SECTION I: INTRODUCTION

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

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

or even skipped altogether. The Comprehensive Model Negotiation is more of an art than a science. stages can be combined. 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. 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. 10 50 Practical Negotiation Tactics . Examples: • an item sold by one party and bought by the other • wage increases won by one side. the other side loses. What one side gains. rearranged. Depending on the situation and the parties involved.

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By assuming opposing roles. the seller’s agent called the buyer about the property. “Please make any offer—they are motivated!” The buyer responded. The buyer said he wasn’t interested. and the buyer was able to completely renovate the house and still have a great deal. The agent explained that the seller was desperate.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. half-serious. His teenage sons had “trashed” the house. 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. 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. If there is a significant weakness in your position. Weeks later. but the inside was a complete turnoff. with “All right. The buyer loved the location. The desperate owner agreed.” The agent took the offer to the seller. For example. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). 34 50 Practical Negotiation Tactics . I offer half the asking price.

but not so high as to end the negotiations before they begin. with no success.000. Buyer: We really like the house. but we simply can’t take less than $160. First. and then look at the demand from your opponent’s perspective. but quite frankly. so think this through well ahead of time. After all. and just refuses to reduce it. The market hasn’t gone up that much in six years. Carol: Maybe not. it is likely that your opponent will.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. one buyer shows some interest. Carol: We really want to sell. Surely there’s some flexibility in your asking price. And I don’t see a lot of difference in the neighborhood. we think $160.000. Carol wants $160.000. Buyer: The air conditioning might have increased the value of the house. your request must not be so low that the other party concludes that you are not negotiating in good faith.000 is very high. Finally. If you consider the demand ridiculous. However. so do not underestimate what you might be able to achieve. Your demand should be high enough to give you room to compromise. but certainly not exceptional in any way. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. six years ago you bought it for $60. It’s a good neighborhood. but the redecorating is of little value. Anyone buying the house would want to change wall colors or add new carpets. but the house has increased in value. Be realistic. She has had it on and off the market for the last five years. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Planning a Strategy 35 . You are not likely to get more than you request. as well. We also think that the neighborhood has improved over the last few years. Each time.

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

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

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

Half what it cost us new. we won’t need it at the new condo. Example 1 So. Peggy: I’m hearing one thing from Paula and another from Andy. I can use them. etc. Andy and Paula: Yes.200.400 if the catcher and can are included. Peggy: So. and I know how you take care of things. threatening.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. only three years ago. Andy: No. I don’t know what the deal is now. And take the leaf-catcher attachment and the gas can. so I’ll take it. not for $1. I want to keep those. what’s your price? Andy: $1. I heard that you want to sell your riding mower. I’ll go home and you can call me if you two can reach an agreement.200! We should get $1. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. Andy: I want them… Paula: Go ahead and take them. you’re really moving! I hate to see you leave. Peggy. They cost about $300. angry. Peggy: That’s fair. Peggy: Planning a Strategy 39 . Paula: Go ahead and ride it home. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Andy and Paula. Peggy: I assumed they went with the mower. (bad guy) and implies that his or her side will hold firm on their demands. since they are sitting out in the driveway with it. Andy: No. while another acts difficult.

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

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

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

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

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

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

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

Susan. Both sisters covet it. with winner taking all. I’m willing to pay or let it go for $800. the executor of the estate. A fourth option. and split the proceeds. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. 2) They can flip a coin. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). Mike. However. 3) They can agree to sell the object to a third party. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. I’ll give you 48 hours to decide the price. you’re the oldest. Mike: Mary Anne. called the “Reciprocal Buy-Sell Offer. Then Susan. since this one is in perfect shape and it was Mother’s. Planning a Strategy 47 .Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it.” is the recommendation of Howard Raiffa. so you set a price at which you agree to buy or sell the coffee grinder. 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. (two days later) Mary Anne: Well. The first party decides on a price for which he or she will either buy or sell the object to the second party. All the rest of the estate has been divided among the family. a well-known negotiations professor from Harvard University. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. The second party then decides to either buy it at that price and pay the first party. with the highest bidder paying the amount to the other side in compensation for their loss.

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

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

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

and should therefore handle the problem. you gain an edge when negotiating a new plan for your company. Preferred Provider Organizations (PPOs). He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert.investment decision or deal with an error in a bill. he argues that she is the expert. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . and 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.” If you spend many hours learning about Health Maintenance Organizations (HMOs).

