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



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


50 Practical Negotiation Tactics

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



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

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

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

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

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

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

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




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


50 Practical Negotiation Tactics

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

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.



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

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

I don’t think I can go higher than $18. but thought this might explain John’s sudden interest in selling the rifle. I’ve been thinking about your offer. Well. if you could come up a little—say $18.000. but I could get the money to you right away. Rick needs to remain president of the company for the next two years.) Tom: John. John: Well. we 18 50 Practical Negotiation Tactics . One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. Tom now felt comfortable negotiating the price. The sale price for the company has not yet been agreed to. Conclusion Tom entered into the negotiations suspicious of John’s motives. the owner of a small manufacturing company. When Tom found out why John decided to sell his rifle. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. it made the negotiations easier. Tom: Okay. let me think about it and I’ll get back to you. He is two years away from retiring and does not want his business to fail before he does. and we’re committed to keeping it open as a major division of our company. has begun negotiations to sell his firm to BigManu Company. However. BigManu: Rick. Example 2 Rick. fearing that this will put all of his employees out of work. let’s do it. Was Tom interested? Tom declined.500—we’d have a deal.Tom: Okay. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. but then he will be happy to retire. No longer worried about John’s motives. Without some trust. parties to a negotiation are not likely to reach agreement. and now the two-year requirement has become a stumbling block in the negotiations. we really want to buy your company.500 had an 1861 for sale. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors.

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

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

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

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

If they tell us that they either Preparation 23 . though. Let’s get the guys back in who gave you estimates. when Will presented Larry with his bill. Will is a licensed plumber. When we got into it. I would have charged anyone else much more. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. Larry had expected to pay him for his time. I was kind of surprised at how high it was. Larry: Well. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. Larry was thrilled. I anticipated much less work. and he and Larry have always gotten along. It was twice as high as the estimates Larry received from other plumbers before they started the project. I did get some estimates from plumbers. This uncomfortable negotiation followed: Larry: Will. If you think that the other party knows more than you do. about your bill. When you first told me about your project.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. based on objective criteria (think property appraisals in real estate). and show them the actual work that got done. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. Will: Larry. but was shocked at the amount of the bill.” This can hold up an agreement and cost you in the end. Larry: But Will. Believe me. it became clear that all of those pipes had to be pulled and new ones put in. I gave you my “family” rate. After all. Things turned sour. you are likely to resent them for it and hold out. and they were much lower than this. Larry: Just make sure you’re comparing apples to apples. rather than give them the “advantage.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

And cut the training hours from 55 to 20.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. We estimated that it has cost us more than $50. Sandy. Miguel: Well. And we need to add a clause that holds your company responsible for machine damages. firm offer if they decided to continue negotiations. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm).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 want to change the 24-hour service response time to 48 hours. For the past three years. the quality of the technicians’ work. causing our reps to spend hours on the road. Sandy. perhaps even unintentionally. we’ve been fairly happy with your responsiveness. She very wisely recognized the routine and forced Andy and Paula to give her a clear.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. and your training programs. Let’s talk. Liz: But we still want to renew your contract. Miguel: But not at this ridiculous rate. your rate of $3. 40 50 Practical Negotiation Tactics . your account has taken too much time. You are located outside our primary service area. She realized that it put her in an impossible negotiating position. Sandy: What? First of all. we’re here to negotiate a new service agreement. Miguel: I’ve figured $4.

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

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

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

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

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

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

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

and then decide how much more “emotional value” it held. Lectures on Negotiation Analysis. Here is my check for $800. Two business partners had been working together for ten years to build a successful business. in writing. to submit a sealed offer to buy/sell the business sixty days from today. I suggest a slight modification to the process. 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.Susan: Mike: Well. Thanks for making this last step as easy as possible. (sixty days later) 48 50 Practical Negotiation Tactics . Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. which will bind us to the outcome. After I open the bids. You will both agree. They accepted his suggestion to use the “reciprocal buy-sell strategy. Both came to Raiffa to help negotiate a settlement. Both sisters felt that the process enabled them to resolve the issue fairly.” 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). Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. I’ll pick it up tonight. I choose to buy it. They thus were able to determine the highest price each was willing to pay for it or receive for it.

