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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.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
practical tactics useful in real-life situations at work or at home. or engage in an unproductive argument. exactly. accept what is given. 4 50 Practical Negotiation Tactics . Most readers will no doubt recognize some of these strategies. Who. Unfortunately. with neighbors. they pay the sticker price. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. 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. some will in retrospect even remember being the victim of one or two of them. with family members. such as these: • You receive the wrong order at a restaurant. • A child wants a new toy now. • A co-worker asks for volunteers for a new project. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. But if you scored 8 or less. at a flea market. few people understand that normal interactions represent bargaining opportunities.negotiator! Pass this book on to someone else who needs it. Instead. but many of us miss the opportunity to bargain in other situations. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven.
A neighbor wants to remove an old tree on your property line.• • • • • • • A hotel clerk tells you that your reservation was lost. since you lost my reservation. such as price. and I don’t have time to wait for another. Both sides want a settlement. “Well.” When you recognize that something can be negotiated. and each side can involve one person or several people (each representing one “side” of the issue). one party is only allowed to follow policy or must wait “until the manager arrives. that can be negotiated. In some circumstances. Each one has the five key characteristics necessary for bargaining: 1. In some situations. The parties are interdependent: what one party does affects the other. There are flexible elements to the situation. A friend is about to select the movie he/she wants everyone else to see. 4. time. or items of value. Decision-making ability. There must be a conflict in the sense that what one wants is not what the other wants. A teenager wants to buy his/her first car. Flexibility. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. The parties involved are interested in reaching a common goal. What are my alternatives?” During an employee evaluation. All of these situations are opportunities to negotiate. you must advise the other party of your intention to negotiate. Mutual goals. 5. A service repair person gives you an estimate on some work. condition. Your boss reviews your past year’s performance. Interdependency. For example. some resolution must be negotiated. perhaps the employee can say. Your spouse wants to buy new furniture. 3. “I’d like Introduction 5 . Therefore. Multiple parties. 2. be prepared to bargain. perhaps you can say to a hotel clerk. Two or more sides are involved. The parties involved can make a decision by themselves.
” To a neighbor you can say. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. but I believe it adds value to our house. Once a settlement is reached. the parties and their interests. 6 50 Practical Negotiation Tactics . “I see why you want to cut down the tree. and the tactics that might move the negotiations along. and use the forms in the back to identify the issues. the other party will realize that you intend to negotiate and do not accept the situation. Keep this book handy when preparing for any type of negotiation. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. the facts. and meet with you again. negotiations can be concluded with a written or oral agreement.time to look over this performance review and respond point-by-point. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations.
do you believe that you negotiated the best possible deal? 4. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. etc. do you routinely negotiate a last add-on before you close the deal? 9. In the past. As a parent. allowance. Do you wish you could negotiate a change in your job duties or salary? 7. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. In the past.? 10. or child. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. or division of household duties. When you purchased your last home or car.How good are your negotiation skills? Place a check in the box that applies to you. When making a major purchase. Do you routinely negotiate for better accommodations when you check into a hotel? 3. spouse. Yes No Self-Assessment Quiz 1. but you did not? 8. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . have you ever required a written agreement covering chores. did you request appropriate compensation? 6. The last time you received sub-par service or food in a restaurant.
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They’re referred to as “win-win” because each side can achieve their goal.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. one for another. If it is a relatively informal situation. thus allowing each side to achieve one of their goals. state. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. the process will probably take several weeks or months as the parties move through all the stages. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. the process will be fairly straightforward. Examples: • office location (city. The “Quick Model” approach outlined below is good for simple negotiations.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. On the other hand. etc. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). The Negotiation Process 9 . including those that are less obvious. decide how complicated the issue is.
What one side gains. 10 50 Practical Negotiation Tactics . Depending on the situation and the parties involved. but feel free to try them when they seem most appropriate to your specific circumstance.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book. Examples: • an item sold by one party and bought by the other • wage increases won by one side. The Comprehensive Model Negotiation is more of an art than a science. rearranged. stages can be combined. the other side loses. or even skipped altogether.
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:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
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.
The union negotiators thought the Jaggers were bluffing. 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. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. his BATNA was not to hold out for more money. notified all the employees of their intentions. The union is demanding wage and benefit increases. and equipment. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. 16 50 Practical Negotiation Tactics . was a power play. and final offer. inventory. The $56 million dollar business took them 30 years to grow. They learned that their assets would be easy to sell and were worth more than originally estimated. For the past two months.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. selling became an attractive alternative to a strike or prolonged battle. and it now employs 230 craftsmen.” which was refused. When negotiations with the union became hopeless. The Jaggers gave the union their “last. best. Conclusion Selling their business was the Jaggers’ BATNA. providing them with a very good income for life. The owners. as Harvey had for many years. With only two weeks remaining before a threatened strike. In this case. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. The union negotiators convinced the employees that this too. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. The threatened strike became a reality. 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. but rather what the buyer planned to do with the car. the Jaggers decided to seek buyers for their land. as a last resort.
sure. John assured Tom that this would never happen. it’s to your advantage to know what is behind a seller’s decision to put it on the market. Are you finally ready to sell it? Yes.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. If you are the party making the offer on the house. I’ll have to think about that.000. 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. How much are you thinking it’s worth? John: Well. she might have to take a lower offer just to be able to move. because if the company does not provide relocation benefits. I guess I couldn’t take less than $20. for example. you know. Example 1 Tom had always admired John’s 1861 Confederate rifle. right? John: Sure. I’ve been thinking of getting rid of it for a while. It is extremely rare—one of only 100 made with that bore and handle. This is a good thing to know. at some point. Make me an offer. John: Tom: John: Tom: Tom. Just running out of space. Gosh. I think so. Just as important is the why. and told John several times to let him know if he ever wanted to get rid of it. it’s still perfect. what the other party’s desired outcome is. you still interested in my rifle? Of course.000? That’s more than I planned. 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. A person who has to sell her home because her company is relocating her. What changed your mind about getting rid of it? It is still in perfect condition. so Tom was surprised when John called him out of the blue one day with a proposal. Tom: $20. Preparation 17 .
fearing that this will put all of his employees out of work. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. I don’t think I can go higher than $18. When Tom found out why John decided to sell his rifle. Rick needs to remain president of the company for the next two years. He is two years away from retiring and does not want his business to fail before he does. Example 2 Rick. if you could come up a little—say $18. I’ve been thinking about your offer. we 18 50 Practical Negotiation Tactics . Tom: Okay. BigManu: Rick. Well. Conclusion Tom entered into the negotiations suspicious of John’s motives. However.500 had an 1861 for sale. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. let’s do it. John: Well. but then he will be happy to retire. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. it made the negotiations easier. let me think about it and I’ll get back to you. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. the owner of a small manufacturing company.Tom: Okay. has begun negotiations to sell his firm to BigManu Company. but I could get the money to you right away.000. we really want to buy your company. No longer worried about John’s motives. parties to a negotiation are not likely to reach agreement. Was Tom interested? Tom declined.500—we’d have a deal. but thought this might explain John’s sudden interest in selling the rifle. and we’re committed to keeping it open as a major division of our company.) Tom: John. Tom now felt comfortable negotiating the price. Without some trust. The sale price for the company has not yet been agreed to. and now the two-year requirement has become a stumbling block in the negotiations.
Rick: I built this business from the ground up. The price they gave Rick was actually more than he had expected. In hopes of pushing the deal forward. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. I just want them to have a real chance to show you how good they are.) BigManu: Okay. Rick: These people are the best at what they do. (Between negotiating sessions. they decided to put their price on the table and revisit the issue after a price was agreed upon. BigManu: We just don’t see a way to give you what you want on this. Within the parameters of efficiency and effectiveness. I need to give them some sense of comfort if this deal goes through.cannot guarantee to you that ALL of your employees will be retained for two years. you will have a say in how the employees are treated. Without this commitment. my employees will prove to you that they are uniquely able to run this place. Let’s talk later. I just can’t go through with this sale. and he accepted it subject to agreement on the two-year employment guarantee clause. and I hired every one of these people. let’s talk about the job guarantee you wanted. We still can’t find a way to do it. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. Preparation 19 . they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. You’ll be in place to participate in our employment decisions. I just don’t want it to change after I’m gone. and we think it’s an odd request anyway. Working as a division of your company. BigManu: You know we want you to stay on and manage this division for us. We just can’t make good operational decisions with our hands tied.
20 50 Practical Negotiation Tactics . I’m hoping to retire in two years. This wouldn’t have anything to do with your own plans for the future. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. I certainly want to do all I can until then to protect my people. Rich almost lost the deal. would it? Rick: Well. Rick: Well. you’ll have a guaranteed “in” to protect your people.BigManu: We intend for you to stay and become a big part of our company. to tell you the truth. that might work. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Let me get back to you. Conclusion By masking his real objective (giving himself two more years as president before retiring). Surely you’ll be able to “protect” your people if they are as good as you say. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. but we won’t be completely tied to operations as they are now.
but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. I like the frog. 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.) Let’s take all our Beanie Babies to my house to trade! Okay. Bailey: Cybil: Preparation 21 . girls. such as a hotel conference room.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. the frog is everybody’s favorite. (Think of the showroom tactics used by car dealers.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. Mother: Hush. and go play somewhere! Cybil: Well … Okay. Cybil. they control the breaks and environmental factors. 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. (thirty minutes later) Bailey: So. Make up your minds. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. they have the information they need at their fingertips. too. and so on.
until we have a settlement. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. When negotiations resumed in two months over another piece of property. After forty hours of negotiating. meals. as long as they met in the boardroom of Team B.Conclusion Bailey. Team A was whipped physically and emotionally. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. 22 50 Practical Negotiation Tactics . That’s why she wanted to go to her house. About thirty-six hours later. not one member of Team A was chosen to return to the table. Team B had clearly used its home turf to gain a substantial advantage. The firm deadline was only four days away. although only ten years old. Team A agreed to change the meeting place. and other conveniences in the adjoining room. Team A agreed to a settlement almost identical to the one rejected days before. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. Both sides desperately needed to settle a property dispute. around the clock. Team B. while members of Team B were able to stay fresh. in their own familiar setting. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. having set up beds. The physical and emotional demands of 24-hour.” The chief negotiator for Team B agreed. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. was still going strong. They were blamed for accepting the same deal that had been rejected only days earlier. non-stop negotiations wore down the members of Team A.
about your bill. I gave you my “family” rate.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. Larry: Just make sure you’re comparing apples to apples. and he and Larry have always gotten along. After all. you are likely to resent them for it and hold out. based on objective criteria (think property appraisals in real estate). If you think that the other party knows more than you do.” This can hold up an agreement and cost you in the end. Will: Larry. when Will presented Larry with his bill. It was twice as high as the estimates Larry received from other plumbers before they started the project. Will is a licensed plumber. This uncomfortable negotiation followed: Larry: Will. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. though. but was shocked at the amount of the bill. I did get some estimates from plumbers. Let’s get the guys back in who gave you estimates. Believe me. Larry was thrilled. Larry had expected to pay him for his time. it became clear that all of those pipes had to be pulled and new ones put in. If they tell us that they either Preparation 23 . I would have charged anyone else much more. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. I anticipated much less work. Larry: Well. Things turned sour. and show them the actual work that got done. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. When you first told me about your project. rather than give them the “advantage. When we got into it. and they were much lower than this. I was kind of surprised at how high it was. Larry: But Will.
and decided to bring the matter up at a Board meeting. Budget Officer: I don’t know what your problem is. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. she had been investing the college’s endowment funds for many years. they would have had to revise the figures. they said. I certainly didn’t mean to offend you. Had they actually prepared bids on the work. From a look at the portfolio. because (as Will pointed out) it wasn’t an apples-to-apples comparison. and no one had ever questioned her performance. The estimates would have been higher than what cousin Will charged. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . I’ll revise my bill to meet the lowest estimate you get.disagree on the need for that work or that they would have done it for less. he used his financial expertise to analyze the investments of the college’s endowment 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. The college’s budget officer was understandably offended. Comparing the estimates to Will’s actual costs would have been counterproductive. Conclusion When the other plumbers looked at the work. He was disappointed in the performance of the fund. Example 2 After Stuart was appointed to the college’s Board of Trustees. Larry: That sounds fair. they had to agree that their early estimates were low. while she wasn’t an expert. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options.
Preparation 25 . and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. but such a strategy also increases risk and costs more money to administer. Okay? Budget Officer: Okay. I don’t question that they were sound at one time. but I want to be involved in the discussions with them about what we’re asking. considering commissions and all. 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. I have a suggestion. Stuart: No problem. As you know. In this situation. At the end of two months. the college is a private institution. if both of them demonstrate a similar strategy and produce better results after expenses. Now. and its resources are limited. 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. I don’t want you directing how they’re going to go. there might be increased risk and some expenses for commissions. but some of these stocks have really lost their value. Stuart: Yes. then you and I can talk about changing our investment strategy.were stale. I find that a more aggressive investment strategy produces a better return. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. Budget Officer: Yes. because she did not have the background in investments necessary to trust such advice. but we can ask them to plan and cost out each move. but I think they more than offset the gains. We just can’t make up losses to the endowment fund without considerable impact on our annual budget.
Shari: I’m four years older than the next-oldest. if I give you an increase. a sixteen-year-old who lives with her parents and three younger sisters. Example 1 Shari. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. This strategy can build trust in the negotiation process itself. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . what else can I do. (2) a later curfew. I need more money for clothes and CDs. cut the grass. (3) more chores. and for going out with my friends. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. baby-sit your sisters. not on what you want to spend. Mother: That’s a large increase—and we just raised it last year! Shari: Well.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. and ask the other party to add to the list. Mother: But your allowance is based on what you earn in your weekly chores. You can’t treat me the same! Mother: Well—so we’re talking about several issues. your little sisters will want equal treatment. Shari: Well. It will cost me more than $10—about $35 per week. has asked her mother for a $10/week increase in her allowance. not just an allowance increase! There is: (1) a $10 increase. 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. Once you both agree on the list of things to be negotiated. wash the cars.
Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. item #11 (the clothing allowance). you get to stay out an hour later that night. The trading of items (where initial demands are discussed and agreed upon) begins. Then a “win-win” solution could be determined. Shari got the $10 she wanted and a later curfew. and item #23 (the wellness program voucher). but unlike your sisters. Management agrees. The union’s chief negotiator. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). opens by proposing the list of items. Now we have a package deal to propose … Preparation 27 . And if you clean the whole house on Saturday. since all of their items were included as requested. which the other children would have requested as well. Now it is time for each side to list their desired outcome for each item. in the first session. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. if you agree to our proposals on item #3 (the paid vacation schedule). while your Dad and I go out. I’ll pay you $10 to babysit every Wednesday night. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items.Shari: Right! Mother: So … I suggest no allowance increase. An allowance increase. was avoided. while the mother won a Saturday house-cleaning and a night out each week.
the two sides will at this point sign and date the list of proposed items. Then negotiations can resume on the remaining 43 items. thus removing them from the discussion table. 28 50 Practical Negotiation Tactics . other trade-offs are proposed and agreed to until only a few items remain.Conclusion In most labor negotiations.
That’s a generous offer. which turned out to be only a few blocks from his own house.) Preparation 29 . I love this car—restored it myself. 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. thanks. Would you possibly be interested in selling it? No. on Briarwood Road. He stopped and knocked on the door. Bob followed the man home. Bob made it a point about once a month to go out of his way and drive by the man’s house. but money doesn’t mean anything to me at this point in my life … Well. (For the next three years. 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. time of day. my name is Bob Hillard. It was nice meeting you. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. As the man got out of his car. and do your homework. Prepare carefully. he noticed a FOR SALE sign in the yard.Tactic 6: Timing Is Everything The exact month. and general circumstances under which negotiations take place can substantially impact the outcome. $12. I live a few blocks from here. just out of curiosity. say. Not even for. he saw an elderly man get in his dream car and drive away.000? No. day. One day. One day.
so I guess I will be selling it. resulted in another 6-6 30 50 Practical Negotiation Tactics . as a matter of fact. A majority was needed to pass the partnership agreement. A third vote at 3:00 p. Well. (after a careful inspection) It’s a very nice car! I’ll give you $12. The partner organization. I’ll see you on Monday. Then it’s a deal? Yes. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. if a seventh vote could not be found by the pro-agreement side. and I promise to take good care of it.m. I’m moving to California to live with my daughter. for tax reasons. beyond which the project would have to be abandoned.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. The board members had met twice before. the proposal would die at midnight. Example 2 It was Sunday.m. December 31st. Follow me. Can you come back on Monday at 10:00 a. that’s a fair price. and the vote was a 6-6 tie each time. 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.000. I can’t take it with me. Conclusion While Bob did not achieve his goal during his first negotiation effort. to seal the agreement at the courthouse? Sure. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. Can I see it? Sure. had issued a deadline of December 31st.
the project had been stalled by 6–6 votes. during an hour break in the meeting. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. in the end.. 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. Then.m. a member of the anti-project group left the room. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years.m. When the meeting resumed at 4:00 p. He planned for it accordingly. Both sides caucused: The leaders on each side met to negotiate a compromise. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. That effort failed. For weeks.deadlock. and it worked.m. At 5:30 p. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage.. timing was everything.m. Preparation 31 . as predicted..
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Are there any outside people who might influence the process. Tactic #43 (Nickel and Diming). The overall strategy chosen does not limit the use of other tactics. In some cases. Third parties sometimes have their own hidden agendas. Before you can do this. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. decide whether the negotiations should be continuous. Be sure you are aware of this at the beginning. If you prefer to take a firm and direct approach. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. cooperative manner. or one-time-only. Some of the tactics listed in this book are only suitable for single-session negotiations. if you want to begin in a friendly. you must first evaluate your needs and those of your opponent. such as a buyer and a seller or a city and its union. Identify all outside influences and hidden agendas before you develop your strategy. A neutral. Tactic #12: Find Common Interests can be helpful. uncaring approach (Tactic #9: Control Your Emotions. for example. as it can substantially alter the negotiations between two primary parties. and Tactic #48 (Walk Away). 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. might step in and help settle negotiations between a union and administration negotiators. After you have evaluated these factors. such as Tactic #19 (Make a First and Best Offer). a third party can serve as a mediator (a legislative body. Tactic #33 (Bluff). but in practice it will likely influence the whole process. as well as their bargaining history and financial and political positions. 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. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). such as a third-party negotiator. For example.
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). two people on the team will be more successful because they evoke different emotions from the other side. but the inside was a complete turnoff. I offer half the asking price. 34 50 Practical Negotiation Tactics . and the buyer was able to completely renovate the house and still have a great deal. Weeks later. the seller’s agent called the buyer about the property. 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). with “All right. For example. His teenage sons had “trashed” the house. half-serious. 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 agent took the offer to the seller. “Please make any offer—they are motivated!” The buyer responded. If there is a significant weakness in your position. The desperate owner agreed. By assuming opposing roles. The agent explained that the seller was desperate. The buyer loved the location. The buyer said he wasn’t interested.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement.
000 is very high. and just refuses to reduce it. Anyone buying the house would want to change wall colors or add new carpets. with no success. but certainly not exceptional in any way. Finally. Carol: Maybe not. but quite frankly.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Carol wants $160. After all. It’s a good neighborhood. and then look at the demand from your opponent’s perspective. so think this through well ahead of time. We also think that the neighborhood has improved over the last few years. She has had it on and off the market for the last five years.000. You are not likely to get more than you request. it is likely that your opponent will. Your demand should be high enough to give you room to compromise. we think $160. Surely there’s some flexibility in your asking price. However.000. but we simply can’t take less than $160. First. your request must not be so low that the other party concludes that you are not negotiating in good faith. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. so do not underestimate what you might be able to achieve. Be realistic. Buyer: We really like the house. And I don’t see a lot of difference in the neighborhood. Each time. but the house has increased in value. but not so high as to end the negotiations before they begin. Planning a Strategy 35 . six years ago you bought it for $60. The market hasn’t gone up that much in six years. Buyer: The air conditioning might have increased the value of the house.000. If you consider the demand ridiculous. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. but the redecorating is of little value. as well. Carol: We really want to sell. one buyer shows some interest.