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

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

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

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

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

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

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

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

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

“Distributive” bargaining (“win-lose” or “zero sum”) is used.500) Resistance Point ($25. (2004).000) Settlement Range ($22.000 Buyer Initial Offer ($21.750–$25. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). None is as important as the first one. for example.500) Fig. Another common strategy is to start with the status quo.750) Target Point ($24. This is a practical starting point that will not anger the other side (and might even be expected). 2: Distributive Bargaining Process. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. Exchanging Initial Offers 61 .000) Target Point ($23.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. quick agreement.000 22 23 24 25 26 27 Initial Offer $28. such as proposing to continue at the current rate or price. The negotiator firmly states that it is their best offer in an attempt to gain a nice. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. 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. 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.500) M $21. Adapted from Labor Relations and Collective Bargaining. by Michael R. 190–192. Carrell and Christina Heavrin. as illustrated in the following figure: Seller Resistance Point ($22.

62 50 Practical Negotiation Tactics .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.000 and $28. 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. if the buyer’s initial offer was $25. A target point is the desired settlement value a party has set as a goal when negotiations begin. yet is positioned well above or below what the party believes to be the opponent’s resistance point (thus avoiding the so-called winner’s curse). the process quickly narrows to the range between the initial offers. and is the range in which most negotiations actually occur. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. 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. thus starting out on a positive note. the other side does not agree to this value). Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. thus producing a true “win-win” negotiation. See Tactic #18: Agree on Something As Soon As You Can. each initial offer ($21. it is termed the settlement point – not the “right price” or “fair price. When the two parties agree to a price within the range. usually.” but the settlement price. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. The settlement range is the distance between the resistance points. The most common method of negotiating more than one issue or item is to combine two or more in a deal that gives each side something (Tactic #17: Package Items).000) is reasonable. In the example. these points have set the outer limits.In this example. After initial offers are exchanged.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Lyle Foxworthy. Give us your lowest price.500—half the difference! Sue: Great. The buyers were very motivated to sell. That’s an insult! Jay: Well. I can’t tell our realtor $290. they had offered $325. the company president. realizing they offered too much. as requested by the human resource director. If. (Bob and Frank meet privately to discuss the situation. 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. then let them make a counteroffer. and the offer was based on fact: the prior negotiated price. They outlined how they would develop a new employee performance-appraisal system. was very impressed with their presentation. Both parties felt that they made a good deal.000 total. (the next day …) Jay: They made us a counteroffer of $307.000. but who knows what they are planning on offering. as Sue had first suggested. since they had already bought another house.Sue: Don’t be crazy. Exchanging Initial Offers 87 .) Bob: I’d do it for $3. Sue: Then you do it. Frank: Me too. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No.000.000 for each of us—$6. the sellers obviously would have accepted and Jay and Sue.

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

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

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

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

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

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

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

which I’d like to keep in the bank.500 left. I’ll trade your sidewalk and trees for my whirlpool bath. Maureen: No. These are all permanent immediate needs.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.000 $500 $1. that makes sense.500 $5. I’d like to spend some of it on lighting upgrades.200 $200–$2.500 $500 $1. Making Counteroffers (The “Give and Take”) 95 .# 1 Sod Item Cost $1. $750 for lighting and $750 in the bank.000 $1. Can we split it evenly? Brooks: Okay. We have $1. which takes another $3.000! Brooks: Good. and we both get things we want.000 $5.000 $3.000 $2.500 $2.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I just can’t imagine the monthly payment on a $45.” “affordable weekly payments. and compare it to your strategic objective.500! Saleswoman: Yes.” and “low monthly rates” are examples of the salami tactic. Example 1 Car buyer: What. $45.000 for a Volvo? I bought the one I’m driving for $19.… (20 minutes later) Saleswoman: So. I recall the day you drove it out of here. be sure to add up the total cost. If you are on the receiving end of such a tactic. Buyer: Yes. do you want to look at something else? Buyer: No. Buyer: Way too much! Saleswoman: Well. if I can give you this car with a $300 monthly payment. but that was several years ago. what monthly payment did you have in mind? Buyer: More like $300 per month. I guess it would be around $600 per month. it’s a deal? 126 50 Practical Negotiation Tactics .Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami.” 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. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So.000 car. Phrases such as “for only pennies a day. I love this car. Saleswoman: I’ll be right back. Saleswoman: With your 740 in trade.

