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

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

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50 Practical Negotiation Tactics

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

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few people understand that normal interactions represent bargaining opportunities. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. such as these: • You receive the wrong order at a restaurant. practical tactics useful in real-life situations at work or at home. with neighbors. with family members. at a flea market. exactly. • A co-worker asks for volunteers for a new project. 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. • A child wants a new toy now.negotiator! Pass this book on to someone else who needs it. some will in retrospect even remember being the victim of one or two of them. accept what is given. 4 50 Practical Negotiation Tactics . or engage in an unproductive argument. But if you scored 8 or less. Unfortunately. Who. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. but many of us miss the opportunity to bargain in other situations. they pay the sticker price. Instead. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job.

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

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

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

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

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

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. other trade-offs are proposed and agreed to until only a few items remain.Conclusion In most labor negotiations. 28 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

I really don’t feel comfortable doing that now. because you are in the state capital and your firm has handled a lot of high-profile political cases. Give us some range. one of these two attorneys carries the surname of the firm they are leaving. Let’s just pretend this didn’t happen. And even though you don’t have an office in our city. To offer it now would be an insult. (surprised) Well. that you anticipate to build a very profitable law firm. What number were you thinking about? Well. I’m kind of embarrassed now. that is a very high number. And we. Yes. that’s just our initial figure. In every instance. we reserve the right to withdraw our permission. We should assume. but we get to keep all of the money we’ve received up to that point. I guess this is just not something we’ll be able to pursue. If at any time we feel that you have “harmed” our name. Thanks so much for meeting with me. Well. of course. it would be impossible to create a new name out of the names of our key partners. we do. We probably won’t be insulted. (concerned about loosing the opportunity) Wait. So. then. expect to pay for that. Using the Bits & Bites name can only enhance our profitability. you have a very solid reputation there. We weren’t really thinking about that amount of money. 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.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. starting with the ten partners you describe. and then 10% of your profits each year for as long as you use the name. we want $500.000 initially.

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

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

and your training programs. your rate of $3. the quality of the technicians’ work. firm offer if they decided to continue negotiations. She very wisely recognized the routine and forced Andy and Paula to give her a clear.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). Liz: But we still want to renew your contract.000 in service calls last year alone because your damn people don’t take care of the equipment. We estimated that it has cost us more than $50.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. And we want to change the 24-hour service response time to 48 hours. Sandy. 40 50 Practical Negotiation Tactics . For the past three years. And we need to add a clause that holds your company responsible for machine damages. And cut the training hours from 55 to 20. She realized that it put her in an impossible negotiating position. we’ve been fairly happy with your responsiveness. You are located outside our primary service area. causing our reps to spend hours on the road. perhaps even unintentionally.000 per month is one of the highest in town. Sandy: What? First of all. your account has taken too much time. we’re here to negotiate a new service agreement. Miguel: Well. Miguel: I’ve figured $4. Let’s talk. Miguel: But not at this ridiculous rate. Sandy.

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

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

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

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

and you just can’t be too careful. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. The owner told the employees that he was worried that during the overtime shifts. and it’s getting old.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. The owner 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. that’s just not fair. 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 not what we’re even talking about. lesssenior employees might be at greater risk of injury because they have to handle explosives. Working with fireworks is working with explosives. 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. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Owner: Now. and that they should be asking for a fairer base wage for the work they do for you. I’ve got to have the employees with the most experience to protect this place. On those overtime shifts. The employees’ negotiator finally decided to use “indignation” to break the stalemate. they would become dissatisfied with their pay and want their base pay increased. Where are your managers? Where is the training necessary to make Planning a Strategy 45 .

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

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

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

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

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

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. 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. Preferred Provider Organizations (PPOs). 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 .” If you spend many hours learning about Health Maintenance Organizations (HMOs). you gain an edge when negotiating a new plan for your company. and should therefore handle the problem.investment decision or deal with an error in a bill. he argues that she is the expert. and Point of Service (POS) plans.

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

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

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

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

m. we all leave. your attorneys know the tax laws. 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. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight.Sue: Mary: Jenny: 5:00 p. Allan: Let me confer with the city attorneys. David: I understand your concern. And besides. Agreed. 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. can sell or give away what is left.. this is December 29. December 31. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. 56 50 Practical Negotiation Tactics . Sue. if I cannot carry a negotiated and signed deal to my board by noon on December 31. All of us must come back before Saturday to take what is ours—agreed? Okay. and I appreciate your interest in the historic structure. if we are not finished. Okay. Example 2 Allan: As the negotiating team for the city. being the oldest.

