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.

Introduction

1

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.

2

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

Introduction

3

But if you scored 8 or less. Who. exactly. such as these: • You receive the wrong order at a restaurant. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. accept what is given. practical tactics useful in real-life situations at work or at home. they pay the sticker price. few people understand that normal interactions represent bargaining opportunities. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. Unfortunately. 4 50 Practical Negotiation Tactics . • A co-worker asks for volunteers for a new project. at a flea market. some will in retrospect even remember being the victim of one or two of them. • A child wants a new toy now. or engage in an unproductive argument. with family members.negotiator! Pass this book on to someone else who needs it. with neighbors. Most readers will no doubt recognize some of these strategies. 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. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. but many of us miss the opportunity to bargain in other situations. Instead.

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

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

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

This page intentionally left blank .

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

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

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

This page intentionally left blank

SECTION III: 50 TACTICS FOR SUCCESS

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

I

Preparation

13

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.

14

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.

Preparation

15

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This page intentionally left blank .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

500) Fig. such as proposing to continue at the current rate or price. (2004). Adapted from Labor Relations and Collective Bargaining. for example.000) Target Point ($23. Carrell and Christina Heavrin. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Exchanging Initial Offers 61 . Another common strategy is to start with the status quo. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). as illustrated in the following figure: Seller Resistance Point ($22.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. 190–192.000 Buyer Initial Offer ($21. The negotiator firmly states that it is their best offer in an attempt to gain a nice. “Distributive” bargaining (“win-lose” or “zero sum”) is used. 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. This is a practical starting point that will not anger the other side (and might even be expected).750) Target Point ($24. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse.000 22 23 24 25 26 27 Initial Offer $28. 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.500) Resistance Point ($25.500) M $21. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. by Michael R.750–$25.000) Settlement Range ($22. 2: Distributive Bargaining Process. quick agreement. None is as important as the first one.

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

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

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

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

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

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

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

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

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

Anne: As I see it. The estate’s assets included a checking and savings account totaling $450. Example 1 When their mother died at age 82.000.000 with no mortgage on it. 300 shares of stock in a pharmaceutical company. For example. were faced with the task of selling the house and disposing of their mom’s personal belongings. In addition. for example. 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. we need to sell the house. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. one might package all of the financial issues in one group and negotiate on that package as one issue. When the girls decided it was time to talk about the estate. they met at the house. their mom left specific pieces of jewelry and art in the will to each of the girls. it is often helpful to package the items in distinct groups and then deal with each package separately. Autumn and Angela. three ways. realizing that the total cost of a deal might make or break the agreement. the antiques.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. a house valued at $250. A reluctance to include one particular financial item with other financial issues. Anne and her sisters. and a collection of antique furniture. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. can indicate that something you think is minor is really a major concern to your opponent. and the stock and distribute the proceeds. but I’d like to talk about the house and the furniture. along with the cash. 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. The house and much of the furniture has been in the Exchanging Initial Offers 71 .

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

tuition benefits. and the assignment of the limited number of parking spaces. what kind of paid leaves there will be (personal. The third: Ben- Exchanging Initial Offers 73 . Employees: We’ve got a lot of items to cover. and establishing a work schedule to accommodate evening and weekend clients. etc. The following tasks needed to be a accomplished: establishing basic pay schedules. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. the jewelry. Several issues also needed to be addressed: the ability of employees to move up through the organization. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. sick. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. deciding whether there would be annual wage increases as well as merit increases. Angela: That’s fine.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. vacation. and the art works—will be more difficult. health benefits. including benefits for partners in non-traditional relationships.). The second: working conditions (work schedules and promotional opportunities). May I suggest that we divide the items into three areas. The negotiations on the other items—the house. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). the antiques. funeral. Anne: Same with me. but I’m making no commitment to trade.