Here’s how the initial negotiations went: Partners: Well. and then $10. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites. 36 50 Practical Negotiation Tactics . but they have no idea what the value of their firm’s name might be in this nearby city. or she has unreal expectations. In any event.000 offer by coming down in price at least a little. The other law firm was prepared to pay $100. Carol drove off a potential buyer by setting an asking price that was just too high.000. though. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. Neither Edward Bits nor Edmund Bites. Inquiries to other law firms were not very helpful because in almost all of the instances. as to how you think the name is going to benefit you. The partners are interested in selling the name.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. We’re curious. the founders of the firm.Buyer: What if we offered you $100. we are certainly interested in your request to “buy” our firm name to use in your city. enjoying a statewide reputation for quality representation. When Carol refused to budge. the buyer took it as a signal that either Carol didn’t want to sell. Example 2 The law firm of Bits & Bites was a Sioux City institution. 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 immediately. were still alive.000? Carol: We really can’t take less than $160. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.
So. expect to pay for that. We should assume. What number were you thinking about? Well. And we. I’m kind of embarrassed now.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. because we were not even close to that number. Give us some range. starting with the ten partners you describe. We probably won’t be insulted. we want $500.000 initially. then. (surprised) Well. We weren’t really thinking about that amount of money. Let’s just pretend this didn’t happen. (concerned about loosing the opportunity) Wait. Using the Bits & Bites name can only enhance our profitability. In every instance. And even though you don’t have an office in our city. that is a very high number. I guess this is just not something we’ll be able to pursue. Yes. Thanks so much for meeting with me. I really don’t feel comfortable doing that now. we do. but we get to keep all of the money we’ve received up to that point. it would be impossible to create a new name out of the names of our key partners. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . that you anticipate to build a very profitable law firm. one of these two attorneys carries the surname of the firm they are leaving. you have a very solid reputation there. If at any time we feel that you have “harmed” our name. To offer it now would be an insult. and then 10% of your profits each year for as long as you use the name. we reserve the right to withdraw our permission. of course. that’s just our initial figure. Well. because you are in the state capital and your firm has handled a lot of high-profile political cases.
because there was no “objective” criteria available to help them set a reasonable price. Bits and Bites should have let the prospective firm make the first offer. 38 50 Practical Negotiation Tactics . It immediately dropped the idea. In this situation. Both parties were probably at a disadvantage.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. since they had initiated the contact. Either side could have asked for too much. rather than negotiate. The price they were willing to pay would have indicated what the naming rights were worth.
Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. threatening. Paula: Go ahead and ride it home. and I know how you take care of things. Andy: No. Peggy. They cost about $300. Peggy: I’m hearing one thing from Paula and another from Andy. Peggy: I assumed they went with the mower. angry. Andy: No. I’ll go home and you can call me if you two can reach an agreement. only three years ago. Peggy: That’s fair. etc. since they are sitting out in the driveway with it. you’re really moving! I hate to see you leave. so I’ll take it.200. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. I can use them. I want to keep those. Andy: I want them… Paula: Go ahead and take them. I heard that you want to sell your riding mower. what’s your price? Andy: $1. (bad guy) and implies that his or her side will hold firm on their demands. not for $1.400 if the catcher and can are included. I don’t know what the deal is now.200! We should get $1. And take the leaf-catcher attachment and the gas can. Peggy: Planning a Strategy 39 . Andy and Paula. Example 1 So. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. we won’t need it at the new condo. Peggy: So. Half what it cost us new. while another acts difficult. Andy and Paula: Yes.
your rate of $3. firm offer if they decided to continue negotiations. your account has taken too much time. the quality of the technicians’ work. We estimated that it has cost us more than $50. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm).Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. and your training programs. And we want to change the 24-hour service response time to 48 hours. we’ve been fairly happy with your responsiveness. For the past three years. Miguel: I’ve figured $4. And we need to add a clause that holds your company responsible for machine damages.000 in service calls last year alone because your damn people don’t take care of the equipment. Miguel: But not at this ridiculous rate. 40 50 Practical Negotiation Tactics .000 per month is one of the highest in town. Miguel: Well. And cut the training hours from 55 to 20. Sandy. Let’s talk. we’re here to negotiate a new service agreement. Sandy. Sandy: What? First of all. perhaps even unintentionally. She realized that it put her in an impossible negotiating position. She very wisely recognized the routine and forced Andy and Paula to give her a clear. Liz: But we still want to renew your contract. causing our reps to spend hours on the road. You are located outside our primary service area.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down.
I hope you can meet my terms. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. you two? Good news. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Sandy.m. I’m afraid our relationship is over. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Liz. (Three hours later) I’m back. Sandy. I want to keep you as a customer. these terms will put me out of business—I’m a small 20-person operation. with a position he knew was unreasonable. If not. I’ll explain on the way back to the office. I’ll stop back about 2:00 p. Our customer base has grown. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Sandy. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. even though it was far above the previous contract. Miguel! We’ve worked out a deal I think you can live with. I’m going on to lunch. Any luck. but Miguel’s right. Planning a Strategy 41 .Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No.
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. The fault was partly his because he did not stay on top of changes. It seems that the rate you are charging me on my home phone is $1. because we have had a sick relative out of town and we used long distance a lot this past month. 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. 42 50 Practical Negotiation Tactics . when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company. He decided that the best approach was to act indignant when he spoke to the company representative.Tactic 9: Control Your Emotions Stay cool. but I recently was sold a $.10 a minute rate at my office location. and might even harden your opponent into an unfavorable position (for you or for both of you). made some very good purchase decisions for his small business.00 a minute. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. How may I help you? Hello. This will put you at a distinct disadvantage from this point on. So. he was very unhappy. 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. I noticed this. He had. 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. such as deals on computer packages and phone services. in fact.
I realize that that might be the rate I started paying when I first took your service over eight years ago. But as a very good customer of yours. to begin now. Had you brought this to our attention before. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . I see that the rate you are being charged is the rate we offer for the type of service you have with us. Well. of course it is not always possible to give existing customers some of the “offers” we have out. Mike. and I also realize that if I had examined my bill closely.I expected the bill to be higher than usual. but this was quite a shock. I would think you would have given me the best rate you offer new customers. It hasn’t been increased at any time. Customer representative: Let me pull up your account. how would anyone who might only have residential service even know to ask? Well.10 per minute rate on your long-distance service. But I am able to offer you a $. I would have known I was paying too much. 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. (beginning to sound irritated. we certainly would have discussed your options. 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 I’m looking at a $500 longdistance bill. In doing so. which should rightly be $50. Mike’s willingness to show a measured “flare of temper” brought results. I would hope that you would credit my account for this better rate for past service. after all. I am. don’t think this is directed at you personally.10 per minute.Mike: I would imagine so. strategic anger and abusive behavior. however. The latter would not have produced the desired results. The best we can do is fix the rate for the future. either. 44 50 Practical Negotiation Tactics . (with a much angrier tone) Madam. she kept Mike as a residential customer as well as a business customer. between controlled. controlled voice) I need to talk to someone who can do it immediately. I … (interrupting and in a stern. and I want to speak to someone in authority so I can terminate my service. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. He was walking a thin line. there’s no reason for this conversation to continue. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. but I am very angry with Over-the-Air Company. If you can’t get me someone to talk to. and I should be treated with more respect! I’m sorry. a long-time customer of your company. We certainly don’t want to lose you as a customer. Wait—I’ll get my supervisor. but I can’t do that.
On those overtime shifts. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. 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. and that they should be asking for a fairer base wage for the work they do for you.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 employees’ negotiator finally decided to use “indignation” to break the stalemate. that’s just not fair. The owner told the employees that he was worried that during the overtime shifts. I’ve got to have the employees with the most experience to protect this place. they would become dissatisfied with their pay and want their base pay increased. 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. and you just can’t be too careful. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. and it’s getting old. They will be putting the plant AND their fellow workers at risk by not being here. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. Owner: Now.
though. the negotiator would have had to find a way back into the negotiations without losing ground. but not all? Conclusion The owner was on shaky ground with this one. don’t be so hasty. Sit down. Had the owner let him leave. he became more reasonable. You are not addressing the real issue for you: money. Then you can’t have it both ways. What if we were to agree that the senior employees could refuse half of the overtime offered to them. either the employees are properly trained. All I’m saying is that the most-senior employees have to be on the overtime shifts. Until you’re ready to talk about that. or they’re not. The negotiator was also running a risk with his flare of temper. (He begins to walk out. or they’re not. I’m not coming back. The end result was that the most-senior employees did win the right to refuse overtime. That’s all. The safety of the plant demands it! (standing up to leave) This is just ridiculous. Either they are properly protected.) Now. 46 50 Practical Negotiation Tactics . now. sit down. most of them continued to take all the overtime they could get. In practice. not at all. But we protect our people. But the fireworks business is a business that involves risk. 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. After the employees’ negotiator threatened to walk out.
the executor of the estate. Then Susan. The second party then decides to either buy it at that price and pay the first party. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). with winner taking all. The first party decides on a price for which he or she will either buy or sell the object to the second party. Mike. However. I’m willing to pay or let it go for $800. I’ll give you 48 hours to decide the price. called the “Reciprocal Buy-Sell Offer. All the rest of the estate has been divided among the family. 2) They can flip a coin. A fourth option.” is the recommendation of Howard Raiffa. and split the proceeds. since this one is in perfect shape and it was Mother’s. 3) They can agree to sell the object to a third party. Both sisters covet it. Planning a Strategy 47 . my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. you’re the oldest. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. (two days later) Mary Anne: Well. Mike: Mary Anne. with the highest bidder paying the amount to the other side in compensation for their loss. a well-known negotiations professor from Harvard University. Susan. so you set a price at which you agree to buy or sell the coffee grinder.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. The 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.
(sixty days later) 48 50 Practical Negotiation Tactics . They accepted his suggestion to use the “reciprocal buy-sell strategy. They thus were able to determine the highest price each was willing to pay for it or receive for it. Lectures on Negotiation Analysis. Two business partners had been working together for ten years to build a successful business. You will both agree. After I open the bids. to submit a sealed offer to buy/sell the business sixty days from today.” Howard: Since in this case you are talking about a multi-million-dollar business. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. I choose to buy it. Thanks for making this last step as easy as possible. I suggest a slight modification to the process. I’ll pick it up tonight. 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. Both sisters felt that the process enabled them to resolve the issue fairly. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. which will bind us to the outcome.Susan: Mike: Well. and then decide how much more “emotional value” it held. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Here is my check for $800. Both came to Raiffa to help negotiate a settlement. in writing. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner).
Howard: Abe: Bobby: Abe. Bobby was willing to pay more than Abe to remain sole owner. Bobby. and both men had carefully estimated the market value of half the business. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. Conclusion Both parties wanted to keep the business. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. I will arrange to sell him my half-interest for $180 million. your bid is $170 million. And I will arrange financing to pay you $180 million to become sole owner. you agree to sell your half-interest to Bobby for $180 million. and to close within ninety days. but only if they could become the sole owner. Planning a Strategy 49 . your bid is $190 million. Agreed. Abe. and we close by July 1st.
It can also work in reverse: establishing the other person as the expert.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. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. When it came to comfort. Looking at these statistics. he decided upon a strategy: First establish himself as the “dimension expert. They both expressed an interest in finding a couch that offered the most “interior” space.” but there were substantial differences in price—differences that the wife did not see as a problem. This approach can also be reversed: The wife in this situation is a banker. the one that was the most expensive was superior. Based on seating capacity. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . The wife was determined to buy the least-expensive brand rated excellent by consumer publications. and forcing him or her to control the discussion of the issue. The couple decided to limit their selection to those rated “excellent. Conclusion The husband became the “expert” in this situation by doing the homework. and created a spreadsheet to compare the five best-rated couches on their list. This strategy worked. The husband found the dimensions of the couches in the brochures and Web sites. she glanced at it and immediately deferred to his opinion.” and then argue for the frugal alternative. and the husband felt like he saved them hundreds of dollars. He thus ended up having greater negotiating power. the one he wanted (one of the least-expensive) was superior. 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. When he showed his wife the detailed spreadsheet.
he argues that she is the expert. and should therefore handle the problem.investment decision or deal with an error in a bill.” If you spend many hours learning about Health Maintenance Organizations (HMOs). a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. Preferred Provider Organizations (PPOs). and Point of Service (POS) plans. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. you gain an edge when negotiating a new plan for your company.
That simply rewards your continual squabbling. they saw that there was one piece of cake left over from their mom’s bridge party. They immediately began to fight over it. When they boys returned. and their mother was tired of it. you want to reach an agreement that is favorable to an outside party. I wouldn’t care so much. The boys quickly huddled. Example 1 When Russ and Bill got home from school. you both want to complete negotiations by a certain date. I also took out the garbage last week without being asked twice. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. If this was chocolate icing. and neither boy was very happy.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. neither of you want to be embarrassed at the outcome. Be clear on what you have in common at the start. These positive things are part of your goals and objectives. and so on. Russ: 52 50 Practical Negotiation Tactics . I missed dessert the other night because I had to get to baseball practice. Unless you can convince me otherwise. The two boys fought over the last piece of everything. because I am so conscientious about my paper route. and then asked their mom for a chance to negotiate with each other. Usually. and I really love the banana/butternut/ sour cream frosting on this cake. she made them share whatever it was. here’s what they said to her: I think I should be rewarded with the piece of cake. the last piece of cake will get thrown away. like we usually have. point them out at the very beginning of negotiations and refer to them throughout the process. particularly when things seem to be at a standstill. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. she decided to try something different.
she opens her shop at 7:30 a. and I really like white cake. Conclusion Once the boys realized that they had a common interest—not letting the cake get thrown away—they were able to negotiate a solution both of them could live with. I helped with the bags without being asked twice. 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.m. Now that her children are in college. The last cake we had was chocolate cake. Customers have started to park in nearby apartment lots. and keeps it open longer so she can attract customers on their way to and from work.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice. and that’s not my favorite either. so that your customers can park on the street. because there is no parking along the street during morning and evening rush hours. I can have the part with the icing and Bill can have the part with the cake and filling. It was the type of shop the nearby residents preferred. We realized that if we cut the cake lengthwise. and her children were in school. so these hours worked out well. This cake is white cake. Marilyn originally set her shop’s hours for 10:00 a.m. Planning a Strategy 53 . One day. That sounds like a wonderful solution. your new shop hours have caused your customers to park in our parking spaces. she got a visit from some of the residents. Residents: Marilyn. to 3:00 p. and better than a fast-food restaurant with late-night hours and a drive-through window.m. We really want you to go back to your original times. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood.
Marilyn: Conclusion Marilyn needed the extra parking. if residents haven’t left for work yet. Lets try it. if I go ahead and open the shop at 7:30 a. And we don’t think you want your customers’ cars towed. and between 4:00 p.00 a. or so anyway. we have to be willing to tow the cars that violate it.. I have to convince them to come before work. and 9:00 a. Identifying their shared interests caused the nearby residents and the customers to reach agreement. and 6:00 p.m. the off-street lots probably won’t be used by my customers.m. The shared parking arrangement did work out for Marilyn. and see if it works.m. 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.m. let’s see what the options are.. and 9:00 a. So.m. and I close at 4:00 p.m. 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. my customers can’t park on the street. and is probably empty in the afternoon if they haven’t gotten home yet. It is very costly to have cars towed. Between 7:30 a. I don’t think that would be very good for business.m. and usually the car is gone by the time a tow truck shows up anyway. Most of our residents are gone by 8:00 a. Okay.I’m sorry this is happening. and the residents needed Marilyn’s shop. Do you? Marilyn: No.m. 54 50 Practical Negotiation Tactics .m. The parking lot used for apartment residents is probably full from 7:30– 9. If you need to have the shop open more hours. I really need that extra income to stay in business. then we’ll try and accommodate you. rather than after work.. We think they’ll be agreeable to the morning parking. But in order to keep my new customers.? Residents: We certainly want you to stay in business here.
A deadline can help you make the best possible agreement in the shortest amount of time. Then we can sit down at this table at 3:00 p. and start choosing things. A few hours? I can’t—I’ve got to leave shortly for the drive home. 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. the first. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. etc. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. That will take days! I haven’t been in this house for twelve years. I don’t. Well. let’s all take two hours to look around and make a list of things we might want. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. one at a time: the youngest. How can I do that? You all live in this town and you know this house. But at Planning a Strategy 55 . We just don’t have the time … We’ve got to do this—the house is sold! Okay.m. 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). we can each take turns selecting things … Like each tool or dish. let’s all take a few hours to look around. Example 1 Four adult children have gathered at the home of their recently deceased mother. how should we go about dividing up the furniture and possessions? I can’t talk about it. Well.
All of us must come back before Saturday to take what is ours—agreed? Okay. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. 56 50 Practical Negotiation Tactics . David: I understand your concern. Agreed. this is December 29. Okay. Example 2 Allan: As the negotiating team for the city. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. being the oldest. can sell or give away what is left. And besides. Allan: Let me confer with the city attorneys.. if I cannot carry a negotiated and signed deal to my board by noon on December 31. your attorneys know the tax laws. However. we all leave. December 31. Sue. if we are not finished.m.Sue: Mary: Jenny: 5:00 p. 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. and I appreciate your interest in the historic structure.
Let’s continue. Obviously.Allan: (One hour later. we can’t get the reports we wanted in 48 hours. Conclusion Knowing the external deadline gave David a significant negotiating edge. and I don’t like it.) I understand the December 31 deadline. Planning a Strategy 57 . He waited to bring it up until it was clear that doing so would help him get the settlement his side desired.
His mother disapproves of his study habits. We had one at the beginning of the semester that we were using pretty often. we need to talk. and Jason knows he is getting a D in Spanish.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. and we used it a couple of times. I’ll need to buy it again. Control the use of the information. But don’t lose it again. while watching TV. don’t get mad. He decided to preempt the discussion in order to make the best deal. as well as strengths. but remember that both sides have weaknesses. I bought the second one. There will be times during a negotiation when you will want to catch your opponent off-guard. Mom: What’s that? Jason: A few weeks ago I lost my workbook. but his grades are good. but I have a problem in my Spanish class. and I missed some assignments. Mom: All right. as well as those of the other side. I’ll give you money for it. 58 50 Practical Negotiation Tactics . Unfortunately. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. and you can neutralize its effect on the negotiations. Have a clear goal in mind AND all the information you need to make your points. Did you buy it? Jason: Yes. One day mine disappeared. Jason: Mom. but that was actually a different workbook. so he was able to prevail upon her to let him continue. Now. first-quarter grades are coming out at the end of the week. before your opponent tries to catch you off-guard. and one of the ways to do that is to reveal a weakness at the beginning. The objective is to negotiate from a position of strength. He knows that a D will mean that he will have to change the way he studies. Mom: I gave you money to buy a workbook a few weeks ago. and this usually means having all the right information. Then the teacher went back to the first one.
then I’ll agree to make changes. I’m sorry. I think I can do that. so there’s no reason to think I need to change my study habits. English. I’ll give you more time. but I think you do need to change your study habits. Its owners found out that at least three other buyers had been in contact with Jane. Thanks. Pizza Boy was interested and had even made inquiries about the property. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. The location was ideal for a convenience store or a fast-food restaurant. But that Spanish grade needs to come up to a B!! Jason: Okay. And I know I have to be better about getting in all of my assignments. Jason: Spanish is just one class. and the D is directly related to my losing the book. And those are hard classes—Algebra. His explanation made sense. I don’t think you’re taking your schoolwork seriously enough. she trusted it more. If I don’t pull the D up to a C or better. Mom: Well. all right. Conclusion All of Jason’s grades did improve over the next quarter. It’s because I didn’t have the book. Mom: Well. Obviously. but all three deals Planning a Strategy 59 . he was able to continue to study the way he wanted to. The work I did turn in was fine. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. my study habits are okay. B. or borderline B. Although his Spanish grade was only a C+. Example 2 Jane once owned a piece of property she wanted very much to sell. All of my other classes are A.Jason: Another thing.(maybe C+). Environmental Science. Since I missed some assignments. Mom. and since he offered her the information up front. Jason’s decision to warn his Mom ahead of time rather than have her see the D on his report card gave him an advantage in the negotiations about study time.