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

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

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

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

The negotiator firmly states that it is their best offer in an attempt to gain a nice. (2004). 190–192. 2: Distributive Bargaining Process. by Michael R. None is as important as the first one.000) Settlement Range ($22. Carrell and Christina Heavrin.000 Buyer Initial Offer ($21.500) Resistance Point ($25. for example. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Adapted from Labor Relations and Collective Bargaining.000 22 23 24 25 26 27 Initial Offer $28.500) Fig.500) M $21.750–$25. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse.000) Target Point ($23. This is a practical starting point that will not anger the other side (and might even be expected). quick agreement. Another common strategy is to start with the status quo. as illustrated in the following figure: Seller Resistance Point ($22. “Distributive” bargaining (“win-lose” or “zero sum”) is used. such as proposing to continue at the current rate or price. Exchanging Initial Offers 61 .Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.750) Target Point ($24. 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.

thus starting out on a positive note. each initial offer ($21. 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.” but the settlement price.In this example. When the two parties agree to a price within the range. 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). See Tactic #18: Agree on Something As Soon As You Can. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing.000 and $28. 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. usually.000) is reasonable. The settlement range is the distance between the resistance points. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). if the buyer’s initial offer was $25. After initial offers are exchanged. it is termed the settlement point – not the “right price” or “fair price. the other side does not agree to this value). and is the range in which most negotiations actually occur. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse.000. 62 50 Practical Negotiation Tactics . these points have set the outer limits. The most common method of negotiating more than one issue or item is to combine two or more in a deal that gives each side something (Tactic #17: Package Items). the process quickly narrows to the range between the initial offers. thus producing a true “win-win” negotiation. In the example. A target point is the desired settlement value a party has set as a goal when negotiations begin.

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

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

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

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

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

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

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

Carolyn has decided to use as a “throwaway” the number of days she will work (previously. 31. December 30. in exchange for giving up earlier choices due to seniority. 31 January 1. each made a first choice of days they will work. 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. They all agreed to their schedules. December 31 Miguel: November 25. December 27. 2 In the first round of negotiation. if they let her choose the two days she will be off and the five days she will work. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. 26 Miguel: November 25.November 25 (the day after Thanksgiving) December 23. 2 Jenny: December 23. but that is a secondary consideration. January 1 Carolyn: December 24. January 2 None of the three are totally happy with the results. 24. 27. They have decided to start over. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. She would actually prefer to work the extra days and get paid time-and-a half. She proposes to work five days. 26. 30. This would allow Jenny and Miguel to each work only two days. A second and third round produced the following allocation: Jenny: December 23. They agree. 30. 70 50 Practical Negotiation Tactics . and each chooses their days to work: Carolyn: December 27. January 1. December 26.

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

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

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

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

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

Frankly. When we bought them two years ago. Tim: Okay. I don’t intend to “stick” you with anything. as long as the cost was approximately the same. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. we would have paid down our school loans more. I think it only fair that I take over repayment of all the school loans. The monthly payments are about the same. about the house and furnishings. Tim: Well.Kathy: Hey. Example 2 ABC Company. What do you want to do about them? Conclusion Having agreed to two items very quickly. ABC usually uses UPS 76 50 Practical Negotiation Tactics . and he could pay it in annual installments over a five-year period. Kathy: Now. I got my convertible. Okay. yes. If both of us had been working the year I went to graduate school. an art gallery. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. as you remember. hold on. a wholesale art dealer. and you got your sports car. and XYZ Co. we decided to each pick out our “dream car” and that we would not overrule the other’s choice.. The first thing I’d like to talk about is what we are going to do about the cars. I can hardly argue with that. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. 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. I think that makes sense. Kathy: I suppose we should look at the school loans next. They also agreed that Tim wouldn’t have to pay her that amount for five years.

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

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

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

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

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

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

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

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

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

Sue: Let’s offer $325. We don’t know how anxious they are to sell or if they know the market.000 for a house that sold for $185.000—what they paid for it. then $320. offer $150. and houses in this area sell fast. The other party will probably come back with an equally ridiculous offer. and you cannot withdraw it in good faith. Jay: No.000 two years ago.. particularly if you don’t know the other party’s “settlement range. such as last year’s price. The sellers must be willing to come down a few thousand … Sue: Well. or 3) Make an unrealistic offer (i. at minimum cost. which can be very useful). 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. 2) Start out with an old number.000 three years ago).) To prevent this from happening. before someone else does. never give them their asking price.” (You have won a settlement.” The perfect first offer. thus requiring greater concessions on both sides. Jay: No. and that two similar ones on the same street sold for $330. They found one they both like that lists for $325. 86 50 Practical Negotiation Tactics . 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. Let’s low-ball them and offer $290. of course. is the most (or least) the other side will accept.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. but you feel cursed because you gave away too much. think things through before you make or accept the first offer.000.000 this year. Their realtor told them that it sold for $290.000.e.000 and $337. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. Avoid giving away too much at the outset.000. That’s a fair price. because you have settled quickly.