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

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

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

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

at its financial risk. If we don’t make the deadline. They also agreed that if the investigations are not conclusive. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged.m. XYZ: Okay. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. Having reached an amiable solution to the immediate problem.XYZ: Agreed. The artwork was not damaged while in our control. regardless of where the original three artworks were damaged. You can’t just ignore us. that’s okay with me if it’s okay with XYZ. WeCanShipArt: Wait a minute. generated a like offer from WeCanShipArt and a reasonable response from XYZ. I can’t see how I can refuse that. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. and if word gets out that you think it was. Now. And we’ll eat the cost of shipping. 78 50 Practical Negotiation Tactics . how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. we’re ruined. they will split the cost of the three damaged pieces three ways. ABC: 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. I don’t want to quibble.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. We plan to put an ad in the paper next week. we paid $5.000 for it six years ago. 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. You must mean what you say and be prepared to walk away from an unacceptable offer. Ann: Well. we’ll sell it to you. I don’t have any idea. consider using the “First and Best” tactic. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. The “first and best” tactic enabled them to settle the matter easily. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. Ann: That sounds great! I don’t want this to affect our friendship. Exchanging Initial Offers 79 . no hard feelings either way. Example 1 Colleen: Ann. and even more hours in the fall picking up leaves. we plan on selling our Ford tractor when we move. Okay? No quibbling. and it came with the bush hog and the leaf pick-up. Ann: Thanks! We really need one. Why don’t you give me a price? Colleen: Oh. period. but if you’re interested. Jeff spends many hours mowing the yard every week. I know you and Jeff said you’d like one because you have about five acres. What do you want for it? Colleen: Well.

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

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

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

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

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

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

000 two years ago. 2) Start out with an old number. Their realtor told them that it sold for $290. or 3) Make an unrealistic offer (i. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. think things through before you make or accept the first offer.) To prevent this from happening. at minimum cost. 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.. particularly if you don’t know the other party’s “settlement range.e.000. The sellers must be willing to come down a few thousand … Sue: Well.000. which can be very useful). but you feel cursed because you gave away too much. They found one they both like that lists for $325. Sue: Let’s offer $325.000 three years ago). 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.” The perfect first offer. That’s a fair price. and that two similar ones on the same street sold for $330. thus requiring greater concessions on both sides. and you cannot withdraw it in good faith. Jay: No.000—what they paid for it. of course. Jay: No. then $320.000 this year. Let’s low-ball them and offer $290.000 and $337. before someone else does. because you have settled quickly. Avoid giving away too much at the outset. The other party will probably come back with an equally ridiculous offer.000.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.” (You have won a settlement. never give them their asking price. We don’t know how anxious they are to sell or if they know the market. such as last year’s price. 86 50 Practical Negotiation Tactics .000 for a house that sold for $185. is the most (or least) the other side will accept. offer $150. and houses in this area sell fast.

That’s an insult! Jay: Well. Frank: Me too. realizing they offered too much. (the next day …) Jay: They made us a counteroffer of $307. (Bob and Frank meet privately to discuss the situation. was very impressed with their presentation. Sue: Then you do it. as Sue had first suggested. 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. Both parties felt that they made a good deal.000 for each of us—$6. then let them make a counteroffer. the company president. The buyers were very motivated to sell. They outlined how they would develop a new employee performance-appraisal system. I can’t tell our realtor $290. and the offer was based on fact: the prior negotiated price.Sue: Don’t be crazy. Give us your lowest price. as requested by the human resource director. since they had already bought another house. Lyle Foxworthy. but who knows what they are planning on offering.000.000 total. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. they had offered $325.) Bob: I’d do it for $3. Exchanging Initial Offers 87 . If.000.500—half the difference! Sue: Great. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. the sellers obviously would have accepted and Jay and Sue.

What’s the cost? Bob: We want the job. 88 50 Practical Negotiation Tactics . but we know you must have an amount budgeted for this and we are willing to do it for that amount. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. That is all that’s left in this year’s training budget.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room.) Lyle: Okay. We’ll do the job. We’ve waited long enough. but we can’t pay more than $18.000.000) their minimum price of $6. and you two come highly recommended. They also ended up getting three times ($18.000. Lyle: Okay. Bob: That’s fair. I’m out of time. and it would not apply. 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.

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

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

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

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

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

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

Can we split it evenly? Brooks: Okay. I’d like to spend some of it on lighting upgrades.000 $500 $1.000 $5.000 $2.500 $5.500 $2. that makes sense.200 $200–$2. which takes another $3. We have $1. which I’d like to keep in the bank.500 $500 $1. Maureen: No.000 $3. These are all permanent immediate needs. I’ll trade your sidewalk and trees for my whirlpool bath.# 1 Sod Item Cost $1. and we both get things we want. $750 for lighting and $750 in the bank. Making Counteroffers (The “Give and Take”) 95 .000 $1.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.500 left.000! Brooks: Good.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

112

50 Practical Negotiation Tactics

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

Making Counteroffers (The “Give and Take”)

113

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.