The real problem. and was able to politely ignore her. Pizza Boy: Well. When the neighbor heard about the new buyer. What are her grounds for complaining? Jane: She doesn’t have any. A tentative deal was signed. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. Pizza Boy: Well. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. she started her campaign to keep them from closing the deal. You are a big enough corporation to withstand her objections. I think you’ll find that this is only one person. Pizza Boy: We’ve checked the property out. really. They decided not to fight a disgruntled neighbor. I’m very happy you’re interested in my property. either. which was way below the price they were actually willing to pay. however. there were no unpleasant surprises to stop the deal. though. This is how the negotiations went: Jane: Pizza Boy. When she contacts you. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. What are you asking for the property? Conclusion Jane told them her asking price.had fallen through. But unlike your company. I’m sure. I know. we’re not interested in neighborhood fights. she will want you to think it’s the whole neighborhood. Furthermore. Actually. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. 60 50 Practical Negotiation Tactics . the other interested buyers already have businesses in the neighborhood. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. however. Pizza Boy was prepared for her call. Jane: Oh. let’s assume that you are right. since they were well aware of the negatives. and it’s zoned for commercial use. it’s only the neighbor to the right of the property who has a problem.
500) M $21. by Michael R.500) Resistance Point ($25.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. 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.750) Target Point ($24.500) Fig. 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. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Exchanging Initial Offers 61 . quick agreement. 190–192. Carrell and Christina Heavrin. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Adapted from Labor Relations and Collective Bargaining.000 Buyer Initial Offer ($21. Another common strategy is to start with the status quo. None is as important as the first one. for example. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). “Distributive” bargaining (“win-lose” or “zero sum”) is used.750–$25. such as proposing to continue at the current rate or price. 2: Distributive Bargaining Process.000 22 23 24 25 26 27 Initial Offer $28. The negotiator firmly states that it is their best offer in an attempt to gain a nice. as illustrated in the following figure: Seller Resistance Point ($22. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party.000) Settlement Range ($22. (2004). This is a practical starting point that will not anger the other side (and might even be expected).
Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. it is termed the settlement point – not the “right price” or “fair price. each initial offer ($21. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). When the two parties agree to a price within the range. usually. thus producing a true “win-win” negotiation. 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).” but the settlement price. the other side does not agree to this value). After initial offers are exchanged.000) is reasonable. The settlement range is the distance between the resistance points. thus starting out on a positive note. these points have set the outer limits. 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. See Tactic #18: Agree on Something As Soon As You Can.000. You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. The 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).000 and $28. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. the process quickly narrows to the range between the initial offers. A target point is the desired settlement value a party has set as a goal when negotiations begin. 62 50 Practical Negotiation Tactics . In the example. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse.In this example. and is the range in which most negotiations actually occur. if the buyer’s initial offer was $25. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items.
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 . Example 1 Shelly’s “Sweet Sixteen” party was coming up. If the team is feeling pressure to concede on certain items. Shelly. without revealing their ideas to the other side.Tactic 15: Caucus If you are part of a negotiating team. You can invite up to 20 of your friends. so her parents sat down with their daughter to discuss the details. a caucus can be used as a break to calm the situation down.m. because it might disturb the neighbors. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. the negotiations got out of hand when Shelly’s dad forgot what had been decided. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. Her mom and dad had already talked about it privately. There are many ways to use this strategy. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. If the negotiations have suddenly gone in an unanticipated direction. and I already have 25 names. Shelly: Twenty friends? You’re kidding! I’ve just started on my list.m. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. so we’ll have the party from 7:00 p. or if a member takes on a role in the negotiations that has not been assigned to them.–10:00 p. We don’t want it to be a late evening. make use of the opportunity to call for a caucus. A caucus gives you an opportunity to work out problems with your own team in private. Mom: We’re planning on having your party here on Saturday night. We’ll just have chips and soda. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. Unfortunately. If the negotiations are heated. If negotiations seem stalled.
(with some irritation) I’m not sure.” They would never expect a party to end before midnight. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. I guess the VFW will work. Dad. Shelly. I’m sure we can ask them to tone it down a little. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. It’s special!!! Well. Jerry from down the street is in a really good band that all of the crowd likes. I think the band would be fine. I think we can handle a few more kids—how about 35? And midnight sounds okay. Your dad and I already talked about this and agreed that 20 guests would be the limit. Mom! This is my “Sweet Sixteen” party. We could play records and you guys could dance. we’ll call you when we’re ready. (excited) That would be so cool. In fact. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . we could rent the VFW hall. And midnight is definitely too late.m. We’ll get a band—everyone does.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. And they can’t go home at 10:00 p. and then the number of kids won’t matter. Time out! Dad. That sounds like too many for here at the house. okay. That would be great! It would keep everyone entertained. Actually. we need to talk.—that’s so “baby. (During the caucus. alone. Oh.
midnight. When they called Shelly back in. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . But you are limited to 40. can’t we? No band. That’s so lame.m. Okay. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. But we can have the band. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. A DJ? I guess that’s okay. we will be better able to chaperone. her mom presented the revised proposal. this mom-and-dad negotiating team became unglued during the negotiations. and you can invite more friends. Agreed. and we will need to approve the list. to 11:00 p. And we’re serving chips and sodas. Your mom and I agree—11:00 p.m. but your dad and I agree on getting a DJ to play. Dad. too? No way!! I want presents!! Conclusion In spite of their prior planning. is for little kids!! No. and not a huge production. causing them to lose control and make compromises they hadn’t intended to make. Example 2 The contract negotiations between the company and the union had been going on for days. Does that mean no presents. but no Sweet Sixteen birthday party decorations.m.m. All right. please!! 11:00 p. but we’ll schedule the party for 8:00 p. we’re going to rent the VFW hall.) Okay. sorry.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. That way.
Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. With the cost of college educations so high. it’s a good proposal. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. and the following conversation occurred. Union: (angrily) I’m not presenting this proposal to my people. Tuition in place of health insurances? They’ll think I’ve lost my mind. The tuition benefits will encourage the workers to be prepared for new job opportunities. some attempt to undermine me with my members? Company: I don’t know what you’re so worked up about—we’re willing to spend the same amount of money!! Union negotiator #2: Can we take a break? Union: We don’t need a break—we’re not discussing this stupid proposal. The company’s negotiator didn’t recognize the misunderstanding.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. 66 50 Practical Negotiation Tactics . The union’s lead negotiator misunderstood the proposal. A lot of employees have spouses who can get health insurance coverage through their work. What is this. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. Union negotiator #2: Please—just a moment outside. many will want to use it for their children’s education.
I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. Now. let’s move on. and the parties were able to complete their negotiations. the parties returned to the room.) I’m sorry. I thought that the contract would cover one or the other for everyone. Exchanging Initial Offers 67 . Good. we’ll be back in 5 minutes. I think that what you’re proposing is a really good idea.Union: Union: Company: Okay. Negotiator #1 regained his footing. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. (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. and I apologize for explaining it poorly.
Salesman: Let me talk to my manager. But for this price. it’s a great car and a fair deal. A has gained something of true value and given up nothing he values in return. you don’t want your opponent to know what these things are. this conversation takes place: Hobbs: Yes. Mr. I can go to another dealer and get a green exterior—the color I like best.” Party B thinks that A has sacrificed one important objective to gain another. However. not revealing that the item exchanged is a “throwaway. when the two sides are only a few dollars apart. according to the Consumer Reports listing of the cost of the vehicle. according to my figures. At a point late in the negotiations. so be sure you present them in a way that suggests importance. It is a useful tactic in any negotiations. and noticed that none of the vehicles have a green exterior. but in reality. you are making $200 profit over the true dealer’s cost. I’ll go get him. 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. Here’s how it works: Party A exchanges the item for something of true value. Salesman: Well. but he makes a mental note to use color as a “throwaway” item. I know. Hobbs: Yes.” Throwaway items are those things that hold little or no value to you. Hobbs. He doesn’t really care about the color of the new vehicle. quickly checked the dealer’s inventory of sport utility vehicles in stock. but … Salesman: But what? Hobbs: Well.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. we’ve got expenses and we need to make some profit. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . Example 1 The buyer.
Conclusion Mr. I’ll take the red one for $100 less.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Employees will be paid time-and-a half for each of these days. All three employees must agree to the schedule. Hobbs successfully chose color as a throwaway item. The days in question are: Exchanging Initial Offers 69 . he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. At the very end of the negotiations. The manager was convinced enough to sacrifice a final $100 for the throwaway.no it’s not. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth).. and seniority will be used to determine who gets to choose the first day... Then we have a deal. Example 2 The office supervisor told the three internal sales representatives (Jenny. 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 . Miguel. The three are sitting at a lunch table to discuss the schedule. and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years.
Carolyn has decided to use as a “throwaway” the number of days she will work (previously. January 2 None of the three are totally happy with the results. 27. but that is a secondary consideration. A second and third round produced the following allocation: Jenny: December 23. They agree. 2 In the first round of negotiation. She got what she wanted by giving up something she did not value: the two other days. December 26. 30. 31. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. in exchange for giving up earlier choices due to seniority. if they let her choose the two days she will be off and the five days she will work. 30. December 30. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. 31 January 1. They all agreed to their schedules. 70 50 Practical Negotiation Tactics .November 25 (the day after Thanksgiving) December 23. She proposes to work five days. 24. 2 Jenny: December 23. December 27. This would allow Jenny and Miguel to each work only two days. each made a first choice of days they will work. 26 Miguel: November 25. January 1 Carolyn: December 24. She would actually prefer to work the extra days and get paid time-and-a half. January 1. They have decided to start over. 26. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. and each chooses their days to work: Carolyn: December 27. December 31 Miguel: November 25.
the antiques. a house valued at $250. along with the cash. we need to sell the house. but I’d like to talk about the house and the furniture. Anne and her sisters. 300 shares of stock in a pharmaceutical company. 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. The house and much of the furniture has been in the Exchanging Initial Offers 71 . were faced with the task of selling the house and disposing of their mom’s personal belongings. and the stock and distribute the proceeds. one might package all of the financial issues in one group and negotiate on that package as one issue. realizing that the total cost of a deal might make or break the agreement. can indicate that something you think is minor is really a major concern to your opponent. When the girls decided it was time to talk about the estate. three ways. A reluctance to include one particular financial item with other financial issues. Autumn and Angela. for example. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. they met at the house. it is often helpful to package the items in distinct groups and then deal with each package separately. In addition.000 with no mortgage on it. and a collection of antique furniture. For example.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. The estate’s assets included a checking and savings account totaling $450. their mom left specific pieces of jewelry and art in the will to each of the girls.000. Example 1 When their mother died at age 82. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. Anne: As I see it. The process of grouping items can be an educational exercise because the response to one party’s suggested packaging of items might reveal how the other party views the various items on the table.
Autumn: Sounds good to me. In fact. Frankly.” She gave those things to us. Angela: I live close by. we’ll discuss again what happens to the house and the antiques. so I will be able to keep tabs on it. I’d like to talk about the art works Mom left each of us. Why don’t we leave some of the cash in the bank. don’t you think? Angela: Maybe. I’d like it all to stay in the family. we’d get a lot more for them. we’re really free to do with them what we want. and use it to fix the house up? Then when we make a decision. It’s a buyer’s market now. but the operative word is “give. I’d really be interested in talking a trade for some of them. we will have a more valuable asset.family for years. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us. So we agree: We’ll leave $30. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. she’s free to do so. If we want. Soon. Anne: But that means we have to continue to take care of the house and its contents. Angela: Now’s not a good time to sell either the stock or the house and antiques. it’s a magnet for vandals. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . There was a reason why she gave us what she did. we can sell ours. and if we wait a couple of years. Mother was born here and grew up here.000 in the bank and distribute the remainder three ways. What would you think about agreeing today to distribute the cash and stock three ways. and letting everything else wait for another discussion. With no one living here. Anne: Okay. We’ll split the stock three ways. Autumn: I think its awfully soon to be making these kinds of decisions. and now that we have them. And we’ll fix the house up. If Angela wants to hold on to her stock.
Employees: We’ve got a lot of items to cover. the jewelry. what kind of paid leaves there will be (personal. The third: Ben- Exchanging Initial Offers 73 . deciding whether there would be annual wage increases as well as merit increases. including benefits for partners in non-traditional relationships. Anne: Same with me. and the art works—will be more difficult. tuition 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. Several issues also needed to be addressed: the ability of employees to move up through the organization. and the assignment of the limited number of parking spaces. health benefits. the antiques. vacation. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. funeral. The second: working conditions (work schedules and promotional opportunities). and establishing a work schedule to accommodate evening and weekend clients. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. The following tasks needed to be a accomplished: establishing basic pay schedules. Angela: That’s fine.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. May I suggest that we divide the items into three areas. sick. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. The negotiations on the other items—the house. but I’m making no commitment to trade. etc.).
Later negotiations were difficult. Wages should not include merit pay raises. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. Let’s get started. as well. 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. the paid leave categories are pretty clearly defined. Executive Director: I think it’s a good idea to group items together. to be honest with you. we are an agency supported generally by public funding. I think it also makes sense to include tuition benefits in the Working Conditions category. Employees: Okay. but the parties were able to come to agreement because the wage issue had been resolved. and the parking spaces). that makes sense. tuition benefits. because they’re really an incentive for better performance. but I’d change your list. I would include that under the Working Conditions category. paid leave times. Executive Director: Sounds like a good agenda. 74 50 Practical Negotiation Tactics . Executive Director: Well. Also.efits (health insurance. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. 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. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. So I’d like to see us get through the wage issues quickly and then move on.
Kathy borrowed more money to go to graduate school full-time. sets the stage for mutual respect and communication. An initial agreement. are divorcing. Now. They met and married in college. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. no matter how insignificant. and that you are entering into the negotiations with the intent to reach agreement.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. The couple hoped to do the divorce without involving lawyers in order to save money. and might not even be able to keep the house. You signed those papers. It was her idea to buy the house and go into debt to furnish it. and she agreed. Tim began working right after graduation. It indicates to your opponent that you are a reasonable negotiator. Example 1 Tim and Kathy. Exchanging Initial Offers 75 . after a brief marriage. The discussion might become very heated. because Tim felt that Kathy had taken advantage of him during the marriage. Tim worried that he would be stuck with all of the debt. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. They were in the middle of buying a house. and both have good jobs. Tim: You might be leaving town. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. Kathy was asked by her employer to relocate to another city. without suggesting any changes or modifications. too. You can also make an effort to agree on something your opponent offers early in the negotiations. They have no children. They had also furnished their house on credit. Kathy’s first job paid more than Tim’s because she had a graduate degree. rather than disposing of assets. with her promotion sending her out of town. Their “property division” was mostly about dividing their debts.
a wholesale art dealer. When we bought them two years ago. as long as the cost was approximately the same. and you got your sports car. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. an art gallery. Example 2 ABC Company. Frankly.. and he could pay it in annual installments over a five-year period. Kathy: I suppose we should look at the school loans next. The first thing I’d like to talk about is what we are going to do about the cars. What do you want to do about them? Conclusion Having agreed to two items very quickly. hold on. They also agreed that Tim wouldn’t have to pay her that amount for five years. I think that makes sense. I got my convertible.Kathy: Hey. as you remember. yes. If both of us had been working the year I went to graduate school. 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. ABC usually uses UPS 76 50 Practical Negotiation Tactics . Okay. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. I don’t intend to “stick” you with anything. Kathy: Now. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. The monthly payments are about the same. I can hardly argue with that. we would have paid down our school loans more. and XYZ Co. Tim: Well. Tim: Okay. about the house and furnishings. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. I think it only fair that I take over repayment of all the school loans.
to ship artwork. We’ll expect you to pay for the 12 works that will be in your show. XYZ decided to cancel the promotional sale that was to start on Wednesday. but only if you let us ship it UPS. when the boxes were opened on Monday. XYZ contacted ABC immediately. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. There was no indication that the gallery’s electricity had gone out over the weekend. However. XYZ’s manager failed to open the boxes or remove the artworks. and arrived on time and apparently in good condition. Unfortunately. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. ABC refused to pay WeCanShipArt until it received payment from XYZ. ABC: Before we begin. 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. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. and we will continue to discuss who is liable for the three water-damaged works. and began preparing to return all of the artwork to ABC. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. it was obvious that the art in one of the boxes had suffered considerable water damage. They arrived right before the holiday weekend began. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. The artworks filled four boxes. The other times this happened. 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. ABC’s position was that the artwork was fine when it left their location. or else the box was damaged in XYZ’s warehouse. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. XYZ: ABC: Exchanging Initial Offers 77 . and the boxes showed no external damage.
I can’t see how I can refuse that. We can guarantee that we will deliver the new order in perfect condition by 5:00 p.m. Now. 78 50 Practical Negotiation Tactics . ABC: Well. You can’t just ignore us. regardless of where the original three artworks were damaged. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. and if word gets out that you think it was. they will split the cost of the three damaged pieces three ways. that’s okay with me if it’s okay with XYZ. XYZ: Okay. 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. If we don’t make the deadline.XYZ: Agreed. And we’ll eat the cost of shipping. They also agreed that if the investigations are not conclusive. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. WeCanShipArt: Wait a minute. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. generated a like offer from WeCanShipArt and a reasonable response from XYZ. The artwork was not damaged while in our control. Having reached an amiable solution to the immediate problem. we’re ruined.
You must mean what you say and be prepared to walk away from an unacceptable offer. I don’t want to quibble. What do you want for it? Colleen: Well. Jeff spends many hours mowing the yard every week. Exchanging Initial Offers 79 . we’ll sell it to you.000 for it six years ago.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. and even more hours in the fall picking up leaves. consider using the “First and Best” tactic. Ann: That sounds great! I don’t want this to affect our friendship. Ann: Well. Can you check others in the paper and just give us your best price? We will either take it or advertise the tractor in the paper. I know you and Jeff said you’d like one because you have about five acres. no hard feelings either way. We plan to put an ad in the paper next week. period. 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. Why don’t you give me a price? Colleen: Oh. 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. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. and it came with the bush hog and the leaf pick-up. I don’t have any idea. Ann: Thanks! We really need one. Okay? No quibbling. we plan on selling our Ford tractor when we move. The “first and best” tactic enabled them to settle the matter easily. but if you’re interested. Example 1 Colleen: Ann. we paid $5.