Sue: Then you do it. (the next day …) Jay: They made us a counteroffer of $307. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Frank: Me too. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company.) Bob: I’d do it for $3. That’s an insult! Jay: Well.000 for each of us—$6. They outlined how they would develop a new employee performance-appraisal system. realizing they offered too much. Lyle Foxworthy. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. since they had already bought another house. Exchanging Initial Offers 87 .500—half the difference! Sue: Great.000. If. as Sue had first suggested. they had offered $325. the company president. was very impressed with their presentation.000 total. Both parties felt that they made a good deal. but who knows what they are planning on offering.Sue: Don’t be crazy. (Bob and Frank meet privately to discuss the situation. and the offer was based on fact: the prior negotiated price. The buyers were very motivated to sell.000. I can’t tell our realtor $290. as requested by the human resource director. Give us your lowest price. then let them make a counteroffer. the sellers obviously would have accepted and Jay and Sue.

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

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

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

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

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

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

500. thus making it necessary to find a middle ground on each. Let’s agree to those things. and a home theatre. With distributive items. because it can speed up negotiations and produce a more desirable outcome. if a buyer negotiates a $500 reduction of a contractor’s bill. These items often involve money). 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. Example 1 Brooks and Maureen Wilson have just finished building a new home. only those with polar-opposite interests that must be divided.). They have a fixed amount of money—$14.) Yes. three strategies are used. that’s $9. Brooks: Right.000. one person’s gain is another’s loss—zero-sum. Let’s see. 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. In essence.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. let’s see if there are any items we both want. 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). For example. we both want the sod. Maureen: First. and finally. Exchange. the fencing. etc. 2) exchange items (those that can be easily traded off—one item for another item of equal value. then those which can be easily traded. Wow! We are off to a good start. 94 50 Practical Negotiation Tactics . then the contractor has lost $500 in revenue. (She looks over the list. They both agreed that this is the maximum they will spend on “extras” before moving in. It is used only when each side has several demands. This approach is an important tactic.

500 $500 $1.000 $1. which I’d like to keep in the bank.000 $500 $1. I’ll trade your sidewalk and trees for my whirlpool bath.500 $2. Making Counteroffers (The “Give and Take”) 95 .000 $3.500 $5.000 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. I’d like to spend some of it on lighting upgrades. that makes sense.500 left.000 $2.200 $200–$2. $750 for lighting and $750 in the bank. These are all permanent immediate needs. and we both get things we want. We have $1.# 1 Sod Item Cost $1. Can we split it evenly? Brooks: Okay.000 $5.000! Brooks: Good. which takes another $3. Maureen: No.

management and union negotiators found that a “winwin” approach to negotiations worked well. During that time. even in difficult years. Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. Drug-Testing Program 96 50 Practical Negotiation Tactics . 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. 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). All items to be negotiated and their desired outcome for each item were put in writing for review. This year. both sides exchanged lists of initial demands at their first meeting.Conclusion By taking the time to list all the items each person wanted and their cost estimates. Pension Increase 3. The combined lists total thirteen different items: Desired Outcome No. finally agreeing to split the difference on the remaining amount (distributive items). Profit-Sharing 5. Wage Increase 4. Length of Contract 2.