114

50 Practical Negotiation Tactics

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

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

Making Counteroffers (The “Give and Take”)

115

But when her mother laid out the schedule and gave her alternatives. but the company president does not share your optimism on this program. I can accept B. I’ll approve $15.000). but no TV or anything until it’s done! (pause) Okay. Roberto: Well. Felipe: (Roberto’s supervisor) Sorry. or C. she chose the one she most preferred. and clean it. (long pause) Felipe: Let me give you three options: A.000 for advertising. B. I’ll approve $15. that is enough time. Take it or leave it. Amber resisted the chore she hated. or we lose a whole year. keeping her Saturday free. I have three hours. Roberto: But I need to start the direct mail and newspaper ads within two weeks. Felipe: Well. Conclusion At first. Use the $5. Felipe: Sorry. I’m not going back to him again to discuss this program. but I will cut your travel budget out completely.000 budget! I need at least $20. but I will cut your staff by one part-time person (or $15. I can’t help.Amber: row before your basketball game.000 for advertising.000.000 in the budget. Three. Example 2 Roberto: I can’t properly advertise this new program with a $5. Clean it after your game. I’ll do it now. Roberto: But it will never generate enough interest if no one knows about it. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . I’ll find a way to do without one part-time person.

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

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

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

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

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

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

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

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

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

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

00 per month for your service. Making Counteroffers (The “Give and Take”) 127 . can’t you? Buyer: Yes. as promised.” she had him—she worked around the $300 slices.00 per month.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. You can do that. Instead of a three-year lease. but let me see the numbers. and added the trade-in. (looks at the numbers) That looks good.Buyer: I don’t see how you can do that. I can afford $6. Let’s see. But my neighbor pays $39. I can’t discuss another client’s account. down payment.99 per month.00 per month. Once the buyer volunteered that $300 was an affordable “slice. with your car and $6.000 price into “slices” the buyer thought reasonable. Sure. Great! So.000 down. but what else must I buy? Only the basic service for $8. it will be a five-year lease. I can’t afford that much. do you want HBO? How much? $5. you can get the Disney channel for only $5. Saleswoman: Simple.” She decided to cut the $45. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. do you want Disney? Yes. and payout slices to reach the total price she wanted.

128 50 Practical Negotiation Tactics . That’s another $5.99 per month. But that’s all! Then we’ll hook you up on Monday. 2.00 per month was far too much. The total is $38. 2? How much? $8. Yeah. they asked about the Cartoon Network.00 a month. That’s $5. Conclusion The owner thought his neighbor’s service at $39. I really want the sports channels. instead of one total amount. but he agreed to six “salami slices” for a total of $38. and SI 1. Disney is for the kids! The sports channels are for me. Thanks.00. What about the music package? Yes.00! Why? Because he judged the per-slice price to be reasonable.00 per month. Okay.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Great. Any other kids’ channels? Yes. and my wife wants the old movies. and probably felt much better about the total negotiated package because it was presented in modest individual slices. we had that before. 3.

When both sides believe that each has equally strong positions. A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. but in tense. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. Tactic #33 (The Bluff) is a classic pressure tactic. pressure tactics should probably be avoided. and the use of humor. In some cases. so are you ready to make a deal? This might convince a few buyers. “I can only guarantee this price until 6:00 p.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. For example. it is effective. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Applying Pressure 129 . and it can destroy your credibility. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). but it can be used effectively when one party clearly has an edge. turned off by the tactic. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. today.m. the traditional car salesperson might tell the buyer. however. Humor might not look like pressure. angry negotiations. which can be successful if the opposing team has two or more members who hold different views of an issue. It should be used with caution: It can end negotiations immediately. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). but others will walk out the door.

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

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

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

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

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

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

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

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.

Applying Pressure

137

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

138

50 Practical Negotiation Tactics

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

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

Applying Pressure

139

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.

140

50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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

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.

150

50 Practical Negotiation Tactics

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

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.

Applying Pressure

151

This page intentionally left blank

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

M

Making Progress

153

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

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

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

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

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

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

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

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

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

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

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

Example 2 Two friends and business partners. There is only one place for an access road that must serve all lots. They all have a great view and are equally desirable to build on. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. Then I will choose which parcel I want. They have a recent appraisal that values the property at $150.000. even children. Lots must be at least one acre to be developed. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Making Progress 165 . so we should be able to divide the property fairly. jointly purchased fourteen acres of lakefront property several years ago.Conclusion When two people desire the same object and it is something that can be divided in some way. The problem is that one of us will get four lakefront lots and the other will only get three lots. but is not sure how to arrive at a fair split. Clarence agrees to divide it. Archie is ready to build a retirement home on the property. Clarence and Archie. Archie: That’s true. Give me the map and a pencil. Deal? Clarence: Sure. That makes them more desirable. both parties. Clarence: Right. that sounds fair. and wants to divide it into two separate parcels. Archie: Here is the map. quickly recognize the fairness of the divideand-choose method. Archie: I really don’t care either. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. according to county deed restrictions. I don’t really care which lakefront lots I keep. 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 chose the parcel with the three lakefront lots.Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics . and both men were happy with the arrangement.