Example 2 Archie: Well. except salary. who admired the way Archie negotiated his starting salary. He also started the job with a positive working relationship with Vernon. and I’ll take 48 hours to consider it. how about you making your first salary offer your best one. as we agreed. So. no questions asked. Conclusion Archie accepted the job offer. I’ll get back to you in three days. 80 50 Practical Negotiation Tactics . Archie: Thanks. on this slip of paper. Here it is. I want the job. and you know my current salary. I don’t like negotiating over salary either. but I don’t want to start off in a new job by negotiating with my boss! So. I came up with the best salary offer I can make. I think we have agreed to all aspects of the job offer. We want you. (three days later) Vernon: Archie. I’ll either accept it or reject it. but we have internal budget considerations and we must consider equity with other employees. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. I expect a fair increase. I’ll discuss it with my wife and get back to you in 48 hours. Okay? Vernon: That sounds good.
and ignore or deny any weaknesses in it.m. First. I’m the only junior in the crowd.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. look for indications from your opponent as to what he or she believes is their best position. It might be your only opportunity to explain your position without interruption. Exchanging Initial Offers 81 . and we’ve made a lot of plans with our friends that I need to talk to you about. Kevin had “negotiated” with his parents before. so he knew that he would have to sell them very quickly. you will probably have to modify some of your positions if you are to reach agreement.) During the posturing phase. a 4:00 a. (Once negotiations get underway. curfew would be okay. He knew his parents would not agree to let him stay out all night. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. then the prom. but he figured “all night” was relative. Example 1 Kevin. we’re all meeting at Donna’s so we can share a limousine. He and his date had decided that as long as they could join their friends for breakfast after the prom. Sally’s Senior Prom is coming up. and in a favorable light. you only have one Senior Prom in your life. 17 years old and a junior in high school. since Sally is going away to college next year.” As you know. and then to breakfast at “Timothy’s. Second. Third. His girl friend’s Senior Prom was coming up and Kevin obviously wanted to stay out beyond his usual curfew time of 1:00 a. Posturing is indeed “acting.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. you know that Sally is really looking forward to this. Fourth. we’re not going to be dating exclusively after this summer. This is called posturing—presenting your position strongly and completely.m. First we’re going to dinner. Kevin: Mom and Dad. so the prom is a pretty big deal to both of us. Present your position and demands as if yours is the only logical position. was dating a senior.
That’s asking us to believe a lot. you have been fairly good about making your curfew—most of the time. Sally’s parents trust us and have already said yes to her. We think that after the breakfast. the limousine will take us back to Donna’s house to spend the night. We’ve heard that they allow kids to drink. and the crowd we hang with doesn’t either. they will be open for the Prom crowd only. Fifth. You make some good points. Second. but because the owner’s daughter goes to Sally’s school. so there will be plenty of chaperoning. You realize that this could be as late as 4:00 a.m. Finally. I don’t drink or do drugs. Donna’s parents are not as strict as they could be when a bunch of you are there. Donna’s parents will be there. That’s the deal then? Okay. Things can happen on a night like that that adversely affect you for the rest of your life. and we’re just not happy about that. I think I ought to be able to stay out all night. I’ve never missed my curfew. So. we know. but to use that as a reason to stay overnight doesn’t make sense. remember that when you started dating Sally and hanging out with an older crowd. From where we sit.or drug-free. this prom is a one-night thing—a dance that is dressier than you’re used to.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. I believe you can pay a little more and have the limousine bring you both home. of course. you and Sally need to call it a night (or really a morning). And if we don’t spend the night. We’re just not convinced that your entire group has been alcohol. happy about your plans to use a limousine so you kids aren’t driving. which could be dangerous. 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. yes. And. we’ll have to get in our car and drive home very early in the morning. We are. 82 50 Practical Negotiation Tactics . we told you that we would not be changing our rules to accommodate that older group. Yes. but it should not be oversold. However. I know you trust me and that I’ve earned the trust. for sure. Also.
Tencro is not going to leave the state. other companies have received incentives and Tencro certainly wants all it can get. we’re of course interested in keeping you here. With 800 employees. and it does not really need any help. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. The assembly plant is out-of-date. The company approached other states to see what incentives they might offer Tencro to locate in their state. but we’re getting a lot of interest from other states willing to help us relocate. we’d be adding at least 500 new jobs. our Exchanging Initial Offers 83 . The spin-off business from our operations is huge. EDO: Well. Nevertheless. Tencro has approached the state’s Office for Business Incentives to see what. but there are limited options available. Tencro approached the state’s Economic Development Officer. Example 2 Tencro Company decided to modernize and expand its business.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. but was disappointed to learn that they offer very few incentives. if anything. Tencro: Let me just remind you of what our company means to this state.m. Also. and a new. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. one-floor operation would be very profitable. It currently employs 800 people. because his parents could not disagree with such wellthought-out ideas. If we can expand here. we are one of the largest employers in this county. regardless of the incentives. the state can do to help the company expand and rebuild. but it could easily add another 500 if it had the space on its assembly line. and had this conversation: Tencro: We really want to keep our company here and expand it. We need to find out what you’re willing to do to keep us here.
what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. We 84 50 Practical Negotiation Tactics . We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. We need help in the cost of attracting and training the new 500 employees. if the new location is at the local industrial park. EDO: Well.. Certainly. We need certain incentives.employees pump money into the economy by buying houses and cars. 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. There are more residents in the state demanding more public services: road improvements. while we value your company as a long-time corporate citizen. We do want you to expand your plant. etc. etc. so we’d have to have it free here. now that the economy has improved. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. and traffic signals. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. 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. paying taxes. we will need the two-lane entrance expanded to four lanes. schools. or else it will not be cost-effective for us to stay here. We can’t possibly give it away to other companies coming in behind them. And we’ve been offered land practically free in the neighboring state. and we’ve had to divert funds from business incentive programs over to basic services. That might involve the state building housing for them at a reduced cost and providing them with some retraining. additional police. And. Also. EDO: The state has very limited resources to pay for economic development incentives. and we are willing to offer some training dollars for the new workers. We need a rebate on the local income taxes to help pay off the loan to build our new building.
the training and the new road improvements were all the incentives offered to Tencro. we’re just not in a position to offer more than that at this time. EDO: Get back to us as soon as you can. The new set-up was so profitable. Exchanging Initial Offers 85 . and hired 500 new employees. 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. However. Tencro: Well. Tencro bought land in the industrial park. Future negotiations continued. but for the fact that each party did its homework and was aware of the true facts. borrowed money for the new building. let us go back and take another look at our options. Tencro was able to pay off the borrowed money in half the time. Other than that. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees.
such as last year’s price. Jay: No.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.) To prevent this from happening. Avoid giving away too much at the outset. Their realtor told them that it sold for $290.000—what they paid for it. then $320. or 3) Make an unrealistic offer (i.000 and $337. of course. and you cannot withdraw it in good faith.000 for a house that sold for $185.” (You have won a settlement. 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. thus requiring greater concessions on both sides. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure.000. and that two similar ones on the same street sold for $330.e. before someone else does. 86 50 Practical Negotiation Tactics . offer $150. 2) Start out with an old number. because you have settled quickly.000 three years ago). is the most (or least) the other side will accept. never give them their asking price. which can be very useful). think things through before you make or accept the first offer. particularly if you don’t know the other party’s “settlement range. The sellers must be willing to come down a few thousand … Sue: Well. at minimum cost. We don’t know how anxious they are to sell or if they know the market. The other party will probably come back with an equally ridiculous offer. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. Jay: No.” The perfect first offer.000.000. Sue: Let’s offer $325. They found one they both like that lists for $325.000 this year. and houses in this area sell fast.000 two years ago. Let’s low-ball them and offer $290. That’s a fair price. but you feel cursed because you gave away too much..
They outlined how they would develop a new employee performance-appraisal system. Give us your lowest price. but who knows what they are planning on offering. and the offer was based on fact: the prior negotiated price. the sellers obviously would have accepted and Jay and Sue. was very impressed with their presentation.000 for each of us—$6. they had offered $325. (Bob and Frank meet privately to discuss the situation.500—half the difference! Sue: Great. The buyers were very motivated to sell.000. 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. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. since they had already bought another house.000 total. Lyle Foxworthy. That’s an insult! Jay: Well. as Sue had first suggested. as requested by the human resource director. Sue: Then you do it.) Bob: I’d do it for $3.Sue: Don’t be crazy. Exchanging Initial Offers 87 . Both parties felt that they made a good deal. then let them make a counteroffer. the company president. realizing they offered too much.000. Frank: Me too. (the next day …) Jay: They made us a counteroffer of $307. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. If. I can’t tell our realtor $290.
That is all that’s left in this year’s training budget. We’ll do the job. Lyle: Okay. What’s the cost? Bob: We want the job. I’m out of time.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. and it would not apply. Bob: That’s fair. We’ve waited long enough. but we know you must have an amount budgeted for this and we are willing to do it for that amount.) Lyle: Okay. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer.000. They also ended up getting three times ($18. but we can’t pay more than $18. 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.000. and you two come highly recommended. 88 50 Practical Negotiation Tactics .000) their minimum price of $6.
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.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. 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. One or more parts might be acceptable or indicate movement from their previous positions. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Also. Instead. T Making Counteroffers (The “Give and Take”) 89 . be enlarged (see Tactic #27: Expanding the Pie). Experienced negotiators seldom reveal their exact priorities and objectives. When the other party makes an offer. but possibly of different values to your opponent. do not dismiss it because it is not all you want. in fact. is likely to pull away from the table. and attorneys use tried and true tactics in giving and receiving offers. the other party. seeing no common ground. because if you do not at least appear to be flexible. which would most likely weaken their position (see Tactic #26: Keeping Secrets). and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). labor negotiators. In some negotiation situations. which is often the case. and do not flatly reject it because it is not your offer. carefully evaluate an opponent’s offer. Skilled negotiators such as salespeople. It has often been said that the key to negotiations is to be flexible (see Tactic #25). Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. what appears to be an outer limit of the settlement range when the process starts can.
Here’s the discussion that followed: Mom: Well. completed his first year of college and came home for the summer around the middle of May. what say you. His brother Sydney. Jerry pointed out that he is expected to work until July 31st. and quicker. their parents began discussing a family summer vacation. Jerry will be here. Option 2: Mom and I go before Jerry leaves on August 1. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. Option 1: No family vacation. I don’t want to give up on a family vacation that quickly. Example 1 Jerry. 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 had already started his summer job. Proposing multiple ways to reach your goal can get you to the same place. 19. He planned on being home for one last week before having to pack up and go back to college. Proposing only one solution to a problem. 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. In mid-June. while it may be your best option. Dad: Wait a minute. 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. Sydney. We have four options. it looks like we can’t really plan a vacation for all four of us. The week he would be home would be the first week of school for Sydney. Dad.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. gives your opponent little maneuvering room and might even prolong or damage the negotiations. except when you’re negotiating. 15. Let’s see what we can work out. so you can go without me. 90 50 Practical Negotiation Tactics . finished his freshman year of high school at the beginning of June.
It’s not perfect. me. Jerry: Okay with me. Andrea considers Making Counteroffers (The “Give and Take”) 91 . By proposing numerous options. you have a half-day orientation on Wednesday. but it should work out all right. and Carl). and Sydney go to South Carolina before his school starts. when we come home. and one secretary in his litigation unit. Jerry: My friends and I have plans through Saturday of that week.Option 3: Mom. actually. If we started the vacation on a Thursday. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. we meet up with him that week for vacation. Conclusion The goal was to have a family vacation. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Joe has no say in who was hired by the corporate legal office to work in his unit. Mom: Well. Mom? Mom: Let’s do it. Sydney: Okay. if it’s okay with Jerry. one paralegal. Then Jerry joins us until Thursday. so I won’t be able to meet up with you until Sunday. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. we could return home on Thursday and still get a week’s vacation. Bob. but he can discharge employees for poor performance. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Sydney: Don’t I start school that week? I don’t want to miss school. And I miss orientation and start school the next day? Dad: That’s an option. Classes don’t start until Friday.
you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. let me say that I’m handling the missed deadline on the pleading. isn’t it? But I don’t think just moving you really solves the problem. Andrea: Well. To put it as bluntly as I can. If you don’t like the way I do my job. Joe: Come on.herself to be a professional. 92 50 Practical Negotiation Tactics . Joe: That’s all well and good. but it doesn’t solve the problem—nor is it the only problem. rather than to put it off on someone else or for some time in the future. so Joe took a “hands off” approach. Andrea. The attorney for the other side has agreed to give me the additional time to file it. which forced Joe to take action. and I don’t see why we don’t have more independence. In the last month. It is to the corporation’s benefit to address that problem here and now. and resents any attempt by Joe to supervise her work. Andrea: Wait Joe. or you can work out a “supervision” agreement with me so that I can better monitor your performance. Andrea: You didn’t list moving to another unit as an option. I really see your options as follows: You can leave the corporation. you know that wasn’t an okay to settle. It was just a comment. Joe: Andrea. We have a formal procedure that you just don’t like to follow. You had no authority to agree to settle the Stites case without clearing it with me. Before you start. she made a two glaring errors in judgment. you have a job-performance problem. 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. Her job performance was acceptable. Andrea: We’re hired for our expertise. I thought I had cleared it with you when I told you what I thought they ought to offer and you said that sounded too good to be true. Joe: That is certainly an option. however. we have a very big problem.
the needs of the corporation have to come first. Andrea’s move and subsequent “approval” regime did. If that option is okay with you. I want to stay with the firm. and propose an acceptable alternative. lets talk to Bill about the move. I hope we can work it out. improve her work performance. my goal is the same is yours: to create an environment where you can perform to your full potential. by Leigh Thompson.Joe: That could be an option. Believe it or not. then it would save face for me if it comes with a move to another unit. It also changed her attitude about being both a professional and a team player in a corporate office. If you are convinced that I have to undertake an “approval” program. (Adapted from The Mind and The Heart of the Negotiator. or I would advise your next supervisor to put you on a very formal approval program. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. Joe: That’s fine with me. but it would still require some change in the way you work: either a demotion. But in fairness to our mutual employer. Andrea: Well.) Making Counteroffers (The “Give and Take”) 93 . in fact. rather than my staying here.
then the contractor has lost $500 in revenue.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. Wow! We are off to a good start. because it can speed up negotiations and produce a more desirable outcome. Maureen: First.500. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. one person’s gain is another’s loss—zero-sum. that’s $9. Exchange. This approach is an important tactic. the fencing. 2) exchange items (those that can be easily traded off—one item for another item of equal value. Let’s see. In essence. Example 1 Brooks and Maureen Wilson have just finished building a new home.) Yes. etc. 94 50 Practical Negotiation Tactics . (She looks over the list. Let’s agree to those things. thus making it necessary to find a middle ground on each. These items often involve money).). only those with polar-opposite interests that must be divided. They have a fixed amount of money—$14. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. 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). With distributive items. let’s see if there are any items we both want.000. Brooks: Right. 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. if a buyer negotiates a $500 reduction of a contractor’s bill. 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. 3) distributive items (those items for which the two parties have exactly opposite interests. we both want the sod. For example. three strategies are used. and finally. then those which can be easily traded. and a home theatre.
Maureen: No. that makes sense. which takes another $3.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.500 $5. $750 for lighting and $750 in the bank.000 $5.200 $200–$2.000 $1. We have $1.500 $2.500 $500 $1. which I’d like to keep in the bank.500 left.# 1 Sod Item Cost $1. Making Counteroffers (The “Give and Take”) 95 .000 $2. These are all permanent immediate needs. I’ll trade your sidewalk and trees for my whirlpool bath. Can we split it evenly? Brooks: Okay.000! Brooks: Good.000 $3. I’d like to spend some of it on lighting upgrades.000 $500 $1. and we both get things we want.
management and union negotiators found that a “winwin” approach to negotiations worked well. The combined lists total thirteen different items: Desired Outcome No.Conclusion By taking the time to list all the items each person wanted and their cost estimates. both sides exchanged lists of initial demands at their first meeting. 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. 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. finally agreeing to split the difference on the remaining amount (distributive items). This year. Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). Profit-Sharing 5. All items to be negotiated and their desired outcome for each item were put in writing for review. During that time. Drug-Testing Program 96 50 Practical Negotiation Tactics . Wage Increase 4. Length of Contract 2. Pension Increase 3.
Clothing Allowance Based on senior. and removed from the table. They proceeded to draft the language to settle these issues. No Strike/No Lockout 10. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7).Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. 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. Subcontracting 12. they began to trade off the exchange issues of similar value and nature. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Next. At this point. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). Job Security 13. eleven of the thirteen original issues to be negotiated had been agreed to. Shift Differential 11. Finally. Because they held opposite positions on these issues. signed. Health Insurance Employees pay 20% Continue cur. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). Overtime Assignment 8. Paid Funeral Leave 9. and (#9) to continue the often-discussed no strike/no lockout provision.6. Next. (#5) a new drug testing program.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. one Making Counteroffers (The “Give and Take”) 97 .Distributive rent program co-pay Exchange Exchange 7. First. the negotiators agreed that they had compatible positions on three items: (#1) length of contract.
when you agree on the items where both parties have similar desired outcomes. when you exchange items so that each party achieves their desired outcome on one of the two. negotiations begin on a positive “win-win” note. 98 50 Practical Negotiation Tactics . but it can be very effective when a negotiation situation involves several issues. Second. exchange. Third. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. The tactic offers several advantages: First. the most difficult issues (often involving price or some other economic measure) can be negotiated because you know that most items have been settled successfully and only a few remain. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. or distributive so that the negotiations can begin in an organized manner. Conclusion This tactic is simple. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. They then identify each as compatible. but a middle ground was eventually found on each and negotiations ended.side’s gain is the other’s loss. you can use the process to settle many of the other issues on the table. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. if both parties start from reasonable positions.
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. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer.Tactic 24: Wait to Counter As the negotiations begin. the location of the TV. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Let me finish. I’m not interested in a curfew. stereo. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. you know. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. They agreed on which part of the room each would have. even if you aren’t going to accept their offer. Rob: Wait a minute. Here is how the last issue was handled: Okay. It is especially important that you do two things: take your time before rejecting any offer from the other side. so I can study. This isn’t high school. and can help you reach your goal. and looks like you are belittling them. Since they didn’t know each other well. do not offer a counterproposal right away. Jasper: Finish or not. Rob: Making Counteroffers (The “Give and Take”) 99 . 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. will make your opponent feel good about the process. so he wants a quiet room late at night. So when’s a good time? Jasper: (without hesitation) No way. Mutual respect must be part of the negotiation process. each side is expected to put an offer on the table. Rob stays busy all day and evening with other activities. and studies late into the night. Waiting a respectful amount of time to counter. last item: I’d like it quiet in the room at night. and refrigerator. and from a strategic standpoint.
Under the restructuring. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. Jasper: (without taking a breath) At best. The union contract required that management renegotiate this change in the grievance procedure with the union. 10:30 p.) Listen. No agreement was reached. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . and that’s it. but changed his mind when he saw Jasper’s attitude. and d) a hearing with company owner if the matter is not resolved in 20 days. The appeals procedure would have to be altered to reflect the restructuring. the positions of non-union crew leader and floor manager would both be eliminated.m. Rob: (there is no hesitation in this voice) No. b) written complaint to a floor manager if the matter is not resolved in 5 days. Jasper: Midnight.m. is all I’ll consider. 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. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. and the union foreman would report directly to the plant manager. midnight during the week is the only thing I’ll consider.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. and that’s not negotiable. Under ABC ‘s contract with the union. I want a 10:30 p. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. curfew on TV and other noise every night.
