been in the Exchanging Initial Offers 71 . Anne: As I see it. realizing that the total cost of a deal might make or break the agreement. the antiques. and a collection of antique furniture. When the girls decided it was time to talk about the estate. Example 1 When their mother died at age 82. their mom left specific pieces of jewelry and art in the will to each of the girls. we need to sell the house. can indicate that something you think is minor is really a major concern to your opponent. along with the cash. A reluctance to include one particular financial item with other financial issues. The estate’s assets included a checking and savings account totaling $450. The house was closed up at the time of their mother’s death because she had been in a nursing facility for a couple of months. for example. they met at the house. a house valued at $250. three ways. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. For example. 300 shares of stock in a pharmaceutical company. it is often helpful to package the items in distinct groups and then deal with each package separately. one might package all of the financial issues in one group and negotiate on that package as one issue. Anne and her sisters. and the stock and distribute the proceeds. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. but I’d like to talk about the house and the furniture.000.000 with no mortgage on it. were faced with the task of selling the house and disposing of their mom’s personal belongings.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sue: Let’s offer $325. Jay: No.000 three years ago). 86 50 Practical Negotiation Tactics . We don’t know how anxious they are to sell or if they know the market.e. and houses in this area sell fast.. 2) Start out with an old number.000 this year.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. That’s a fair price. and you cannot withdraw it in good faith. before someone else does. Jay: No. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.000 for a house that sold for $185.) To prevent this from happening. of course. Avoid giving away too much at the outset. then $320. thus requiring greater concessions on both sides. or 3) Make an unrealistic offer (i. particularly if you don’t know the other party’s “settlement range.” The perfect first offer. 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. offer $150. think things through before you make or accept the first offer.000 two years ago. Let’s low-ball them and offer $290. The worst first offer is the one that is so high or so low that the other party jumps on it immediately—known as the “Winner’s Curse. Their realtor told them that it sold for $290. because you have settled quickly. such as last year’s price. at minimum cost.000—what they paid for it. but you feel cursed because you gave away too much.000. never give them their asking price.000 and $337.000.000. is the most (or least) the other side will accept. The other party will probably come back with an equally ridiculous offer. They found one they both like that lists for $325.” (You have won a settlement. and that two similar ones on the same street sold for $330. which can be very useful). The sellers must be willing to come down a few thousand … Sue: Well.

(Bob and Frank meet privately to discuss the situation. Give us your lowest price. as requested by the human resource director. Lyle Foxworthy.Sue: Don’t be crazy. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company.) Bob: I’d do it for $3.500—half the difference! Sue: Great.000. The buyers were very motivated to sell. (the next day …) Jay: They made us a counteroffer of $307. they had offered $325.000. as Sue had first suggested. the company president. but who knows what they are planning on offering. then let them make a counteroffer. the sellers obviously would have accepted and Jay and Sue. since they had already bought another house. was very impressed with their presentation.000 total. I can’t tell our realtor $290. If. Exchanging Initial Offers 87 . Sue: Then you do it. and the offer was based on fact: the prior negotiated price.000 for each of us—$6. They outlined how they would develop a new employee performance-appraisal system. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. That’s an insult! Jay: Well. Frank: Me too. Both parties felt that they made a good deal. realizing they offered too much.

) Lyle: Okay. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. Lyle: Okay. 88 50 Practical Negotiation Tactics . I’m out of time. but we know you must have an amount budgeted for this and we are willing to do it for that amount.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room.000) their minimum price of $6. and you two come highly recommended. That is all that’s left in this year’s training budget. Bob: That’s fair. What’s the cost? Bob: We want the job. but we can’t pay more than $18. We’ve waited long enough. and it would not apply.000. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. We’ll do the job. They also ended up getting three times ($18.000.

