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

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

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

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

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

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

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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. they control the breaks and environmental factors. and so on. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. (thirty minutes later) Bailey: So. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. I like the frog. Bailey: Cybil: Preparation 21 .Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site. Mother: Hush. girls. 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. too. the frog is everybody’s favorite. Make up your minds. they have the information they need at their fingertips.) Let’s take all our Beanie Babies to my house to trade! Okay. Cybil. (Think of the showroom tactics used by car dealers. and go play somewhere! Cybil: Well … Okay. such as a hotel conference room.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. it’s a deal.

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

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

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

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

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

Now we have a package deal to propose … Preparation 27 . The trading of items (where initial demands are discussed and agreed upon) begins. was avoided. And if you clean the whole house on Saturday. you get to stay out an hour later that night. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Management agrees. The union’s chief negotiator. opens by proposing the list of items. 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. item #11 (the clothing allowance). while the mother won a Saturday house-cleaning and a night out each week. since all of their items were included as requested. but unlike your sisters. An allowance increase. I’ll pay you $10 to babysit every Wednesday night. Shari got the $10 she wanted and a later curfew. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. if you agree to our proposals on item #3 (the paid vacation schedule). Then a “win-win” solution could be determined. and item #23 (the wellness program voucher). which the other children would have requested as well. while your Dad and I go out. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items.

Then negotiations can resume on the remaining 43 items. 28 50 Practical Negotiation Tactics . 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. other trade-offs are proposed and agreed to until only a few items remain.

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

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

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

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

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

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

Inquiries to other law firms were not very helpful because in almost all of the instances. and then $10.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. Carol drove off a potential buyer by setting an asking price that was just too high.000 immediately.000. In any event. as to how you think the name is going to benefit you.Buyer: What if we offered you $100. Example 2 The law firm of Bits & Bites was a Sioux City institution. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. though. we are certainly interested in your request to “buy” our firm name to use in your city. or she has unreal expectations. the buyer took it as a signal that either Carol didn’t want to sell. but they have no idea what the value of their firm’s name might be in this nearby city. 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. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.000 offer by coming down in price at least a little. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name.000? Carol: We really can’t take less than $160. enjoying a statewide reputation for quality representation. were still alive. Here’s how the initial negotiations went: Partners: Well. the founders of the firm. 36 50 Practical Negotiation Tactics . The other law firm was prepared to pay $100. When Carol refused to budge. Neither Edward Bits nor Edmund Bites. The partners are interested in selling the name. We’re curious.

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

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

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

and your training programs. 40 50 Practical Negotiation Tactics . Liz: But we still want to renew your contract. perhaps even unintentionally. Miguel: Well. your account has taken too much time. causing our reps to spend hours on the road. And we want to change the 24-hour service response time to 48 hours. firm offer if they decided to continue negotiations. Sandy. we’re here to negotiate a new service agreement. And cut the training hours from 55 to 20.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). the quality of the technicians’ work. Let’s talk. we’ve been fairly happy with your responsiveness. We estimated that it has cost us more than $50. Sandy.000 in service calls last year alone because your damn people don’t take care of the equipment.000 per month is one of the highest in town. And we need to add a clause that holds your company responsible for machine damages. You are located outside our primary service area. Sandy: What? First of all. She very wisely recognized the routine and forced Andy and Paula to give her a clear. your rate of $3. Miguel: I’ve figured $4.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. She realized that it put her in an impossible negotiating position. Miguel: But not at this ridiculous rate. For the past three years.

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

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

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

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

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

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

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

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

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

so when the husband wants them to make an 50 50 Practical Negotiation Tactics . and forcing him or her to control the discussion of the issue.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.” and then argue for the frugal alternative.” 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. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. Based on seating capacity. The husband found the dimensions of the couches in the brochures and Web sites. Conclusion The husband became the “expert” in this situation by doing the homework. 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. and created a spreadsheet to compare the five best-rated couches on their list. she glanced at it and immediately deferred to his opinion. Looking at these statistics. He thus ended up having greater negotiating power. When it came to comfort. 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. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. he decided upon a strategy: First establish himself as the “dimension expert. This approach can also be reversed: The wife in this situation is a banker. This strategy worked. It can also work in reverse: establishing the other person as the expert. the one that was the most expensive was superior. When he showed his wife the detailed spreadsheet. the one he wanted (one of the least-expensive) was superior.