The union was prepared to accept the plant manager’s position as final. he/she can take the grievance to the plant owner for a hearing. Union: Hold on. We’ve simply eliminated the first two steps. this redraft is a very simple change to the contract. After initial pleasantries were exchanged. We’ve got a couple of alternative models for you to consider. Company: (no hesitating) Trust me. Company: (rather abruptly) Let’s not drag this out. rather than as a judge on the merits of the grievance. An aggrieved employee can make a request for a meeting with the plant manager. Certainly. If in 20 days he/she has not been satisfied. our grievances often signal to management that there are real problems on the shop floor.any objection to the change. and began the negotiation session concerning the grievance procedure. Union: You obviously didn’t come here to negotiate. ABC Company’s negotiator explained the management changes soon to be implemented. In fact. We’d like you to consider the plant manager’s role as a problem-solver. 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. because those management layers are gone. the employee and the foreman would meet with the plant manager and attempt to resolve it. If the union foreman felt that the grievance had merit. rather than go on to appeal it to the company owner. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . Union: As you know. The redraft is simple and straightforward. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. (Note: An attitude change sets in. Company: Here’s the new draft of the grievance procedure. and I’m certain your members will be okay with it. and everything else stays the same. We just cut out two steps. but to dictate. no one can complain about that.
After a cooling off period. and actually accepted a three-step procedure. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. This time. We’ll see you on the picket line. Union: We’re very serious. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. the two parties did meet again. 102 50 Practical Negotiation Tactics . the company entertained the ideas the union had tried to propose before. You can’t be serious. rather than in the 35 days the current system provides.two-step grievance procedure instead of a four-step procedure. and we’ll strike if we have to.
successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. The couple used to have Thanksgiving dinner at both families’ homes. two sisters. 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). Making Counteroffers (The “Give and Take”) 103 . and now have a new baby girl. and at least five aunts and uncles) ate around 7:00 p. and do not dismiss something said by your opponent just because it came from the opponent. and we’re really not able to enjoy either one. They’ve done the research. we’ll get to our side. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. If you are flexible. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. Bill’s family won.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. you can adjust your demands or goals to include such new ideas. and identified the range of options they feel comfortable with negotiating. four brothers. two brothers. Sue: Yes. established goals.m. Mom says you.m. one sister. Sue’s family (parents. But after the negotiation gets started. Example 1 Sue and Bill have been married four years. Sue’s sister Nancy called her to talk her into coming anyway. Even before the baby’s arrival. 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). and ten nieces and nephews) always ate around 5:00 p. Bill’s family (parents. Bill. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. it’s just too much to do both. They flipped a coin to see who “got” them and the new baby this year. Next year. Be open minded. their spouses. Nancy: Sue.
but she won’t tell you. Isn’t that what Thanksgiving is about—taking a day to give thanks for our blessings with the people we love? We’ll just arrange it so we do it two days in a row! Sue: Well.m. By being flexible. Celebrating the next day seems odd. Mom’s very upset. Nancy: If we keep the time at 5:00 p. we’ll come to Mom’s. I mean. I know that I would rather not do two Thanksgiving dinners on Thursday. the holiday will be over. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. she suggested a unique alternative. Nancy: I’ll let you know. and it became the family’s new tradition. Thanksgiving is Thursday. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. There’s nothing “special” about Friday. Sue: Next year. 104 50 Practical Negotiation Tactics . some people have to work on the Friday after Thanksgiving. I bet everyone could make it on Friday. but then I realized that the rest of you already go to your in-laws earlier in the day.. When that goal looked out of reach. So that doesn’t work. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present. Bill won the coin toss for this year.Nancy: It just won’t be right without you guys. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. it’s okay with me if you can sell it to everyone else. Sue: I don’t know. I thought of asking Mom if she could move dinner up to noon or so. Nancy: We’d make it special by all of us being together. either.
Example 2 Kids’ Home. Kids’ Home hoped to get $500. Kids’ Home: As you know. Unfortunately (for Kids’ Home). the foundation’s regular annual grants come to roughly half of their available funds. Each year. but we need some assurance that you will be able to build and operate the orphan home at that location. we hope to break ground early next year for the new orphan home. We only have maybe $2 million a year to put toward this charity. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. They are meeting with the city to ask that the land be donated by the city for the project. 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’re committed in theory. City officals: We can probably give you the land for free. We need the city’s help by allowing us to get the city land donated to us (for free). but the principal of the fund can’t be touched.5 million is available for distribution to numerous charities. Kids’ Home: That’s why we brought the foundation’s officials with us. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. The foundation has a substantial endowment fund.000 a year for operations. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. Foundation officals: Oh. but we can’t fund all of the $12 or $15 million. the interest income of around $6. City: Can’t you borrow the money from a bank to build the facility. Estimates for building a new orphan home ranged from $12–$15 million. depending on the cost of the land. a non-profit organization for orphaned children. 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 .
We wouldn’t want to make such a commitment to a bank. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. We’re not familiar with that program. We probably would not be able to participate. If we borrowed $15 million at 10% interest. I’ll contact the state tomorrow. 106 50 Practical Negotiation Tactics . Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. We’re a nonprofit group. but we’re willing to look at it. and really taxes our ability to raise funds. it could end up costing double that amount. We’ve never committed our funds to pay back a bank loan. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations.Kids’ Home: Borrowing the money gets very expensive.
m. At the same time. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. But the Jones clan had four cars altogether. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. Before the Jones family moved into the neighborhood. They asked to meet with the Smiths to talk about these disagreements. each side has to know generally what each other wants to accomplish. The Jones family suspected that the Smiths called the police. It is perfectly acceptable to say that you are not ready to reveal certain things. and asked the officers to cite the Jones kids for parking too close to a corner.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. and often lasted until 2:00 or 3:00 a. and we would very much like to talk about how we can resolve these issues. Mr. These parties could get rather loud. Making Counteroffers (The “Give and Take”) 107 . yet not reveal all of your goals and objectives. In order for a negotiation to be successful. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. Successful negotiations depend on trust. Example 1 Soon after the Jones family moved in next door to the Smiths. it is not acceptable to lie. the Smiths could count on parking their car directly in front of their house. and often took up all the space along the street in front of the two houses. you might not want to reveal all of your priorities at first. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. The Smiths called the police to complain about a late-night party. Smith: We don’t know what you’re talking about. and trust can only be established if all parties interact truthfully. Mr. the neighbors began to have problems. Jones: We’ve obviously gotten off on the wrong foot. However.
we’d like to be able to park our car in front of our house.) 108 50 Practical Negotiation Tactics . yes. Almost every day. if they are outside. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. a lot of problems. and they won’t be having friends over more than one night a weekend from now on. And we’ll make sure none of our cars are parked in front of your house. And the music is to be off at midnight. At our age. the late-night parties are a problem. Jones: I wish you had mentioned that the last time we talked. the next time the boys were out playing and the ball came into the Smiths’ yard. they kept it. It is really very disturbing. Muffin. we’re good now? Mr. In spite of the Smiths’ assurances. we have a problem walking long distances in bad weather.Mr. Smith: No. (A week later. Mr. and was met with the following: Mr. Jones: Okay. Jones: We’ve already talked to the girls about the parties. Smith: Yes. and not in the back yard. Mr. Jones came to see what the problem was. since you’ve asked. Smith: You know that your boys are causing our dog. fine. I’ll talk to the boys and we’ll make sure they play baseball in the park. 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. In good weather. Smith: Well. then they’ll need to come in at midnight so that their talking doesn’t disturb you. but we do know that someone has complained. Smith: Well. Mr. Is that everything now? Mr. Mr. we thought you might have called the police about our kids’ party and our cars. So. Mr. I guess. they’re hitting baseballs into our yard. Jones: Well. we would like to work out some solution. Also. that wasn’t us.
or the deal is off. the British firm will walk away from the deal. The union laborers walked off the job on Friday. Unless Neno can get the Union members back to work on Monday. Mr. But we didn’t call the inspector.S. have labor unions. Example 2 Neno Enterprises is a shipping company with extensive global operations. irate) I can’t believe you people called an inspector on us.Mr. or European companies do. Its local headquarters has a union to handle its international shipping. The union knows that the company is up for sale. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Japanese companies often do not “recognize” labor unions the same way U. The British insist that a very strict confidentiality provision be part of the negotiating process. Jones: Sure. you’ve said that before. You obviously don’t want to be “good neighbors.S. and the deal is close to being final. Neno has been negotiating the sale of its business to a British company. 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. Smith: Well. Jones: (at the Smiths’ door. Union officials are afraid that a Japanese company might purchase it. although none of the facilities outside the U. but Neno cannot tell the union this. We would have fixed the tree if you had asked. You could have seen that yourself. the tree was clearly over the fence. Why didn’t you tell us? We can’t read what’s on your mind! Mr. Neno’s president and the Union representative met to discuss the walkout.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. because they didn’t like a grievance decision. Making Counteroffers (The “Give and Take”) 109 .
You don’t want to mess up our negotiations. then there’s probably no harm done. I promise you. so the union won’t be hurt by the buyout. Our guys are prepared to stay out a lot longer than Monday. it will impact our marketability. If that’s going to have a bad effect on your being able to sell the business. 110 50 Practical Negotiation Tactics . We can’t put up with the kind of decision we got on our grievance. and if the guys are back on Monday. I’ll forget all about the strike. Union: What aren’t you telling me? A labor shutdown. I need your guys to come back to work on Monday. But if your guys are out past Sunday. We’ll meet with all of the parties on the grievance first thing Monday. Have the guys back on Monday. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. You really don’t want to do that. It’s not the time to have one. any interruption in our shipping could affect how these buyers look at our business. I can’t really be more explicit than that at this time. I’m certain that if we can sit down and talk next week. we don’t. We’ve not had a labor shutdown in 20 years. Union: We think that the grievance decision affects our wages. Therefore. If everyone is back on Monday. maybe by next Friday or the week after that we’ll have our guys back to work. no harm-no foul. I think it already has. Neno: Look. But I have to have everyone back on Monday. this is a legal strike under the contract. If they do come back. Neno: Look. Neno: All I’m saying is that there is a difference. Anyone who buys the company will have to honor the contract we have. I know it’s not news to you that this business is up for sale.Neno: You know this is a wildcat strike and that it is in violation of our contract. do you? Union: No. whether it’s for one weekend or a week. And one company that is interested has a really good track record on expanding the businesses they buy. is still a labor shutdown. we will resolve it to your satisfaction by the end of the day.
while the grievance was being resolved. He told him that it would mean that the union would not only keep its jobs here. the union was willing to trust Neno—even though he couldn’t tell them everything. Conclusion On Monday. Union: Okay. Neno called the union negotiator in and briefed him on the sale. I would be more specific. the sale was finalized. If I could. as well. But I can’t.Union: It’s that important to you? Neno: Yes. I’m going to go along with you because you’ve always dealt straight with me. rather than make up reasons. was the right decision to make. we’ll be back to work on Monday. 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. Making Counteroffers (The “Give and Take”) 111 . and it’s that important to you as well. but the British firm will allow them to organize at their foreign locations. Union: Okay. But I need to tell my guys that this is important to them as well. Can you assure me of that? Neno: Yes. I can.
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.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
but no TV or anything until it’s done! (pause) Okay. Roberto: But I need to start the direct mail and newspaper ads within two weeks. but I will cut your staff by one part-time person (or $15. Amber resisted the chore she hated. Conclusion At first. Use the $5. I’ll do it now. I can accept B.000 for advertising. but the company president does not share your optimism on this program. keeping her Saturday free. Clean it after your game.000). Felipe: Well. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . Three. but I will cut your travel budget out completely. Roberto: Well. But when her mother laid out the schedule and gave her alternatives.000 in the budget. I’ll approve $15. B.000.Amber: row before your basketball game. or we lose a whole year. I’m not going back to him again to discuss this program.000 budget! I need at least $20. Roberto: But it will never generate enough interest if no one knows about it. and clean it. that is enough time. Felipe: Sorry. I can’t help. she chose the one she most preferred. I’ll find a way to do without one part-time person. or C.000 for advertising. (long pause) Felipe: Let me give you three options: A. I’ll approve $15. I have three hours. Take it or leave it. Example 2 Roberto: I can’t properly advertise this new program with a $5. Felipe: (Roberto’s supervisor) Sorry.
One alternative.” He offered Roberto three alternatives of equal cost. Roberto believed. would enable him to adequately promote the program.Conclusion Felipe was willing to think “outside the box. Making Counteroffers (The “Give and Take”) 117 . which was his goal. thus achieving his goal of not having to ask for a larger budget.
you are a valued employee. received a glowing report from her boss on her job performance. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. he can make an open-ended statement. If his opponent cannot agree to the demand but does not want to end the negotiations. Jones. Jones: I certainly do. But she also knew he would have to be willing to go to bat for her with his superiors if she was to get her advancement. I very much appreciated the fair job performance review you gave me. After a few minutes of silence. Susan: I hope so. You know my commitment to this company. Example 1 Susan. and 118 50 Practical Negotiation Tactics . This should have resulted in an automatic promotion and a sizable pay increase. nearing her third year with the company. 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. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. She was determined to hold her ground for at least a 13% pay increase and a promotion.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. Unfortunately. Susan: Mr. The negotiator for the other side says nothing. I think you would agree with me that I have performed well above expectations this past year. but one side comes back with a non-negotiable demand. the negotiator who feels the most uncomfortable with the silence will fill the gap and most likely make a concession in order to get the other party to speak. inviting a response. the promotion had not yet been approved. It was 16% less than she had been led to believe she would be getting. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. I have to tell you that while I appreciate what you have done for me. Here’s how the negotiations went.
maybe we can talk about the promotion later in the year. Susan’s silence prompted Mr. it could help. Conclusion Mr. if management can see their way to giving you the pay increase now. but a pay increase of that size might be more difficult. I would very much appreciate it if you could ask the company to reconsider. I suppose I could get the promotion approved with the proper presentation. I could probably find a way to phase it in over a two.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. and I’m sure management will agree.or three-year period. Jones to continue to offer solutions. because I feel my future with the company might be at stake here. I really want you to stay with the company. If there is some flexibility in your request. of course I will be glad to do that. (says nothing) Or. the company’s refusal to grant them now was a harder position to support. Making Counteroffers (The “Give and Take”) 119 . Promotions of this type are all but automatic around here. Okay? (says nothing) Let me check it out and I’ll get back to you. I must ask you to try to get both. and I think that I really haven’t been dealt with fairly. Once he acknowledged that both items might be awarded sometime in the future. and sell it to management that way. (says nothing) If I can’t get that pay increase approved right now. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. Well. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion.
the people Madame Mayor currently 120 50 Practical Negotiation Tactics . but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. My bosses might not have been inclined to expand the agreement anyway.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. The term of the original agreement was nearing its end. He decided to push for a simple renewal of the original terms. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. Also. The parties agreed to continue the previous terms of the agreement. This is how the negotiations went: Town Council Representative: Well. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. Town Council Chair). I don’t think it’s a problem. The end of the agreement coincided with the election cycle for the two towns. by saying that she might run for Chair. her plans really don’t have any bearing on these negotiations. The mayor. Mayor’s representative: No. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. and until she does. but now they’ve got to ask what Madame Mayor’s motivations are. Mayor) said that she was considering running for office. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. 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. and were trying to settle on new and expanded areas when one of the elected officials (Ms. has colored these negotiations. Mr. She has not decided what she’s running for.
I hate not to attempt to add some additional areas to the agreement. 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. He either had to end the session or figure out what to say to reengage the other side. I don’t know what her reaction will be. Conclusion By remaining silent. the Town Council’s representative left the mayor’s representative with no room to maneuver. In the end.represents have to worry that her desire to switch governments might taint the negotiations. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. I’ll go back and tell Madame Mayor your position. Making Counteroffers (The “Give and Take”) 121 . the Town Council representative’s position prevailed. and the agreement was renewed with no new provisions. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. Mayor’s representative: Well.
Obviously. she noticed that the brook came within 100 yards of it. had redirected the brook further into her property. As was sometimes the case in these parts. when one of you might say. the brook was the property line separating her property from a neighboring farm. after the gazebo had been there for about five months. in a small clearing. and began to renovate it as a home and a pottery shop. Madeline built a gazebo about 500 yards from the brook. You will have to remove the rock barrier. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. Neighbor: Well. The reason I built it was so that I could protect my patio. you should always enter the talks with a good idea of what you are willing to agree to. The property came with three acres of forest alongside a meandering brook. which an upstream neighbor had built. Madeline: Hi. Having an iron-clad demand probably won’t give you enough room to reach an agreement.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. the brook and rock barrier are on my property. Joe. One day. It calls for compromise. 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. 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. Madeline. She traced the brook back along its course to see why and where it had changed its path. “I have to have this. Example 1 Madeline bought an old farmhouse outside of a small town. The brook 122 50 Practical Negotiation Tactics .Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. She discovered that a rock barrier. or we will be at an impasse. I have a problem. Your rock barrier has sent the brook onto my property and it is too close to my gazebo.
Madeline: But by diverting the brook. 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. Also. but you’ve changed the boundary line of my property. you have not only threatened my gazebo. By expanding the range of options available to resolve the dispute. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. I won’t remove the rock barrier. she widened her range of options. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. When she found out that this was not going to solve her neighbor’s problem. I understand that. I couldn’t have that. I ask that you allow an expert to suggest the best way to provide for the diversion of the brook to protect your house and my patio. and allow the neighbor to protect his home. Madeline: Yes. which enabled her to achieve her goals. but I don’t know what I can do about it.extended right up to my back door when the rain was heavy. 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. She left room for a compromise. at least I’ve maintained my property line. if the brook is redirected. Madeline: Well. restore her property line. Neighbor: I’m sorry. I can’t have the brook in my house. Neighbor: I can do both of these things. Madeline was able to protect her gazebo. and return everything as it was. What if you removed the barrier for a short time. I’ve lost 400 yards of property on my three acres. It might not be necessary to make such a dramatic change. what I need is to protect my property line and my gazebo. Then. Making Counteroffers (The “Give and Take”) 123 .
The pilots want dependent coverage paid for by the company. As best as we can tell. However. the airline paid a total of $200.000. as it has always been. Pilots: Look. and the premiums for health care just keep going up. And we cannot afford that $1. This is just a cash-flow problem that your members have to understand.000.000. Everyone was afraid that the dispute would cause an impasse and a possible strike.000.000 (which we reasonably should have expected to pay in premiums) in the pension account now. If we invest the $200. you are taking a risk on the costs increasing. and we know that with this new contract term of five years. 124 50 Practical Negotiation Tactics . that would be the minimum increase. with all wage and operations issues resolved fairly early.000 a year over the next five years? Company: Yes. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. dependent coverage could cost us $1.000. But only a few of our people are close to retirement age.000 to cover the premiums for dependent coverage. Over the last five years. The projections for the next five years were that these costs would increase to about $1. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. then the pension benefits overall will increase by $10. the company can make your pensions much better. With long-term planning and investments. Over the next five years. we know that health insurance premiums might skyrocket. This would be a better benefit in the long run. Company: This could not come at a worst time for us. what they really need is for you to cover the costs of dependent coverage.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. The airline industry is in a slump.000. and are willing to keep pension benefits the same. The company wants to trade paying for dependent coverage for better pension benefits.000 figure.000.
so the decision to be flexible was a good one. that would be worth it. we are. can we agree to a year-to-year agreement on dependent coverage. then those funds will not be available to invest in the pension plan. The dependent coverage is more important to us now than the pension benefits. Making Counteroffers (The “Give and Take”) 125 .000. The pilots expanded the range of options. If we can get two or even three years out of the $200.000 actually carried them through four years. It initially believed that the only option was to put that money into pension benefits. the company will not be expected to give us this benefit. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. Conclusion The company was committed to limiting its exposure to $200. or invest in the pension plan? Company: Yes. by agreeing to let the company cap its exposure for dependent health coverage. and the pilots knew what to ask for when the contract expired.Pilots: But you do have the $200.000 available. Company: If the company spends the $200. with a cap of $200.000 the first year on the premiums. The $200.000 to either pay one year of the premiums. if they were that high.000? Once the cap is met. Company: Then it’s okay with us. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. The health insurance market stabilized. however.