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

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

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

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

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

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

which takes another $3. which I’d like to keep in the bank.500 $5.200 $200–$2. We have $1. Can we split it evenly? Brooks: Okay.500 $500 $1.000 $1.000 $2.000 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. These are all permanent immediate needs. I’d like to spend some of it on lighting upgrades.000! Brooks: Good.000 $5. Maureen: No.500 left.500 $2.000 $3. Making Counteroffers (The “Give and Take”) 95 . I’ll trade your sidewalk and trees for my whirlpool bath. and we both get things we want. that makes sense. $750 for lighting and $750 in the bank.000 $500 $1.# 1 Sod Item Cost $1.

both sides exchanged lists of initial demands at their first meeting. This year. All items to be negotiated and their desired outcome for each item were put in writing for review. 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). Profit-Sharing 5.Conclusion By taking the time to list all the items each person wanted and their cost estimates. Pension Increase 3. 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. finally agreeing to split the difference on the remaining amount (distributive items). Length of Contract 2. Wage Increase 4. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. management and union negotiators found that a “winwin” approach to negotiations worked well. even in difficult years. The combined lists total thirteen different items: Desired Outcome No. During that time. Drug-Testing Program 96 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Okay. Thanks. Yeah. 128 50 Practical Negotiation Tactics . 2? How much? $8.00 a month.00! Why? Because he judged the per-slice price to be reasonable. instead of one total amount.99 per month. 3.00 per month was far too much. 2. That’s another $5.00. and probably felt much better about the total negotiated package because it was presented in modest individual slices. we had that before. they asked about the Cartoon Network. But that’s all! Then we’ll hook you up on Monday. Conclusion The owner thought his neighbor’s service at $39.00 per month. but he agreed to six “salami slices” for a total of $38. I really want the sports channels.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Any other kids’ channels? Yes. Disney is for the kids! The sports channels are for me. The total is $38. That’s $5. What about the music package? Yes. Great. and my wife wants the old movies. and SI 1.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I’ll get back to you. 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. Here’s a list of the five that are about the same size as yours. This offer is for more money than any four-bedroom houses on this neighborhood list.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. $229.000. but the key is to gather facts that you might need—not just the facts that you will need. the other party will ignore or refuse to believe the information.000.000 under the listing price! We realize that. The owner.000. but the right facts presented at the right time can chill or astound and completely turn things around. We love your house. They believe it is overpriced. but you’ve priced it way too high. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . $237.000. They sold for: $225. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000.500. and we are countering with an offer of $250. (Next day) We’ve reviewed the records you’ve produced. and $237.000. has owned the house for 24 years and is downsizing to a condo. but we feel that it’s a fair offer. What? That’s $35. Sam Jones.000. Sometimes. $235.

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

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

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

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

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

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

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

The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. 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. 180 50 Practical Negotiation Tactics . knowing that it will probably be agreed to in order to continue in the euphoria of the moment.

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

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

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

Six months later. but they wanted to give Jenny $500 for her “share” of the machine. Jenny told them to sell it. I won’t take it. We have a few dollars invested in parts and we had fun working on it. Example 1 Jenny and Lynne are sisters. In final offer arbitration. In arbitration. Jenny: No. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. 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). Jenny has an antique Singer sewing machine. Lynne: No. Lynne responded that this was their intention. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. Lynne told Jenny that she and her husband Gary have restored two other Singers. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Let’s split the money. which she has kept in a barn for over ten years. 184 50 Practical Negotiation Tactics . so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. Keep the $1. I offered it to you for nothing.000. Each party wants their offer chosen. In mediation. In most arbitrations. They inform her that they put the machine on e-Bay and have an offer of $1.000. and would be able to restore hers as well.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. One day Lynne dropped by for a visit and the discussion turned to the old Singer. That was the deal. Both involve the use of third parties who are objective. the arbitrator is given the authority to make the parties comply with the final and binding decision. which is generally voluntary. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. both sides have agreed in writing to accept the arbitrator’s decision.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ms. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 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. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs.park and a successful industrial park in the City’s enterprise zone. 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. an agreement between the State of Kentucky. 202 50 Practical Negotiation Tactics . Jefferson County. the City and a for-profit hospital for guaranteed indigent health care services for city residents.

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