000 price into “slices” the buyer thought reasonable. I can’t discuss another client’s account. Great! So. Let’s see. Sure. Instead of a three-year lease. Making Counteroffers (The “Give and Take”) 127 . as promised.00 per month for your service. it will be a five-year lease.00 per month. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.99 per month.” she had him—she worked around the $300 slices.” She decided to cut the $45. and added the trade-in.00 per month. I can’t afford that much. do you want Disney? Yes. You can do that. down payment. with your car and $6. But my neighbor pays $39. but let me see the numbers. (looks at the numbers) That looks good. Once the buyer volunteered that $300 was an affordable “slice. can’t you? Buyer: Yes.Buyer: I don’t see how you can do that. Saleswoman: Simple.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. you can get the Disney channel for only $5.000 down. do you want HBO? How much? $5. but what else must I buy? Only the basic service for $8. and payout slices to reach the total price she wanted. I can afford $6.

128 50 Practical Negotiation Tactics . Conclusion The owner thought his neighbor’s service at $39. That’s $5. Any other kids’ channels? Yes.00 a month. The total is $38. 2? How much? $8. they asked about the Cartoon Network. Yeah.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Thanks. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00.00 per month was far too much.99 per month. Okay. and SI 1. Disney is for the kids! The sports channels are for me. and my wife wants the old movies. I really want the sports channels. but he agreed to six “salami slices” for a total of $38. 3. 2. we had that before. That’s another $5.00! Why? Because he judged the per-slice price to be reasonable. But that’s all! Then we’ll hook you up on Monday. What about the music package? Yes. Great. instead of one total amount.00 per month.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and both men were happy with the arrangement. Archie chose the parcel with the three lakefront lots. 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.

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

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

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

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

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

$235. I’ll get back to you. We love your house. Sometimes. This offer is for more money than any four-bedroom houses on this neighborhood list.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000. The owner. has owned the house for 24 years and is downsizing to a condo. They sold for: $225. 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. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. What? That’s $35. They believe it is overpriced. (Next day) We’ve reviewed the records you’ve produced.500. Here’s a list of the five that are about the same size as yours. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.000. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. and $237.000 under the listing price! We realize that.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. and we are countering with an offer of $250. $237. but the key is to gather facts that you might need—not just the facts that you will need. but we feel that it’s a fair offer.000. the other party will ignore or refuse to believe the information. Sam Jones. $229.000.000. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.

Here it is.000. and wisely chose exactly when to present them in order to make his point.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. The last 20 were over $2.000 each. and did his homework. Conclusion The Joneses had based their asking price on the advice of a friend. You can’t pay more than $1. I asked for a list of all new PCs bought this year. I’ll get called on the carpet. Making Progress 173 . Supervisor: If I okay this purchase order. Example 2 Supervisor: You know the policy. I’ll be… Okay. Hatfield: While I was at purchasing. Conclusion Hatfield had anticipated what his supervisor’s position would be. Well… We have a written counter of $245. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price.600 for a computer. Supervisor: Well. let’s not worry about it. who was not particularly knoledgeable about real estate.400 each. and we know that only this model will meet our needs. We’ve talked with purchasing and we have the authority to buy seven for $2.600 unless the company president approves. if other departments have ignored the policy. He found facts that supported his position. We accept. No one can go over $1. Order the new computers. That’s the bottom price. Hatfield: My staff has done a lot of research.

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

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

Once he discovered that employees in lower pay grades had access clearance. I’ll sign now. Jack: Here.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance.Mark: Well.P. that’s been the policy since I’ve been here. Jack was able to receive clearance as well. When can I get the data? Mark: Today. 176 50 Practical Negotiation Tactics . 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.” 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. I’ll get it for you ASAP. His probing questions turned up a critical fact.

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

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

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

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

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

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

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

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

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

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

Bill pulled the seller aside. They were not the only couple to come to the open house. however. If we shake hands on it right now. they looked at this particular house on their own. At the very least. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. Obviously. During a discussion. and while Bill and Paulette had been using an agent to help locate houses.000. The owners were selling the house without a real estate agent. and felt that they would have to work fast to make an offer before someone else did. Bill and Paulette fell in love with the house. and decided to stop by to see if they liked the house. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. we won’t be involving our real estate agent.000. We’d like to make you an offer of $150. They finally looked at a house they really liked.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. and one of the other couples looked very interested. all the usual stuff in a sale. Example 1 Bill and Paulette had been house-hunting for some time. not the furniture. Bill: Reaching Agreement 187 . They saw the “For Sale” and “Open House” signs. 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. Seller: Yes. everyone is busy grappling with the details of the negotiations. 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. Seller: We’re asking $152.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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