I love this car.500! Saleswoman: Yes. Buyer: Yes. if I can give you this car with a $300 monthly payment. but that was several years ago.000 car. it’s a deal? 126 50 Practical Negotiation Tactics .” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party. Saleswoman: I’ll be right back. Buyer: Way too much! Saleswoman: Well.” “affordable weekly payments. do you want to look at something else? Buyer: No.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. and compare it to your strategic objective. If you are on the receiving end of such a tactic. Saleswoman: With your 740 in trade. Example 1 Car buyer: What. I guess it would be around $600 per month.” and “low monthly rates” are examples of the salami tactic. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. what monthly payment did you have in mind? Buyer: More like $300 per month. be sure to add up the total cost. I recall the day you drove it out of here. $45. I just can’t imagine the monthly payment on a $45.… (20 minutes later) Saleswoman: So. Phrases such as “for only pennies a day.000 for a Volvo? I bought the one I’m driving for $19.
00 per month.” She decided to cut the $45. Sure.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. I can’t afford that much. you can get the Disney channel for only $5. Once the buyer volunteered that $300 was an affordable “slice.000 down. (looks at the numbers) That looks good. with your car and $6.000 price into “slices” the buyer thought reasonable. do you want Disney? Yes. can’t you? Buyer: Yes.Buyer: I don’t see how you can do that. I can afford $6.00 per month for your service. it will be a five-year lease. Instead of a three-year lease. Great! So. But my neighbor pays $39. but what else must I buy? Only the basic service for $8. You can do that. Making Counteroffers (The “Give and Take”) 127 . but let me see the numbers.00 per month.” she had him—she worked around the $300 slices. down payment. as promised. Let’s see.99 per month. and added the trade-in. do you want HBO? How much? $5. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. I can’t discuss another client’s account. Saleswoman: Simple. and payout slices to reach the total price she wanted.
The total is $38. What about the music package? Yes.00 per month was far too much. Okay. Disney is for the kids! The sports channels are for me.99 per month. Great. they asked about the Cartoon Network.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. but he agreed to six “salami slices” for a total of $38. Any other kids’ channels? Yes. 3. and probably felt much better about the total negotiated package because it was presented in modest individual slices. That’s $5. and SI 1. I really want the sports channels. instead of one total amount. 2? How much? $8. Yeah. we had that before.00 per month. Thanks. Conclusion The owner thought his neighbor’s service at $39.00! Why? Because he judged the per-slice price to be reasonable. 128 50 Practical Negotiation Tactics . and my wife wants the old movies. But that’s all! Then we’ll hook you up on Monday. 2.00.00 a month. That’s another $5.
For example. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. so are you ready to make a deal? This might convince a few buyers. today. In some cases. which can be successful if the opposing team has two or more members who hold different views of an issue. the traditional car salesperson might tell the buyer. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. but it can be used effectively when one party clearly has an edge. Tactic #33 (The Bluff) is a classic pressure tactic. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. it is effective. and it can destroy your credibility. When both sides believe that each has equally strong positions. pressure tactics should probably be avoided. turned off by the tactic.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. It should be used with caution: It can end negotiations immediately. A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. but others will walk out the door. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). “I can only guarantee this price until 6:00 p. Applying Pressure 129 . 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).m. and the use of humor. Humor might not look like pressure. angry negotiations. but in tense. however.
Lacey. Lacey and Chloe didn’t know that Don and Abby were. It 130 50 Practical Negotiation Tactics . We’d hate to give it up. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. boat prices have really gone up. together and separately. The two couples used the sailboat a lot the first couple of years. Chloe and I would like to take the sailboat with us. Don and Abby now use it less and less. big news! I’ve been promoted. I don’t know. Abby really loves that boat. in fact. Lacey: I know. Such exaggerations are easily revealed or uncovered.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. And we don’t want to be unfair. he and Chloe wanted to buy out Don’s and Abby’s interest. Although I do think there ought to be some consideration for the two years you had use of the boat. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. I think Chloe and I would be willing to pay more than just the money you guys put into it. In the last couple of years. Your opponent will consider you untrustworthy and might even be insulted by your attitude. getting a divorce and each moving away (and would have no more use for the sailboat). and we need to talk to you about how we can buy you guys out. When Lacey found out that his employer was transferring him to another city farther down the coast. but Don. and they will weaken your credibility. Don: Absolutely. but it is not a good idea to exaggerate what you are offering or what you are giving up. Don: Wow. and we’ll be moving south in the next month or so. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. Lacey: Don.
Applying Pressure 131 . and we’re moving farther south. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. Abby: Well.is just about the most important thing we own. I’ll be glad never to see it again. which you would have to share if you want to retain half-ownership. Lacey and Don’s negotiations changed considerably. and neither of us put much in for upkeep.) Lacey: Don. Don and I are getting a divorce. and I’ll get back to you. After all. big news!! Don got his promotion. I’m surprised by your attitude. I thought you understood how important this boat is to Abby. the boat has depreciated. I have big news too. I was afraid something was going on when you all-butstopped joining us on the boat. but separately. Let me talk to her. Abby told Chloe about the divorce and about how she never wants to see the boat again. It just reminds me of how happy Don and I used to be. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. 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. he likely would have found himself in a stronger negotiating position. Abby: That boat. We’ll be leaving here for the Midwest. Don: Lacey. Chloe: Oh. (Around the same time. I’m sorry. I’ve been thinking. (After Lacey and Chloe had a chance to talk. It’s about time now for some major investment. Abby is having this conversation with Chloe) Chloe: Abby. Lacey: Cut it out. Don. though it’s not so happy.
Here’s how these negotiations went: Company president: Well. our production line changes at least three times a year. Union negotiator: The stock price might be down right now. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. I can’t see how today’s numbers really impact the long-term profitability of this company. The current stock price is the lowest it has ever been. I’m afraid that with this current information. they will make their decision based on a review of the stock price that day. And while these fluctuations have little to do with the health of the company itself. I’ll be going back to them as soon as next week. I read in the papers every day that the market is still strong. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other. the company president decided to use the stock price as a negotiating tool during the current union contract talks. in fact. but this has been such a crazy situation. I think you’ll have to agree with me that wage increases in this next contract will not be available. I’ll have to show them 132 50 Practical Negotiation Tactics . I’m telling you the stock price is having a huge impact on us already.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. the situation in the stock market is not good. and that the economy is strong. we will need to make drastic cuts in our operating costs just to survive. And as you know. I’ll be looking to you to make some major wage concessions on this upcoming contract. Company president: Well. in this global market.
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. So.that we’ve cut expenses to counter the losses in the stock market. let’s talk about it. Let’s get back together next week. the company’s position was weakened even more. and the union ended up with a substantial increase in their contract. Applying Pressure 133 . but I checked it out and it’s not totally true. he lost the trust of the union. Union negotiator: I know that’s what you told me. The union became hardened in its position that the employees needed wage increases in the new contract. (In the interim. We think this company is very healthy and can withstand the temporary downturn. here’s what happened. Company president: All right. If the stock goes up next week. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. but your proposal to cut wages is just not going to fly. Union negotiator: Well. no concessions! In fact. When the market took a swing up during the negotiations.) Union negotiator: I’m sorry. If you put it that way. Give me your proposal for wage concessions. When negotiations resumed. they would do a thorough analysis and look at the health of the company over the long haul. Conclusion Because the company’s president over-emphasized the impact of the market on the company. okay. They told union officials that it would be very rare for a bank to make its decision solely on stock price. we’d like to reopen talks on next year’s pay increase. the union checked into the Letter of Credit transaction with some experts in banking.
If one party threatens to walk out of the negotiations if a demand isn’t agreed to. it might backfire. they are bluffing. but Christy thought the relationship was heading in that direction. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. Both of them were still in graduate school and worked full-time. 134 50 Practical Negotiation Tactics . and she didn’t think Tom had.Tactic 33: Bluff! Bluff with caution. We don’t have that much free time together. I called Charlene and she was available. Poker players know all-too-well-that bluffing can be very costly. you will have lost credibility with your opponent. but I really am. so their “free” time was very limited. I guess I’m just surprised. This can come back to haunt you. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. You’re not upset about that. yeah. Charlene. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. either. I really hate it that you chose to see the movie with Charlene. Here’s how the discussion went: Christy: Tom. She knew that if she made such a demand and threatened to leave him unless he made a commitment. Sara said she saw you at the movies with Charlene yesterday. and they really have no intentions of doing so. I knew you had a class. and I really wanted to see the new Lenny Bruce movie. Tom: Oh. Example 1 Christy and Tom had been dating for about a year. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. are you? Christy: I don’t want to be. The couple had not discussed marriage. If you subsequently agree to begin talks again. There is a chance that the tactic will work and that both sides will agree to the proposal on the table.
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. Actually. The union negotiators. but very little progress had been made. If that’s not possible. I won’t go out with any woman friend. It really wasn’t a “date”—we just saw the same movie together. I’m not “dating” anyone else. she paid her own way. It’s made me realize that I want us to have an exclusive relationship. so he didn’t call her bluff. Tom: I have friends of long standing who are women. and at first he thought she might bluffing. 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. Since he wasn’t sure about that. It is. Conclusion Tom didn’t want to lose Christy. if you can’t make that kind of commitment. I just thought of her because I knew you weren’t available. Christy: I just can’t see it that way. He believed she was sincere. Applying Pressure 135 . Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. Tom: Okay.Tom: She’s a friend who happens to be a girl. he had to make a commitment or risk losing her. If Tom had “called” Christy’s bluff. I need to have your commitment that you won’t do that. Tom: You’re serious? It’s that important to you? Christy: Yes. I’m willing to risk losing you. She convinced Tom that her feelings were strong. I certainly don’t want to lose you.
or else we’ll be asking the membership to strike. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. Nexon: I’m just not prepared to give you one. We need some agreement on this today. Another bargaining session was scheduled. We’re not going to reach agreement on this at all. Nexon: I’m sorry. We need an answer today. it will cost too much. Nexon: We’ve got lots of issues to discuss. then all of our other demands will change. And I don’t believe you’re going to go call for a strike over this. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. Union: You’re wrong. If we’re not able to reach agreement on this. The union members ended up voting not to strike at this time. Why don’t we put this one aside for now. but working without benefits is simply not acceptable. Union: You don’t seem to understand. Many of our union members who are working part-time hope to work full-time. Second. First.) 136 50 Practical Negotiation Tactics . but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. much less today. we want the part-time workers to apply for and fill fulltime positions as they become available. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. This is a critical issue to us. we’re really prepared to go the distance on this benefits issue. Here is what happened at the next negotiations session: Nexon: I’m sorry. This is something we just have to have.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.
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.
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.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
while the other is not—that is. such as the advantage of time. once had to call a plumber in for emergency repairs. The owners of professional sports Applying Pressure 141 . for example. Since his toilet had overflowed and water was continuing to run all over the floor. there were times when there was no pressure and no emergency. and was forced to pay whatever they demanded. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. It is sometimes referred to as “pressure bargaining.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. He was at the mercy of the company that could install an appropriate unit the fastest. On the other hand. Example 2 Let’s face it: Sometimes one party holds all the cards. The same kind of thing happened a couple of years before that: In the middle of August. the guy was in no position to dicker over the price of the repair. not blessed with many household repair skills. Unions can strike at any time to achieve their goals if they have some leverage. Try bargaining with a plumber! This homeowner. his air-conditioning unit went out. its union has the advantage in the weeks just before Christmas. If the employer is a shipping and express mail company. when one side has “leverage” over the other.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. because this is the busiest time for that industry. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. he was able to successfully bargain for other services. Since the heating and air conditioning company held no leverage over him.
When the employer proposed adding duties to the job classifications. consider whether or not the two parties will likely meet again in the future to negotiate. either individually or through collective bargaining. On the other hand. however. A note of caution: Circumstances in one round of negotiations might give one side an advantage. he didn’t have to be flexible because the employees believed that they had no alternatives. Other employers find themselves in situations that actually reverse the leverage (when. benefits.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. but they are less willing to negotiate several months ahead. When one side places undue pressure on the other side. etc. What goes around comes around. If so.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. it is the union’s turn to hold firm on its demand). but before you choose such a tactic. If you have a special skill that an employer needs and few others have that skill. This gives it the upper hand in negotiating with employees. unemployment is low and jobs are plentiful. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. there are likely to be long-term repercussions. low employee motivation. the employer has the advantage: a supply of jobs. for example. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. then you are in a position where you can set reasonable demands on wages. and other undesired outcomes. will what goes around come around? 142 50 Practical Negotiation Tactics . The employees had no power to resist the demands of the employer. (Team owners are notoriously unpredictable. can suffer repercussions in the form of sabotage. if the unemployment rate is high and jobs are few. despite strong resistance. she has leverage and can more likely hold firm on her price. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms.
About an hour into the drive. Mom said so. Why? A sudden surprise can disrupt the dynamics of a negotiation. the fighting starts up again. and I can’t stand it. This time. Example 1 A father and his two daughters were on their way to visit the grandparents. you have it this part of the trip.) Dad: Stop it right now. Consider making a suggestion or a proposal that completely surprises your opponent. and Susie hid them under the seat. Andrea. Just share the doll. The doll can be shared. (In a few minutes. Susie: The doll belongs to both of us. the argument is over the doll’s shoes. and Susie. the little girls began to fight over the doll. (Their dad pulls to the side of the road and turns to face them in the back seat. Andrea had taken them off the doll. Just because you saw it first doesn’t make it yours. but use this tactic judiciously. Almost from the beginning of the three-hour drive. Their dad tried to reason with them. and here’s how the “negotiations” went: Dad: You two stop fighting. the girls had been fussy. We’ve got a long ride ahead of us. Andrea: Okay. Tell Susie to let me have it. You’re driving me nuts. I can’t drive if you keep this up. you have it when we drive home.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. because you will probably only get to use it once. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Andrea: The doll is mine. Susie: Okay.) Applying Pressure 143 . I took it out of the box.
and I hope I can convince you of that.Andrea: Give me the shoes back. Susie: Daddy didn’t say anything about the shoes. I want the shoes. so it was worth the risk. Dad tried correcting them a few more times. and reached back for the doll. Dolly doesn’t need shoes on in the car. He initiated the litigation against the local school board members and several banks that invested the money for the board. in fact. 144 50 Practical Negotiation Tactics . Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. Daddy said I got the doll on the way to Grandma’s house. (They continued to argue and whine and pinch each other. but nothing else up to that point was working. He grabbed it and threw it out the window. The tactic was so successful. Both Andrea and Susie were so shocked by their dad’s action. they didn’t say another word. She can have them later. to no avail.) Dad: Now there’s no more fighting over the doll. Dolly has to have her shoes. charging that they breached their duty in their handling these funds. at great expense to the auditor’s office and the school board. that they never fought over a toy in the back seat of the car again!! Example 2 The editor of a local newspaper was planning on writing an editorial critical of a locally elected auditor who had filed a very nasty lawsuit. he slowed down. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. The defendants contended that the auditor’s actions were politically motivated. Finally. The auditor asked to meet with the editor to explain his position. I think I have acted properly. Conclusion Dad’s use of a “surprise” tactic was extreme. The litigation itself had been going on for more than three years. and that they had invested and spent the tax dollars wisely. The local newspaper was prepared to urge the auditor to end the litigation.
this case needs to be dropped. This morning. They’ve been making that same argument from the beginning. one of the banks settled with my office. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. I guess we’re finished here. Auditor: Well. That’s really the reason this has gone on so long. but I have to warn you that from what I’ve seen and heard so far. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. perhaps you should just cut your losses—and just drop the suit. as a matter of fact. rather than drop the case. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. Thank you for coming in. and a significant amount of money will go toward the tax fund. the bank would not have done that had we not proven our case. I think I have something here that will convince you otherwise. We believe the other defendants will soon follow suit. Here are the papers. but recommended that the parties reach a settlement. but actually superior to some other entities you supervise. there’s just nothing to back up your allegations. From what I can see. Your reporters will probably want to follow up on it. Conclusion The editor wrote an editorial urging a resolution for the good of the community. Editor: Well.Editor: I’m certainly willing to listen. Editor: Well. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. I really think the community would be better off. Auditor: I appreciate their arguments. Applying Pressure 145 . Obviously. and it is costing your office money and good will. They are very persuasive that this is just a political battle.
but I think it will get a lot of use. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Mike knows he needs to get either his wife or his son on his side. especially Kevin. Mike: I know. and a car is more important to him than a pool table. Tina and their son Kevin are against the idea. Kevin is against it because he is turning 16 years-old soon. I know we’ll all enjoy it. Kevin: So am I. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. you might be able to dilute their power by identifying their different interests and addressing them separately. they’ll be mobile! The last thing I want is for them to be out cruising around. I can remember spending hours playing with my friends and family when I was growing up. I’d 146 50 Practical Negotiation Tactics . I want to talk about a car! Mike: It’s really not one or the other. Kevin: I don’t really care about a pool table. 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. although getting your license and getting a pool table are connected. try to focus on that subject or address that member directly to get them to be more amenable to your proposal.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. Dad. Tina: I’m really against this pool table idea. If the other side involves more than one person. night after night.
What happened? Applying Pressure 147 . received it without comment. Instead of both opposing the idea. I’m surprised. Tom. then maybe it’s not such a bad idea. I thought we were making real progress. A pool table could attract them here. the head of the union negotiating team. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. A number of contract changes have already been worked out and Wylma. Mike: I really do. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. Once Mike convinced Tina of the idea’s merits. And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. and Kevin and his friends use it often. Wylma was surprised the next day when Tom started the meeting off with an out-and-out rejection of the wage offer and made a demand for a wage increase of four times the company’s offer. only Kevin did.like them to hang out here more. the chief negotiator for the company. Wylma: Tom. Conclusion Mike found an argument that divided Tina and Kevin. But I’m not going to hang out here all the time. She noticed that Jim (another member of the union’s negotiating team. Kevin. Here’s how the negotiations went. some. she joined his side of the debate. don’t you think you guys would use it? Kevin: I guess so. has just presented the company’s initial wage offer. They bought the pool table. Tina: Well.
Do you think this is reasonable? Jim: (looking uncomfortable) Well. Tom: We don’t think so. Wylma: Tom. these are accurate. 148 50 Practical Negotiation Tactics . forcing them to reconsider their demand. you’ve seen our sales projections and production costs. these are our actual accounting figures. you’ve heard our demand. Let’s start again tomorrow morning. I think you need to rethink your demand. Your demand is totally unreasonable. Wylma: Let’s take a break. This is just what we think is fair. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. Wylma distributed copies of financial data that showed the company’s current condition. (When they resumed. you certainly are aware of our financial situation. but he added some workplace changes that Wylma was comfortable negotiating. Wylma: Jim. Tom had reduced his wage demand significantly. Jim? Jim: Yes.) Wylma: Now Tom. Right. But Tom. as Jim can point out to you.Tom: Wylma: Nothing happened. When the negotiations began again.