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

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

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

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

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

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

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

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

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

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

Adapted from Labor Relations and Collective Bargaining.500) Fig. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. for example. None is as important as the first one. 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.750) Target Point ($24. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). such as proposing to continue at the current rate or price.000) Target Point ($23. as illustrated in the following figure: Seller Resistance Point ($22. The negotiator firmly states that it is their best offer in an attempt to gain a nice. by Michael R. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party.000 22 23 24 25 26 27 Initial Offer $28. Exchanging Initial Offers 61 . 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.000) Settlement Range ($22.500) M $21.750–$25.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. Carrell and Christina Heavrin. Another common strategy is to start with the status quo. (2004). This is a practical starting point that will not anger the other side (and might even be expected). 2: Distributive Bargaining Process. quick agreement. 190–192.500) Resistance Point ($25. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.000 Buyer Initial Offer ($21. “Distributive” bargaining (“win-lose” or “zero sum”) is used.

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

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

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

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

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

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

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

and seniority will be used to determine who gets to choose the first day. 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.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Then we have a deal. 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 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). 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 . Conclusion Mr. All three employees must agree to the schedule.. At the very end of the negotiations. Example 2 The office supervisor told the three internal sales representatives (Jenny.no it’s not. The three are sitting at a lunch table to discuss the schedule. The days in question are: Exchanging Initial Offers 69 .. Hobbs successfully chose color as a throwaway item. Miguel. Employees will be paid time-and-a half for each of these days..

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

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

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

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

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

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

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

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

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

consider using the “First and Best” tactic. and even more hours in the fall picking up leaves. 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. I don’t want to quibble. but if you’re interested. I don’t have any idea.000 for it six years ago. no hard feelings either way. we paid $5. Ann: That sounds great! I don’t want this to affect our friendship. and it came with the bush hog and the leaf pick-up.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. we’ll sell it to you. What do you want for it? Colleen: Well. Exchanging Initial Offers 79 . Example 1 Colleen: Ann. Okay? No quibbling. Ann: Thanks! We really need one. The “first and best” tactic enabled them to settle the matter easily. Can you check others in the paper and just give us your best price? We will either take it or advertise the tractor in the paper. You must mean what you say and be prepared to walk away from an unacceptable offer. Ann: Well. 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. period. we plan on selling our Ford tractor when we move. Why don’t you give me a price? Colleen: Oh. I know you and Jeff said you’d like one because you have about five acres. We plan to put an ad in the paper next week. Jeff spends many hours mowing the yard every week. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship.

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

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

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

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

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

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

and that two similar ones on the same street sold for $330. The sellers must be willing to come down a few thousand … Sue: Well. We don’t know how anxious they are to sell or if they know the market. offer $150.000 and $337. such as last year’s price. never give them their asking price. of course. and you cannot withdraw it in good faith. is the most (or least) the other side will accept.” (You have won a settlement. That’s a fair price.” The perfect first offer. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure.000 three years ago). 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. or 3) Make an unrealistic offer (i. The other party will probably come back with an equally ridiculous offer. think things through before you make or accept the first offer.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. Their realtor told them that it sold for $290.000.. Jay: No. because you have settled quickly. Avoid giving away too much at the outset. Let’s low-ball them and offer $290.000. 86 50 Practical Negotiation Tactics .e. and houses in this area sell fast.) To prevent this from happening. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.000. which can be very useful).000 two years ago. They found one they both like that lists for $325. Jay: No. before someone else does. but you feel cursed because you gave away too much.000—what they paid for it. thus requiring greater concessions on both sides.000 for a house that sold for $185. particularly if you don’t know the other party’s “settlement range. 2) Start out with an old number. at minimum cost. Sue: Let’s offer $325.000 this year. then $320.

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

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

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

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

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

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

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

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

Making Counteroffers (The “Give and Take”) 95 .500 $5.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.000 $2. $750 for lighting and $750 in the bank.500 left.200 $200–$2. I’d like to spend some of it on lighting upgrades.500 $500 $1.000 $3.000 $500 $1.# 1 Sod Item Cost $1. We have $1. which takes another $3. I’ll trade your sidewalk and trees for my whirlpool bath. These are all permanent immediate needs. that makes sense. and we both get things we want.000 $1.500 $2.000! Brooks: Good. Can we split it evenly? Brooks: Okay. which I’d like to keep in the bank. Maureen: No.000 $5.