Next. Shift Differential 11. Clothing Allowance Based on senior. Job Security 13. At this point. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). 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.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. They proceeded to draft the language to settle these issues.Distributive rent program co-pay Exchange Exchange 7.6. the negotiators agreed that they had compatible positions on three items: (#1) length of contract.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. Next. Finally. Health Insurance Employees pay 20% Continue cur. Overtime Assignment 8. signed. eleven of the thirteen original issues to be negotiated had been agreed to. they began to trade off the exchange issues of similar value and nature. and (#9) to continue the often-discussed no strike/no lockout provision. Paid Funeral Leave 9. First. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). No Strike/No Lockout 10. one Making Counteroffers (The “Give and Take”) 97 . the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). Subcontracting 12. (#5) a new drug testing program. Because they held opposite positions on these issues. and removed from the table.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The airline industry is in a slump. 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. Over the last five years. the airline paid a total of $200. and are willing to keep pension benefits the same. With long-term planning and investments. what they really need is for you to cover the costs of dependent coverage. that would be the minimum increase. As best as we can tell.000.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. you are taking a risk on the costs increasing. and the premiums for health care just keep going up. This would be a better benefit in the long run.000. we know that health insurance premiums might skyrocket. and we know that with this new contract term of five years.000 figure.000.000.000 a year over the next five years? Company: Yes. If we invest the $200. dependent coverage could cost us $1. Everyone was afraid that the dispute would cause an impasse and a possible strike. with all wage and operations issues resolved fairly early. as it has always been.000. the company can make your pensions much better.000. However. Company: This could not come at a worst time for us.000 (which we reasonably should have expected to pay in premiums) in the pension account now. This is just a cash-flow problem that your members have to understand. 124 50 Practical Negotiation Tactics . The company wants to trade paying for dependent coverage for better pension benefits.000. then the pension benefits overall will increase by $10. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. Pilots: Look. And we cannot afford that $1. The pilots want dependent coverage paid for by the company.000 to cover the premiums for dependent coverage. Over the next five years.

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

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

00 per month.” She decided to cut the $45. do you want HBO? How much? $5. But my neighbor pays $39. with your car and $6.” she had him—she worked around the $300 slices. (looks at the numbers) That looks good. Instead of a three-year lease.00 per month. Let’s see. I can’t discuss another client’s account. Great! So. as promised. down payment.000 price into “slices” the buyer thought reasonable.99 per month. you can get the Disney channel for only $5. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. can’t you? Buyer: Yes.Buyer: I don’t see how you can do that. Saleswoman: Simple. Making Counteroffers (The “Give and Take”) 127 . and payout slices to reach the total price she wanted. I can’t afford that much. You can do that. I can afford $6. Once the buyer volunteered that $300 was an affordable “slice. but let me see the numbers. but what else must I buy? Only the basic service for $8.00 per month for your service. Sure. do you want Disney? Yes.000 down. it will be a five-year lease.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. and added the trade-in.

What about the music package? Yes.00 a month. Disney is for the kids! The sports channels are for me. I really want the sports channels. instead of one total amount.00 per month. Okay. 2? How much? $8. Yeah. but he agreed to six “salami slices” for a total of $38.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. The total is $38.00! Why? Because he judged the per-slice price to be reasonable. That’s $5. Conclusion The owner thought his neighbor’s service at $39.00. Thanks. That’s another $5.00 per month was far too much.99 per month. 128 50 Practical Negotiation Tactics . But that’s all! Then we’ll hook you up on Monday. 3. and probably felt much better about the total negotiated package because it was presented in modest individual slices. 2. Any other kids’ channels? Yes. we had that before. and SI 1. and my wife wants the old movies. Great. they asked about the Cartoon Network.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

this time in front of a hidden recorder. Alexis agreed. Alexis then played the tape for her father. 162 50 Practical Negotiation Tactics .00. Susan understood the impact a tape recording can have when it reveals a lie. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. had $40. Then he played the tape.00 to spend. Susan repeated her demand.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. Alexis. who was disappointed to hear that she might propose such a deal. He asked his elder daughter about the arrangement. They might worry that the tapes will be made public or given to others. and Alexis. Fred Adams. but Susan had only $20. She borrowed a tape recorder so she could ask her father if this was a fair deal. threats. Conclusion For the first time in her life. The effect on the other party might be even more substantial if lies. Susan denied it. The two sisters had saved up a little money so that they could buy souvenirs. Example 1 Susan. South Carolina. thus becoming a source of embarrassment. Michael Wood. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. or used to pressure the other side to agree to certain demands. were on vacation with their parents in Myrtle Beach. or simply “bad faith” methods have been used by the other party. age 15. until Susan said they would evenly split what they bought. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Somehow. are talking about a possible settlement of the issue. the younger sister. Jones’s supervisor. Alexis knew this was not fair. and Jones. age 14. the investigator. the accused.