I don’t feel Christmas in the way I used to. married. You are almost 40 years old. Ever since Mom and Dad died. so what’s the point? I don’t need another tie! Madison: It’s not the gift. Cory: Madison. so pressure grew to draw names and exchange gifts. get over it. but the thought that matters. 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. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. the oldest and youngest Jones children. When all of their children were small. it was easy to agree on just giving presents to the children. but as the children grew up and had families of their own. and had children. so you can find a way to quickly neutralize it. I want to say something. Madison: Okay. We can’t afford to buy each other things we really need. That will just make a bad situation worse. Tempers flare and people say things they shouldn’t out of anger or frustration. but it should never be at anybody’s personal expense. especially between Madison and Cory. Sometimes the argument got heated. Example 1 The four Jones kids grew up. but it is really important to me. Applying Pressure 149 . Stay alert and watch for clues that a negotiation is about to get out of hand. Humor often works to break the tension of the room. and it makes me very sad. 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.Tactic 38: Break the Tension Tension is inevitable in most negotiations.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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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.
who was outside with older children. was ready to color. don’t you want to play? We could color before your mom comes. each side must decide whether or not one more compromise will produce an agreement that they will later regret. Example 1 Julie and Dara both attend a local preschool. the individual might be afraid that the exchange isn’t equitable).: Julie: Dara: Mr. 154 50 Practical Negotiation Tactics . and that doesn’t happen without compromise. The day-care worker wanted to take them outside for a while so that he could visit with his friend. Okay.” but she needed Dara to play with her. or maybe tomorrow.” Dara. they would have to play ball with older children.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. 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. Mr. I want to play “Princess” and I want Dara to be the “Prince. One day. C. how about going out to the yard for a while? You can swing or play ball. however. it is better not to compromise. (In a successful negotiation. At some point. When that point is reached. Then we can color. Julie wanted to play “dress-up. but since the other children in their room were not there.: Julie: Dara: Julie: Girls. I want to play “Prince and Princess. Isn’t it “later” yet? Right now would be a good time to go outside. If I can be the Princess. they were the last children left in the playroom for the remaining two hours of the day. If there is resistance to compromise. Both of the little girls liked to play ball when they were outside.” Can I color now? You said we would color later. not the Prince. Dara. the exchange will be between things of equal value. C.
and they still had time to color. They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. They did all the compromising they were willing to do.” No. Mr. C. or apply for a variance. We want to play dress-up and then color. the parking lot will start to look trashy. the owner had to supply additional parking. Conclusion The children stayed inside and played dress-up.: Julie: Hey. We don’t want to go outside. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. neighbors became concerned about the changes to the mall. The existing parking lot didn’t meet the current parking standards for that size theater. When his variance application was made public. however. wouldn’t you like to go outside first? After you swing for a while or play ball. you can come back in and play “Prince and Princess. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. failed to offer the children something that was as important as the plans they had made.Mr. C. and teenagers attracted by Making Progress 155 . The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. The owner decided to try for a variance. The owner and a small group of neighbors met to talk about these problems. 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. According to the city’s zoning laws.
Many of our homes back up to that lot. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. What if I changed the entrance to the middle of the lot? That way. if I agree to move the theater entrance to the south side. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. So. We’d like you to prohibit cars from entering or leaving from the south lot. Right now. even though I’m not adding any parking. but it’s not ever full. I could put a privacy fence along the east and west—at the backs of your yards. We’re just not convinced. and break in his door. In fact. Not having in and out traffic to the south of the mall is just not very practical. We hope you’re right. the south parking lot has not been used much. The neighbors: Owner: 156 50 Practical Negotiation Tactics . as you said. the north lot is used more. driveways on the south side of the mall are along the east and west side of the parking lot. With the Comedy Club and the grocery store on that end. not having direct access to the south lot from the street would be unworkable. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. You could have all of the traffic enter from the north lot. the closest parking to it is along Elm Street. lights in and out at night can be very annoying. Right now. with your plans to put the entrance of the theater on the east side of the mall. And. We’d really like to block off that cut-through and have the theater face the south. only when that lot is full would cars come around the mall and park on the south side. and we’d like to keep it that way.the theater will start to hang around and maybe wander around our yards at night. I’m afraid.
add a new entrance into the south lot. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. Making Progress 157 . then will you agree not to push for increased private security? Yes. put a privacy fence along both the east and west sides of the south lot. Teens can form into gangs if left unwatched. If I agree to move the theater entrance to the south. Agreed. there could still be access from the street to our garages—just not to the main parking area. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. And a year after the theater opened. the neighbors reported that they were very happy with the way it all worked out.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. set back a driveway width. and they discouraged patrons from parking on neighborhood streets. Conclusion Both sides had to give up something on certain items in order to reach agreement. If the fence was set back the width of a driveway onto your property. The fences created a buffer from the lights and noise. and make sure the parking lot is kept clean. The compromises were what everybody could live with. But you’re going to have to have some kind of security as well. however. Now you’re talking about considerable expense.
respectful. Present your position forcefully. This gives you an advantage. and that as angry as they were. Joan was already pretty tired. incident was usual or unusual. 158 50 Practical Negotiation Tactics . 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. They might even start to underestimate your negotiating skills. and pleasant always enhances one’s ability to reach an agreement. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives.. she just didn’t think it was a serious problem. Lonely’s only companionship. just forget it. but be friendly. because you are the one to set the tone for agreement. and I just moved in next door. I’m Joan. Joan: Hi. Mrs.m. Lonely. She didn’t believe her neighbors ought to complain about the barking. professional. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. She learned that everyone in the neighborhood had complained at least once. The dog was Mrs. they had gotten nowhere. If your opponent is aggressive or angry. and didn’t stop until 6:00 a. but going out of your way to be friendly is an especially helpful tactic.m. and what kind of complaints might have already been made. Mrs. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. and because she was hard of hearing. Joan had a new baby. thinking that you will be just as easy to work with on the sticky issues. Lonely: If you’re here to complain about my Rocky. Close your windows at night and don’t listen. and started to get upset. so her neighbor’s barking dog came as an unpleasant surprise. Joan decided to at least try and talk to the neighbor.m. Example 1 Joan was new to the neighborhood.Tactic 40: Be Friendly Being polite. Your opponent might give in readily.
Here’s my little angel. I’d like to introduce you to my new baby. too. When he does. He’s a real comfort to me. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. sure. I need to get the baby home. How long have you had him? Almost eight years now. The barking at night has been mentioned to me. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. by the way. though. Mikey. He’s been keeping me up at night. it’s probably because they just haven’t had the time to get to know him. Lonely: Joan: No. I know that some of these people around here don’t like him. Lonely again.Joan: Mrs. isn’t he cute! He’s a handful. I just wanted to come by and introduce myself. Lonely: Joan: Mrs. I stopped by and visited with him over the fence this morning. Well. don’t worry about that. Who. I can’t pay for something like that. Maybe I could come back tomorrow and bring him? Oh. not at all. Do you think his age has contributed to some of that? You know. I’ve only got my Social Security. (Joan’s sleep was disturbed by another night of barking. No. I’ve got a friend who is a veterinarian. I might have to talk to you about Rocky. Making Progress 159 . but she took her baby and went to visit Mrs.) Hi. I guess that would be okay. then. is a really sweet dog. Lonely: Joan: Mrs. I’ll see you. I sure hope he starts sleeping through the night soon. I guess so. Lonely: Joan: Mrs. Why. Lonely: Joan: Mrs. Well. no.
Conclusion Joan’s friendly approach enabled her to understand Mrs. the mayor called and asked for a meeting with Company ZZZ officials. Company ZZZ: (surprised) Well.A.. that’s very understanding of you. he prescribed medicine that gave Rocky a more regular sleep schedule. It’s very difficult to make a move of this type without having it leak out. overseeing a factory in Mexico and selling products in the states. Lonely and Rocky. 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. agreed to meet with the mayor. Lonely’s needs and arrive at a workable solution to the problem. After Joan’s veterinarian friend visited with Mrs. its 150 management and sales employees could continue to work in Happy City. They anticipated that it would be an unpleasant meeting. U.S. that the press got hold of the story of our company’s activities before we could call you to let you know. 160 50 Practical Negotiation Tactics . Here’s how the meeting went: Company ZZZ: We’re very sorry. I think that if you could have let me know ahead of time. of course. When he heard the news on the radio. Joan took up contributions from the neighbors. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. Hearing about this from the press obviously puts you in a very embarrassing situation. Mayor: (very friendly) I understand how these things happen. recognizing that the layoffs would be an issue in upcoming local elections. Lonely didn’t have to pay for the medicine she could not afford. you would have. The barking all but stopped. Company ZZZ. and Mrs. Under its new corporate structure.
and I want them to know that. They need a really good deal on the plant price. 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. We just haven’t heard anything yet. 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. This strategy worked. By the way. Making Progress 161 . You’ve been very understanding about this. because I’d hate for us not to make an appropriate pitch to them. the 150 management/sales jobs did end up moving to Mexico. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. Mayor: Please let me know as soon as you can. Mayor: Great! Let me know when we can talk again. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. 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. so we need to understand how we can affect their decision on keeping an office here. We recognize that your new corporate owner is a large company located in Malaysia. Many laid-off employees did indeed find new jobs at the plant. the city has a potential buyer for your plant building. The buyer is a “disadvantaged business” we have been working with for some time. Unfortunately.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. and the mayor was reelected. Company ZZZ: I’m not sure what to tell you on that.
threats. Michael Wood. and Alexis. South Carolina. Somehow. until Susan said they would evenly split what they bought.00. Example 1 Susan. The effect on the other party might be even more substantial if lies. Conclusion For the first time in her life.00 to spend. Alexis then played the tape for her father. Alexis. but Susan had only $20. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Jones’s supervisor. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. He asked his elder daughter about the arrangement. this time in front of a hidden recorder. were on vacation with their parents in Myrtle Beach. age 14. Then he played the tape. Alexis knew this was not fair. had $40. the accused. 162 50 Practical Negotiation Tactics . She borrowed a tape recorder so she could ask her father if this was a fair deal. the younger sister. They might worry that the tapes will be made public or given to others. Susan denied it. the investigator. or simply “bad faith” methods have been used by the other party. Alexis agreed. are talking about a possible settlement of the issue. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Susan understood the impact a tape recording can have when it reveals a lie. who was disappointed to hear that she might propose such a deal. The two sisters had saved up a little money so that they could buy souvenirs. and Jones.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. age 15. thus becoming a source of embarrassment. Fred Adams. or used to pressure the other side to agree to certain demands. Susan repeated her demand.
Stuart. stares. Mr. he also lost his negotiating position. Ruiz and Ms. So. He failed to think about what might be the next step. Mr. (a long pause) I want to see my lawyer. Starr.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. Making Progress 163 . I simply asked her to make copies for me as quickly as possible. to quote you. Well. So you refuse to repeat the answers you just gave us? Yes.” meaning something other than copies? No. Your request. No one could have possibly misunderstood your intentions? No reasonable person. But by refusing to repeat his answers. “Do what I want. exactly what you said to Ms. When Adams set the tape recorder on the table and revealed that he had witnesses. Jones suddenly realized that his strategy would not work. You never touched any part of her body? Not even accidentally? No. And please describe your general manner. I’ve brought a tape recorder with me. And you did not threaten her job if she did not. and now I’ll ask you to repeat your answers—on tape. Jones. and gestures did not have a single hint of sexual implication or innuendo? None at all. Appleton both claim they saw the incident and will testify. I think I can write my recommendation. Conclusion Jones had knowingly lied when he denied the charges. you are aware that the next step in this process is to ask witnesses to come forth.
is usually careful about dividing the object into two equal parts. with the remaining part going to the person who did the dividing. one person is given the task of dividing the object(s) into two parts. Maria and Roberto: No.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. Their dad instructed them to share the candy bar. Realizing the potential of getting the “smaller half. the classic “split and choose” tactic might be the best way to settle the issue. 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. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. Maria. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. because you did the cutting. Roberto will get to choose which half he wants. Oh.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. which certainly is large enough (he naively thought) for two young children to easily share.” the divider. take this knife and slice the Snickers into two halves. of course. The second person then chooses which of the two parts they will receive. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . Many of us learned this one from our parents: After two people agree to the strategy.
000. There is only one place for an access road that must serve all lots. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Give me the map and a pencil. Archie: Here is the map. Lots must be at least one acre to be developed. Clarence agrees to divide it. Example 2 Two friends and business partners. The problem is that one of us will get four lakefront lots and the other will only get three lots. jointly purchased fourteen acres of lakefront property several years ago. That makes them more desirable. Archie: That’s true. even children. I don’t really care which lakefront lots I keep. quickly recognize the fairness of the divideand-choose method. They have a recent appraisal that values the property at $150. and wants to divide it into two separate parcels.Conclusion When two people desire the same object and it is something that can be divided in some way. They all have a great view and are equally desirable to build on. Clarence and Archie. according to county deed restrictions. 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. both parties. Deal? Clarence: Sure. so we should be able to divide the property fairly. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. Archie is ready to build a retirement home on the property. but is not sure how to arrive at a fair split. Then I will choose which parcel I want. Clarence: Right. Archie: I really don’t care either. Making Progress 165 . The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. that sounds fair.
and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics .Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. Archie chose the parcel with the three lakefront lots. and both men were happy with the arrangement.
attach legs. miles from their home. is expected to dicker over the price. His tactic was to throw in a “nickel” in order to make lots of “dollars. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). Jason was having a hard time getting the salesman to lower the price.” Under store policy.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. “Okay. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. we’ll take the suite if you’ll throw in free delivery and set up the furniture. supposedly the bargainer in the household. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. What started out as a single issue is now a combination of a major issue and a much smaller issue. he also set up all of the furniture in a second-floor bedroom. 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 . However. With a great deal of effort. etc. Her husband Jason. Conclusion The amount the couple spent was fairly large. and the delivery carrier doesn’t set up mirrors. Brenda did her part when she said.” Many people have witnessed or used this effective negotiating tactic. delivery was limited to a small geographical area. so the salesperson delivered the suite himself.” thus extending the scope of the negotiations.
important item. At the end of negotiations. In one case. This experienced bargainer said. we’ll agree to Health Plan A with another ½ cent on the pension fund.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. it can be a dealbreaker. If one party misjudges the situation.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. “Okay. so be prepared to withdraw the nickel and dime item at the hint of trouble. 168 50 Practical Negotiation Tactics . If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. 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.
Kathy: I suggest we take turns choosing which of these things we want. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. and performance evaluations for people to come across as likeable. Kathy: I’ll take the pool table. Kathy: Then I’ll take the couch and love seat. Donna: I’ll take the bar with stools. Donna: They match. but they are two pieces of furniture. or knowledgeable. and all the rest is small junk. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . People tend to make an effort to put their best foot forward.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Donna: No way! These are the last two pieces of furniture. I’ll take the color TV. decision-making meetings. Kathy: But they are a matched set. trustworthy. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. thus creating the impression in others that the good qualities they see are present all the time. This creates what is called a “halo effect. Donna: Okay. You can go first.
what can we do? Give me the couch and love seat! No. (Pause) We’ve got to settle this today and get this stuff moved. with a record of labor involvement that included three recent strikes. and ask him if the couch and chair should be one item or two. 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. Example 2 During a heated labor negotiation. What for? Tell him the situation. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. Johnny had the “halo” of an honest person. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. Let’s call Johnny Ryan. and if the bar and stools should be one item or two. He might or might not have also been a good arbitrator. I want the stools. and he has always struck me as an honest person. I want the love seat. The union negotiators. 170 50 Practical Negotiation Tactics . I trust his judgment.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. Good idea. He’s our cousin.
The teams took a weekend break from the stalled negotiations.simply did not trust the management team. the city management again hired Boston. He said he believed that it would work as presented by management. During the break. when negotiations again stalled on a retirement plan issue. thus bringing the negotiations to a conclusion. without any reservations. as a consultant to review their proposal. Boston went to the negotiation table with the management team. Two weeks later. the consultant did not speak. This time. but the power of the so-called halo effect was great. They might have stretched his halo farther than his expertise and experience warranted. The union accepted the proposal. even if the proposal appeared to be valid. 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. and that he did. Boston was widely known as a totally honest man who speaks his mind. but his mere presence caused the union leaders to accept a management point as valid. the former union president. On Monday. the management team hired Sam Boston. He solemnly told the union negotiators that he had been hired to review it. Making Progress 171 .
has owned the house for 24 years and is downsizing to a condo. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. $229. and $237. This offer is for more money than any four-bedroom houses on this neighborhood list. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Sometimes. the other party will ignore or refuse to believe the information.000. 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. The owner. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. but the key is to gather facts that you might need—not just the facts that you will need.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. $235. Sam Jones.000. They believe it is overpriced. $237. but you’ve priced it way too high. but the right facts presented at the right time can chill or astound and completely turn things around.000. They sold for: $225. We love your house. (Next day) We’ve reviewed the records you’ve produced.000. and we are countering with an offer of $250. I’ll get back to you. What? That’s $35.000.000.000. but we feel that it’s a fair offer.500.000 under the listing price! We realize that. Here’s a list of the five that are about the same size as yours.
400 each. Hatfield: My staff has done a lot of research.000.000 each. He found facts that supported his position. I’ll be… Okay. I asked for a list of all new PCs bought this year. Making Progress 173 .Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Order the new computers. Well… We have a written counter of $245. let’s not worry about it. The last 20 were over $2. and did his homework. Conclusion Hatfield had anticipated what his supervisor’s position would be. That’s the bottom price. No one can go over $1. We’ve talked with purchasing and we have the authority to buy seven for $2. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price.600 unless the company president approves. Conclusion The Joneses had based their asking price on the advice of a friend. You can’t pay more than $1. Example 2 Supervisor: You know the policy. if other departments have ignored the policy. I’ll get called on the carpet. Here it is.600 for a computer. Hatfield: While I was at purchasing. We accept. who was not particularly knoledgeable about real estate. Supervisor: Well. Supervisor: If I okay this purchase order. and we know that only this model will meet our needs. and wisely chose exactly when to present them in order to make his point.
I can do that within the rules. and two are for my husband. Maureen. I want two of these. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. If you trust me. I can’t check out these four books? Jenny (Librarian): That’s the policy. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. Would I do that? Jenny: Maureen. reveal misperceptions or lack of knowledge about positions that can be corrected.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. Maureen: Well. But I can’t break the limit rule—it is an absolute rule here. They can help you identify or better understand what the other side really wants. I trust you. can you check out two on a card for him? Jenny: Well. A maximum of three books can be checked out to a person at any one time. Maureen: Well. but you don’t want to jeopardize your job? Jenny: Yes. some people would have forty or fifty books out at the same time. and they would all be unavailable to others. 174 50 Practical Negotiation Tactics . Example 1 Maureen: What. The effective use of probing questions can help achieve a favorable settlement. you know me. I’m sure you would not. Maureen: So you trust me with the books. Otherwise. but I don’t set the policy and I can’t make exceptions. yes.
and Kenzie. Mary and Kenzie? They are 2-3 pay grades below us. If that data ended up in the wrong hands. What’s the policy number or date of approval? I don’t know.Conclusion Maureen used probing questions to uncover a way to solve her problem and make it easy for Jenny to stay within the library rules. They say it’s a security issue. Can you get me the number? Sure. it could kill us. I couldn’t find anyone who knew it. Brooks. Who does have access clearance? Mike. and they don’t even have a use for the sales data. Security? Right. but it’s because you don’t have access clearance. Making Progress 175 . Babu. Jay. we can’t do that. Mary. Sue. (Next day) Do you have the policy about giving out product sales information? No. Why? Some policy? Yes. are you sure I can’t get your information technology people to give us direct information on product sales? No. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. But this forces us to make decisions without complete information! Yes.
I’ll sign now. Jack was able to receive clearance as well. I’ll get it for you ASAP. Once he discovered that employees in lower pay grades had access clearance.P. Jack: Here.Mark: Well. 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. Jack: Can you ask your V. 176 50 Practical Negotiation Tactics . When can I get the data? Mark: Today.… (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. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. if we can have access? Mark: I guess so.
or even months after the first offer is presented. and the child learns an important lesson about life. When multiple issues are at stake and most have been agreed upon during negotiations. 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. this tactic can produce an agreement. 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). Tactic #49 (Final-Offer Arbitration) should bring about a settlement. hours. 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.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. 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). 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. this process can easily result in a final settlement. If friends or neighbors need to settle something but prefer to avoid the negotiation process. They bring it out when a dispute arises. When two parties believe they have an oral agreement. T Reaching Agreement 177 . days. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process.