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

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

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

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

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

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

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

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

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

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

We’re not familiar with that program. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. and really taxes our ability to raise funds.Kids’ Home: Borrowing the money gets very expensive. 106 50 Practical Negotiation Tactics . We’ve never committed our funds to pay back a bank loan. it could end up costing double that amount. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. We wouldn’t want to make such a commitment to a bank. I’ll contact the state tomorrow. 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. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. We’re a nonprofit group. If we borrowed $15 million at 10% interest. We probably would not be able to participate. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city.

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

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

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

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

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

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

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

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

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

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

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

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

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

000 (which we reasonably should have expected to pay in premiums) in the pension account now. If we invest the $200. The airline industry is in a slump. Pilots: Look. Over the last five years.000 a year over the next five years? Company: Yes. With long-term planning and investments. what they really need is for you to cover the costs of dependent coverage.000. as it has always been. But only a few of our people are close to retirement age.000. dependent coverage could cost us $1. And we cannot afford that $1. The projections for the next five years were that these costs would increase to about $1. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000.000.000 figure. with all wage and operations issues resolved fairly early. and we know that with this new contract term of five years. The pilots want dependent coverage paid for by the company.000. you are taking a risk on the costs increasing. The company wants to trade paying for dependent coverage for better pension benefits. Everyone was afraid that the dispute would cause an impasse and a possible strike. Company: This could not come at a worst time for us.000 to cover the premiums for dependent coverage. we know that health insurance premiums might skyrocket. that would be the minimum increase. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. This would be a better benefit in the long run. and the premiums for health care just keep going up.000.000. However.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. and are willing to keep pension benefits the same. Over the next five years. the airline paid a total of $200. 124 50 Practical Negotiation Tactics . then the pension benefits overall will increase by $10. This is just a cash-flow problem that your members have to understand. the company can make your pensions much better. As best as we can tell.

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

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

Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. it will be a five-year lease. can’t you? Buyer: Yes. with your car and $6. as promised. But my neighbor pays $39.00 per month. Making Counteroffers (The “Give and Take”) 127 . do you want Disney? Yes. Once the buyer volunteered that $300 was an affordable “slice.00 per month.” She decided to cut the $45.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. but let me see the numbers. down payment. (looks at the numbers) That looks good. I can’t afford that much. do you want HBO? How much? $5.99 per month. Saleswoman: Simple. I can’t discuss another client’s account.000 price into “slices” the buyer thought reasonable. and payout slices to reach the total price she wanted. Great! So. You can do that.Buyer: I don’t see how you can do that. Let’s see.00 per month for your service.000 down.” she had him—she worked around the $300 slices. Sure. I can afford $6. but what else must I buy? Only the basic service for $8. and added the trade-in. Instead of a three-year lease. you can get the Disney channel for only $5.

99 per month. That’s another $5. 3. 2. The total is $38. Any other kids’ channels? Yes. 128 50 Practical Negotiation Tactics .00! Why? Because he judged the per-slice price to be reasonable. But that’s all! Then we’ll hook you up on Monday. we had that before. but he agreed to six “salami slices” for a total of $38. Yeah. and probably felt much better about the total negotiated package because it was presented in modest individual slices. Great.00 per month. Disney is for the kids! The sports channels are for me. instead of one total amount. Conclusion The owner thought his neighbor’s service at $39. and my wife wants the old movies. 2? How much? $8. they asked about the Cartoon Network. I really want the sports channels. What about the music package? Yes.00 a month. and SI 1.00. Okay. That’s $5.00 per month was far too much. Thanks.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

Applying Pressure

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

000. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. 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. and we are countering with an offer of $250. but you’ve priced it way too high. The owner. (Next day) We’ve reviewed the records you’ve produced. $229. $235. Sometimes. We love your house.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.500. Here’s a list of the five that are about the same size as yours.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. but we feel that it’s a fair offer.000. and $237.000. I’ll get back to you. the other party will ignore or refuse to believe the information. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. This offer is for more money than any four-bedroom houses on this neighborhood list. has owned the house for 24 years and is downsizing to a condo. but the key is to gather facts that you might need—not just the facts that you will need. Sam Jones. They sold for: $225.000 under the listing price! We realize that. What? That’s $35.000.000. They believe it is overpriced. $237. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.

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

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

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

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

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

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

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

However. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. 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.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. knowing that it will probably be agreed to in order to continue in the euphoria of the moment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jefferson County. 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 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. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. a 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. an agreement between the State of Kentucky. 202 50 Practical Negotiation Tactics .

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