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

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

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

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. Which would you have chosen? 166 50 Practical Negotiation Tactics . and both men were happy with the arrangement. and the second parcel with four lakefront lots and one other lot.

supposedly the bargainer in the household. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item.” thus extending the scope of the negotiations. attach legs. he also set up all of the furniture in a second-floor bedroom.” Under store policy. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). His tactic was to throw in a “nickel” in order to make lots of “dollars. and the delivery carrier doesn’t set up mirrors. we’ll take the suite if you’ll throw in free delivery and set up the furniture. With a great deal of effort. delivery was limited to a small geographical area. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. etc.” Many people have witnessed or used this effective negotiating tactic. so the salesperson delivered the suite himself. Her husband Jason. What started out as a single issue is now a combination of a major issue and a much smaller issue. is expected to dicker over the price. miles from their home. “Okay. Conclusion The amount the couple spent was fairly large. Brenda did her part when she said. Jason was having a hard time getting the salesman to lower the price. However.Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way.

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

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

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

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

has owned the house for 24 years and is downsizing to a condo. They sold for: $225.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. We love your house. but the key is to gather facts that you might need—not just the facts that you will need.000. This offer is for more money than any four-bedroom houses on this neighborhood list. $235. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. 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. Sam Jones. the other party will ignore or refuse to believe the information. I’ll get back to you. $229. and we are countering with an offer of $250. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . The owner. but the right facts presented at the right time can chill or astound and completely turn things around. Sometimes.000. but you’ve priced it way too high.000 under the listing price! We realize that. but we feel that it’s a fair offer. They believe it is overpriced.000.000. and $237.000. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.500. Here’s a list of the five that are about the same size as yours. What? That’s $35. $237.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. (Next day) We’ve reviewed the records you’ve produced.

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

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

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

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

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

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

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

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

and he can simply buy it when the lease expires. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. here are your keys. but his Avalon has been a good car. and the lease on my Avalon is about to expire. I don’t want to negotiate. Jay. or go after you and perhaps make a new concession in order to get you back to the table. Jay.) Jay: Sue. too.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. He stopped by Pembroke one day to look at the new models. I’ve worked with you before. He really likes it. the following exchange occurs. if I roll over the lease to a Highlander. how did you like it? Jay: Okay. but my Avalon is a good car. Whether you are really bluffing or you are serious. You had time to assess my car. Your opponent will have to either let you go and run the risk that things are really over. right? Jay: Yes. but I thought I might want to try a new Highlander. Sue: Well. a veteran salesperson. I like it. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. Jay: Hi. (Vahaly drives the new Highlander home. You bought your wife a new van just last year. be sure you think this through beforehand. The next morning. all from Sue Wilson. what can you do on a 36-month lease? Reaching Agreement 181 . Sue: I remember you. My name is Jay Vahaly.

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

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

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

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

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

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

and two area rugs. that’s what I meant. It worked. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . When he had the chance to put the deal in writing. the hutch.000. the refrigerator. real. Under the section for appliances to be left on the property.) Seller: So. in fact. Bill: (pleasantly surprised to learn that the garbage disposal. he left the price at $150. Example 2 Monica brought a sex discrimination charge against her employer. she said that her supervisor had repeatedly asked her out. and the two area rugs were specifically included. (The seller recorded the offer of $150. the house is yours. I think we can work something out. Let me just get the standard “offer of sale” form and fill out what I hear you saying. Conclusion The seller had always intended to leave the garbage disposal. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. In the section for fixtures and miscellaneous items to be left on the property. If it’s what you meant. and the garbage disposal. and that the problems with her job performance were. then we have a deal. he began to have “problems” with her job performance. he listed an attached hutch in the kitchen. all window blinds and drapes. since he probably would have missed them) Yes. the hutch. but I’d like to make sure there are no misunderstandings.Seller: Just a minute. In her complaint. The supervisor pointed out that he had a staff of 20 or so women. Sign here. and the two area rugs. The supervisor assured the employer that there was no basis for her complaint. look this over. a public agency. he listed the stove. and had been prepared to drop his price to $145.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. and when she refused. Seller: Okay.000.

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

but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 just to get the employee to “withdraw” the complaint. Monica accepted the $200. to his disadvantage.000 when all that was asked for was $100. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. but word did get out that a public agency paid $200.000 and the conditions of the offer. I’ll take your offer back to her and let you know.000.000. It was made clear that the employer had paid the additional $100. 190 50 Practical Negotiation Tactics . There was a confidentiality agreement.She: authorized to pay $200.

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

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

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

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

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

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

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

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

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

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

Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 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. the City and a for-profit hospital for guaranteed indigent health care services for city residents. an agreement between the State of Kentucky. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. Jefferson County. 202 50 Practical Negotiation Tactics . Ms.park and a successful industrial park in the City’s enterprise zone.

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