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

we’ll agree to Health Plan A with another ½ cent on the pension fund. 168 50 Practical Negotiation Tactics . This experienced bargainer said. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. If one party misjudges the situation.important item.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. In one case. it can be a dealbreaker. At the end of negotiations. “Okay.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. 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. so be prepared to withdraw the nickel and dime item at the hint of trouble.

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

Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. and he has always struck me as an honest person. He’s our cousin. I want the love seat. Let’s call Johnny Ryan. and if the bar and stools should be one item or two. with a record of labor involvement that included three recent strikes. (Pause) We’ve got to settle this today and get this stuff moved. Example 2 During a heated labor negotiation. Johnny had the “halo” of an honest person. Good idea.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. The union negotiators. and ask him if the couch and chair should be one item or two. I trust his judgment. What for? Tell him the situation. 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. 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 stools. He might or might not have also been a good arbitrator. 170 50 Practical Negotiation Tactics .

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

We love your house.000. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. They sold for: $225.500.000 under the listing price! We realize that. Sometimes. They believe it is overpriced. Here’s a list of the five that are about the same size as yours. (Next day) We’ve reviewed the records you’ve produced. but we feel that it’s a fair offer. but the key is to gather facts that you might need—not just the facts that you will need. has owned the house for 24 years and is downsizing to a condo. Sam Jones. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. $237. This offer is for more money than any four-bedroom houses on this neighborhood list. I’ll get back to you. the other party will ignore or refuse to believe the information. but the right facts presented at the right time can chill or astound and completely turn things around. and $237. but you’ve priced it way too high.000. and we are countering with an offer of $250. The owner.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.000. $235.000.000. $229. What? That’s $35.

Hatfield: While I was at purchasing. let’s not worry about it. and we know that only this model will meet our needs. Hatfield: My staff has done a lot of research.400 each. and did his homework. I’ll get called on the carpet. if other departments have ignored the policy. Conclusion Hatfield had anticipated what his supervisor’s position would be.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. We’ve talked with purchasing and we have the authority to buy seven for $2.600 unless the company president approves. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. Conclusion The Joneses had based their asking price on the advice of a friend. We accept. Supervisor: If I okay this purchase order. who was not particularly knoledgeable about real estate.000 each. Here it is. Well… We have a written counter of $245. I’ll be… Okay. Example 2 Supervisor: You know the policy. I asked for a list of all new PCs bought this year.000. He found facts that supported his position. The last 20 were over $2. Order the new computers.600 for a computer. No one can go over $1. That’s the bottom price. You can’t pay more than $1. Supervisor: Well. and wisely chose exactly when to present them in order to make his point. Making Progress 173 .

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

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

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

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

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

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

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

the following exchange occurs. Sue: I remember you. or go after you and perhaps make a new concession in order to get you back to the table. He stopped by Pembroke one day to look at the new models. how did you like it? Jay: Okay. You had time to assess my car. but I thought I might want to try a new Highlander. Your opponent will have to either let you go and run the risk that things are really over. a veteran salesperson. Whether you are really bluffing or you are serious. Jay: Hi. all from Sue Wilson. and the lease on my Avalon is about to expire. I like it. He really likes it. The next morning. here are your keys. but my Avalon is a good car. (Vahaly drives the new Highlander home. be sure you think this through beforehand. if I roll over the lease to a Highlander. Sue: Well. You bought your wife a new van just last year. 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. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. too. My name is Jay Vahaly. what can you do on a 36-month lease? Reaching Agreement 181 .) Jay: Sue. Jay. right? Jay: Yes. but his Avalon has been a good car. I’ve worked with you before.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. Jay. I don’t want to negotiate.

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

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

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

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

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

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

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

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

000 just to get the employee to “withdraw” the complaint. Monica accepted the $200. It was made clear that the employer had paid the additional $100.000.She: authorized to pay $200. There was a confidentiality agreement. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume.000. but word did get out that a public agency paid $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 when all that was asked for was $100. 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 and the conditions of the offer. to his disadvantage. 190 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

This page intentionally left blank .

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

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

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

park and a successful industrial park in the City’s enterprise zone. Ms. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. an agreement between the State of Kentucky. 202 50 Practical Negotiation Tactics . the City and a for-profit hospital for guaranteed indigent health care services for city residents. 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. 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. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Jefferson County.