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. Let’s do go to Virginia Beach and Washington D. She said. As he hugged her. off-again discussions. Nancy brought up the subject of vacation again after dinner.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. 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. 2) allows the other side to feel the release that comes with completing the bargain.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. They both have stressful jobs and look forward to their annual vacation together. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. 3) and adds one last key demand to the congratulation sentence. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. but his wife Nancy likes to stay put and relax. Larry Snyder gets bored staying in any one place for many days.C. D.” Conclusion The husband was so excited about visiting Washington. After days and weeks of on-again.C. His wife had carefully planned her exact “premature” vacation agreement. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Example 2 Negotiations can take a long time and incorporate many issues.
he turned on a large warm smile and extended his hand to shake. My team had convinced me that doubling the time frame would create a real problem on the shop floor. we made some small concessions on financial matters. because it makes you pretty vulnerable. It was so close. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. but also that they sensed the weariness of my team. My team was afraid we would not even come to an agreement. and rested. When the chief negotiator emerged with his team and headed toward my team.” Bob: Ted timed this perfectly. We all knew that it could come down to agreement or strike. but the other side continued to ask for 60 days. The celebration had begun.) Here’s what happened: Bob: I knew that the other side was similarly harried.almost willing to accept any deal. One operating issue involved the probation period for new employees. (This is a bad position to be in. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. I felt the tension in the room. One of the best pieces of negotiation advice is to remain fresh. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. “It was hard for us. Ted said. Therefore. There were grins and handshakes coming from the other side. but we agree to everything in your final proposal…” Members of my team shouted hooray. but held firm on remaining operating principles. In our last offer. The old agreement specified a 30-day period. symbolizing that he was agreeing to the entire final offer. fit. as the negotiator came closer. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. However. Reaching Agreement 179 . but acceptable. “…as long as you give us a 45-day probation period.
180 50 Practical Negotiation Tactics . However. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. 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.
Sue: Well. I don’t want to negotiate. but my Avalon is a good car. I like it. Your opponent will have to either let you go and run the risk that things are really over. be sure you think this through beforehand. but his Avalon has been a good car. what can you do on a 36-month lease? Reaching Agreement 181 . all from Sue Wilson.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. The next morning. Jay. but I thought I might want to try a new Highlander. the following exchange occurs. He stopped by Pembroke one day to look at the new models. Sue: I remember you. (Vahaly drives the new Highlander home. He really likes it. My name is Jay Vahaly. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. a veteran salesperson. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. I’ve worked with you before. how did you like it? Jay: Okay. You had time to assess my car. You bought your wife a new van just last year. if I roll over the lease to a Highlander. Jay. Jay: Hi. or go after you and perhaps make a new concession in order to get you back to the table. here are your keys.) Jay: Sue. right? Jay: Yes. too. and he can simply buy it when the lease expires. and the lease on my Avalon is about to expire. Whether you are really bluffing or you are serious.
These Highlanders are hot items! Jay: Well. That was the figure he was looking for. Jay. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. Sue called him as soon as he walked in the door and offered another $50 break on the lease. (He walks away) Sue: No. (Jay got in his car and drove home. They’ve talked about retiring in recent months. Jay. Sue: I’ll try. He effectively used the walk-away tactic to let Sue know that he was firm on the price. I thought I’d get a fair deal. $100 more. a successful musical instrument sales and rental store. (15 minutes later) Sue: Well.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. Jay: What? I was thinking the lease payment would be. they came down to $199 more on a thirty-six month lease. at most. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. Please go back and work out a lower lease payment.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Jay accepted. Sue: Sorry. He was prepared to keep his Avalon if the lease was even $1 more than his limit. Jay—wait. I’m disappointed. Let me try again. but 182 50 Practical Negotiation Tactics .
let’s eat lunch.5 million for the building. a local developer. and I’m not interested in less.both of them love their store. Michael: Well. Reaching Agreement 183 . today. after no contact from Larry or Judy. and I only need your building to own it. but their continued walkout convinced Michael that they would hold firm. Larry: Yes.0 million. so why are you here? Michael: I’ve discussed it with my partners.5 million. Michael: I have a check right here for 4. He met with Bizannes twice before. I still want to develop this block. What do you think? Judy: Larry.5 million. with a certified check. Larry. and we gave you our price. You rejected it. come out here! (Judy comes out from the back room. they were prepared to accept $5.) Larry: Michael is here again. Michael Roberts. Larry: Judy. go back to your office. Michael calls on them again with a check for $5. Judy: Larry. and he is offering us $4. Michael: Good morning.) 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. which the Bizannes accept. visited their store. (Judy and Larry walk into the back room and close the door. and I’m prepared to offer you $4. In reality. One day. Two months later. our accountant said it’s worth $6 million. Larry: Michael. you’ve already told us that.5 million. Larry.
which is generally voluntary. In mediation. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. Both involve the use of third parties who are objective. I won’t take it. That was the deal. In ﬁnal offer arbitration. Jenny: No. Jenny told them to sell it.000. Example 1 Jenny and Lynne are sisters. Lynne responded that this was their intention. and would be able to restore hers as well. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. 184 50 Practical Negotiation Tactics . Six months later. We have a few dollars invested in parts and we had fun working on it. They inform her that they put the machine on e-Bay and have an offer of $1. Each party wants their offer chosen. Lynne and Gary bring the restored Singer to Jenny’s house. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. One day Lynne dropped by for a visit and the discussion turned to the old Singer. Lynne told Jenny that she and her husband Gary have restored two other Singers. Let’s split the money. both sides have agreed in writing to accept the arbitrator’s decision. Jenny has an antique Singer sewing machine.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). which she has kept in a barn for over ten years. but they wanted to give Jenny $500 for her “share” of the machine. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision.000. Lynne: No. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. In most arbitrations. 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). In arbitration. I offered it to you for nothing. Keep the $1.
At best. but we’ve made no movement on any of them since we started.) Judge Ryan: Here is my written. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. Tina. Ralph: I know. first on the health insurance co-pay. we are down to only three unresolved items. My troops are getting restless. Example 2 Ralph: Well. based Reaching Agreement 185 . Tina: Yes. I can’t see any way to reach an agreement. the old machine was only worth $50 when Lynne hauled it away. since he could only choose one offer. Tina: Good.” Lynne proposed a 50-50 split. They should get the other $950. on Friday. so I am invoking the finaloffer arbitration ground rule we have in place. Any increase in value was due to the work of Gary and Lynne. after six weeks of negotiating. he did not need to “haggle” with them. Ralph: Right! (Friday at 3:00 p.m. binding decision on the three items. As a brief explanation. I have chosen management’s offer to keep it as it is under the current contract. (One week later) I think Jenny’s position is the most reasonable. and meet back here in 72 hours—3:00 p. Their father found Jenny’s position to be the most reasonable. I’ll buy that. Then we both submit our final offers to Judge Ryan within 48 hours.Jenny: Dad: Okay.m. The union’s position could have run into millions of dollars.
nor why their method was superior. Now let’s get a signed contract. I have chosen the union’s final offer. but we agreed to this process. 186 50 Practical Negotiation Tactics . Well. Ralph. money. and peacefully finalize a contract that contained several important gains for both sides. and an item that large should have been negotiated at the table. I’m not happy with your decisions. Conclusion The final-offer arbitration process enabled the parties to gain a fast. At least we both saved time. Second.Ralph: Tina: on last year’s data. and stress. I have chosen management’s offer because the union did not justify why the past practice should be changed.000—less than 1 percent of the total package. Finally. It will only cost $120. reasonable resolution to their last three unresolved issues. on the merit pool distribution method issue. on the clothing allowance. No increase has been given for six years. I’m sure you realize that we could have taken six more weeks to reach the same point.
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. however. and decided to stop by to see if they liked the house. If we shake hands on it right now. During a discussion. The owners were selling the house without a real estate agent. Bill and Paulette fell in love with the house. They were not the only couple to come to the open house. We’d like to make you an offer of $150. Seller: Yes. and one of the other couples looked very interested. all the usual stuff in a sale.000. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. Seller: We’re asking $152. they looked at this particular house on their own. At the very least. Example 1 Bill and Paulette had been house-hunting for some time.000. Obviously. we won’t be involving our real estate agent. and felt that they would have to work fast to make an offer before someone else did. not the furniture. everyone is busy grappling with the details of the negotiations. and while Bill and Paulette had been using an agent to help locate houses. Bill pulled the seller aside. Bill: Reaching Agreement 187 . They finally looked at a house they really liked. They saw the “For Sale” and “Open House” signs. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. The 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.
The supervisor assured the employer that there was no basis for her complaint. and had been prepared to drop his price to $145. In her complaint. the refrigerator. Let me just get the standard “offer of sale” form and fill out what I hear you saying. he left the price at $150. and two area rugs. It worked. in fact. and the two area rugs were specifically included. When he had the chance to put the deal in writing.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. The supervisor pointed out that he had a staff of 20 or so women. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . Conclusion The seller had always intended to leave the garbage disposal. Bill: (pleasantly surprised to learn that the garbage disposal. then we have a deal. Under the section for appliances to be left on the property. the hutch. and the garbage disposal. and that the problems with her job performance were.000. she said that her supervisor had repeatedly asked her out. the hutch. he listed an attached hutch in the kitchen. all window blinds and drapes. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. since he probably would have missed them) Yes. that’s what I meant. (The seller recorded the offer of $150. but I’d like to make sure there are no misunderstandings.000.) Seller: So. he listed the stove. In the section for fixtures and miscellaneous items to be left on the property. the house is yours. a public agency. Seller: Okay. If it’s what you meant. real. he began to have “problems” with her job performance. and the two area rugs. Sign here. look this over.Seller: Just a minute. Example 2 Monica brought a sex discrimination charge against her employer. I think we can work something out.
then Monica had to acknowledge that the supervisor did nothing wrong. drawn-out. Look. my client is supposed to formally withdraw the complaint rather than just settle it. It might be standard when there’s a settlement. by this time. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. You’re just trying to make it seem as if your supervisor did nothing wrong. Withdrawing.000. He’s happy to prove that in court. you didn’t mention in the agreement that in exchange for the $100. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. but it’s not standard when a complaint is formally withdrawn. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. and expensive matter.000. even though we’re certain we would prevail.000. but said that fighting the charges would be a long. The supervisor insisted that if the employer felt he had to settle.000. And the confidentiality clause is standard. Monica had.there was little basis for the complaint. and must agree not to tell anyone about 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. Why’s that? Well. But the employer doesn’t want to go through the expense and publicity of a trial. I’m He: She: He: Reaching Agreement 189 .000 without actually having to prove anything. He offered to send settlement agreement papers to her. even though you are paying Monica because we can prove he did do something wrong. settling—What difference does it make to her? She’s getting her $100.
She: authorized to pay $200. 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. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. to his disadvantage. 190 50 Practical Negotiation Tactics .000 and the conditions of the offer.000. It was made clear that the employer had paid the additional $100. but word did get out that a public agency paid $200.000.000 when all that was asked for was $100. Monica accepted the $200. 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. There was a confidentiality agreement. I’ll take your offer back to her and let you know.
I thought you said something else. If the agreement reached at the time had been put into writing with all three sisters signing it. and when they agree to solve problems together. even an informal agreement benefits from some type of written documentation. a written document is hardly necessary. and contract. most certainly needs to be in written form. “Oh. then the parties have to abide by the agreement. commitment. Putting the Agreement in Writing 191 . but it was not what I meant.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see.” Clear communication is essential if you want to reach an agreement and have it abided by. A union contract. As these examples of personal and business negotiations show. however. it is much more effective in the long run when the parties enter into “win-win” agreements. A Communication Hearing is not necessarily the same as listening. Unfortunately. rather than attack each other. Reaching an agreement is the first step. of course. Putting an agreement into writing serves three purposes: communication. but some of the decisions were put off for a couple of months. reaching an agreement is sometimes a long and difficult process. Think of how often you have said to someone. operating under an agreement after it has been reached can be even more difficult. The degree of detail and formality of a written document will. it would have been easier to resume negotiations at a later date. depend on the kind of negotiations in which you are involved. talking is not always the same thing as communicating. When two friends agree on what movie to see. “That may be what I said. However. In Tactic #17 (Package Items). when they engage in honest “give and take” negotiations. Certainly someone has said to you. the three sisters reached an amiable agreement. One way to help the parties abide by an agreement is to put it into written form.” By the same token.
nine hundred and forty-four dollars—$22. 192 50 Practical Negotiation Tactics . Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. the price is spelled out in the loan document as “twenty-two thousand. 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. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester.944. When you create a written record of the details of an agreement. The sender wishes to convey an idea. you have created something tangible that can be referred to in the future when memories become fuzzy. a couple of months away. 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. Who isn’t excited about buying a brand new SUV or truck? Until. When communication is limited to the spoken word only. The receiver has to decode the message being sent by trying to understand and interpret the words. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. or express a thought or emotion through words. sounds. In Tactic #4 (Use Objective Criteria). or movements being used by the sender.” In Tactic #14 (Don’t Always Hide Your Weaknesses). seek information. And because the sender and the receiver are two unique individuals.Communication is a process that involves a sender and a receiver. or movements. If Jason fails to live up to his side of the deal. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. he can be reminded of the details because it’s all there in black and white. pictures. sounds. that is. His mom could more easily enforce the agreement if she had it in writing. pictures. the message being conveyed and received might be understood differently. 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. when. before the trip. which. 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. what. your plants die because the house-sitter wasn’t told to water them. If you have agreed to pay someone to house-sit while your family is on vacation. the address and description of the real property. why. signed. pulling an agreement in writing. where. Generally. have your spouse also agree to the details of the agreement. the real estate contract includes information about the buyer and seller. and dated agreement.Contract Finally. how many. WHAT? The written document should clearly describe the item(s) covered by the agreement. or it isn’t an agreement—it’s merely the conveying of a gift. You can do this more formally by taking them to court (perhaps as a last resort). One party wishes to buy what the other wishes to sell. protect yourself by having a written. as many people learn when they purchase a home. and so on in standard contract form. WHO? Provide of the full names the parties necessary to the agreement. In either case. and getting all the parties to sign it usually creates an enforceable contract. which kind of. However. Here’s what we mean. ask yourself the basic questions of who. and how much. Failure to do so can lead to big problems. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. Carefully and completely describe the subject matter of the agreement. 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. leading to misunderstandings and contract disputes. in writing. and put that information into the document. dating it. details such as what fixtures stay or what appliances go can be easily overlooked. one party will change behavior in exchange for something of value from the party who wants the behavior changed. Putting the Agreement in Writing 193 . When you are ready to commit yourself in writing. one party will work if the other party pays for the work. say.
how much or how many. 194 50 Practical Negotiation Tactics . The more-specific and clear these details are. dating it. and having all parties sign it ensures that the parties have. in fact. which one or which kind of. Putting an agreement in writing. It gives the parties an opportunity to really buy into the deal. depending upon the deal: when or where. And it can create a tangible reminder of the deal (or an enforceable agreement. agreed to the same thing. the better.The remaining questions fill in the details of the agreement. if that becomes necessary).
and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 .Name of Negotiation Tactic 1. ________________ 7. ________________ 3. ________________ 2. ________________ 5. ________________ 10. ________________ 9. ________________ 8. ________________ 6. ________________ 4.
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Heavrin. 1991. David. Negotiation Skills. 1987. W. M. R. Kennedy. 1999. Saunders. Cohen. Maddux. R. J.: Waveland Press.E. Fisher. Inc. Inc. D. New Jersey: Prentice-Hall. Oakland. and J. LittleJohn. 1988. 1991. Fuller. Upper Saddle River. You Can Negotiate Anything. Herb. New Jersey: Prentice-Hall. Patton. 1997. Inc. and S. Clark. Sharpe. and J. New York: Bantam Books. McKay. Calif. 2001. E. Roger. New York: Basil Blackwell. and C. 2nd ed. New York: M. Gotbaum. Fiske. M. Upper Saddle River. W. Brown. Ill. 2004. C. Inc. K. 2nd ed. Ury. and B. Calif. Roger. Eshelman. Gavin. Patrick J. Chicago: Richard D. Inc. Inc.: Crisp Publications. Getting Together: Building Relationships As We Negotiate. Fisher. 1988. Minton. Getting to Yes: Negotiating Agreement Without Giving In. 7th ed. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. University of Missouri: Columbia Press. Practice. and M. 1980. The Negotiation Handbook. The Essentials of Negotiation.. The Relaxation and Stress Reduction Workbook. R. References 199 . New York: Simon and Schuster. Lewicki. New York: Penguin Books. 1989.. Los Altos. Negotiating in the Real World. George. Domenici. Prospect Heights. Mediation.: New Harbinger Publications. The Negotiator’s Handbook. Inc. Irwin. 1996. New York: Penguin Books. Pocket Negotiator. and S. and Law. 2001. Labor Relations and Collective Bargaining: Cases.REFERENCES Carrell. M. Victor. Cleary.
Ury. Labor Relations in a Global Economy. New York: Simon and Schuster. Cambridge. G. Raiffa. Bargaining for Advantage. R. Stulberg. The Art and Science of Negotiation. The Eight Essential Steps to Conflict Resolution. Shell. Massachusetts: PON Books. 1982. L. Gerald I. Howard. Howard. Sharpe. William. 1981. Lexington. Dudley.negotiationsources. 1996. Thompson.Nierenberg. 1991. New York: Penguin Putnam. Upper Saddle River. Cambridge. The Art of Negotiating. New York: Bantam Books. Massachusetts: D. www. Heath and Company. Taking Charge/Managing Conflict. Raiffa. New York: Viking Press. Inc. Inc. Inc. J. Massachusetts: Harvard University Press.E. The Mind and Heart of a Negotiator. 1998. Inc. C. 1994.org 200 50 Practical Negotiation Tactics . George. 1987. Getting Past No: Negotiating with Difficult People. Tsogas. Weeks. 2001. Lectures on Negotiation Analysis. B. New Jersey: PrenticeHall. New York: M. 1999.
and Public Personnel Management. 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 . Bakersfield. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal.ABOUT THE AUTHORS ichael R. Carrell are in the fields of collective bargaining and labor relations. The Journal of Accountancy Training. which is located in the greater Cincinnati area. Human Resource Management. HR Magazine. The Personnel Administrator. M Christina Heavrin J. The University of Nebraska-Omaha. Carrell has held academic positions at California State University. organizational behavior. in Economics from the University of Louisville. In addition to negotiating numerous litigation settlements and contracts. Business Forum. and MBA and B. and served as President of the Board and Mayor Pro-tem for three terms. The Academy of Management Review. Dr. Organizational Behavior and Human Performance. In addition. Personnel. he was elected to the City of Louisville Board of Aldermen for five terms. Personnel Journal. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. Books published by Dr. Labor Law Journal. Morehead State University. Marshall University.D. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. During his academic career he has received awards for both outstanding research and teaching. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. and negotiations. He received his doctorate from the University of Kentucky.A. and the University of Louisville. Carrell is Dean of the College of Business at Northern Kentucky University.
Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 202 50 Practical Negotiation Tactics .park and a successful industrial park in the City’s enterprise zone. the City and a for-profit hospital for guaranteed indigent health care services for city residents. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. an agreement between the State of Kentucky. Ms. Jefferson County. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs.
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