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

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

he argues that she is the expert.” If you spend many hours learning about Health Maintenance Organizations (HMOs). and Point of Service (POS) plans. Preferred Provider Organizations (PPOs). you gain an edge when negotiating a new plan for your company.investment decision or deal with an error in a bill. 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 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. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 .

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

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

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

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

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

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

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

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

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

The negotiator firmly states that it is their best offer in an attempt to gain a nice. Carrell and Christina Heavrin. 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.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. quick agreement.750) Target Point ($24. “Distributive” bargaining (“win-lose” or “zero sum”) is used.000) Target Point ($23.500) Fig.500) M $21. 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. None is as important as the first one. as illustrated in the following figure: Seller Resistance Point ($22.500) Resistance Point ($25. Adapted from Labor Relations and Collective Bargaining. for example.000) Settlement Range ($22. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. (2004).750–$25. such as proposing to continue at the current rate or price. by Michael R.000 Buyer Initial Offer ($21. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). 2: Distributive Bargaining Process. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. 190–192. Another common strategy is to start with the status quo. 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. Exchanging Initial Offers 61 .000 22 23 24 25 26 27 Initial Offer $28. This is a practical starting point that will not anger the other side (and might even be expected).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. because you have settled quickly. such as last year’s price.000. think things through before you make or accept the first offer. never give them their asking price. of course. thus requiring greater concessions on both sides. Sue: Let’s offer $325.) To prevent this from happening. The sellers must be willing to come down a few thousand … Sue: Well.e. Let’s low-ball them and offer $290.. That’s a fair price. 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. 86 50 Practical Negotiation Tactics . and houses in this area sell fast.000 this year. then $320. Their realtor told them that it sold for $290.000. which can be very useful). and that two similar ones on the same street sold for $330.” (You have won a settlement. but you feel cursed because you gave away too much. We don’t know how anxious they are to sell or if they know the market.000—what they paid for it. Jay: No. particularly if you don’t know the other party’s “settlement range.000 two years ago. 2) Start out with an old number. before someone else does. and you cannot withdraw it in good faith.000 three years ago). is the most (or least) the other side will accept.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. or 3) Make an unrealistic offer (i. The other party will probably come back with an equally ridiculous offer. Avoid giving away too much at the outset. Jay: No.” The perfect first offer. They found one they both like that lists for $325.000 for a house that sold for $185. offer $150. at minimum cost.000. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.000 and $337.

000 for each of us—$6. Give us your lowest price. (Bob and Frank meet privately to discuss the situation. they had offered $325. the sellers obviously would have accepted and Jay and Sue. the company president. Both parties felt that they made a good deal. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. then let them make a counteroffer. Frank: Me too.000.000.Sue: Don’t be crazy.000 total. (the next day …) Jay: They made us a counteroffer of $307. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. was very impressed with their presentation. realizing they offered too much. Exchanging Initial Offers 87 . as requested by the human resource director. If.500—half the difference! Sue: Great. as Sue had first suggested. Sue: Then you do it. 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. and the offer was based on fact: the prior negotiated price. since they had already bought another house. but who knows what they are planning on offering. Lyle Foxworthy.) Bob: I’d do it for $3. The buyers were very motivated to sell. I can’t tell our realtor $290. That’s an insult! Jay: Well. They outlined how they would develop a new employee performance-appraisal system.

but we know you must have an amount budgeted for this and we are willing to do it for that amount.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. We’ve waited long enough. I’m out of time.000. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. but we can’t pay more than $18. and it would not apply. Bob: That’s fair.) Lyle: Okay. 88 50 Practical Negotiation Tactics . Lyle: Okay.000.000) their minimum price of $6. 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. That is all that’s left in this year’s training budget. We’ll do the job. What’s the cost? Bob: We want the job. They also ended up getting three times ($18. and you two come highly recommended.

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

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

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

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

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

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

000 $5. which takes another $3. Can we split it evenly? Brooks: Okay.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.500 $5.000 $3.200 $200–$2. Maureen: No.500 left.000! Brooks: Good.000 $2. $750 for lighting and $750 in the bank. These are all permanent immediate needs.000 $1. I’ll trade your sidewalk and trees for my whirlpool bath.500 $500 $1. and we both get things we want. that makes sense.500 $2.# 1 Sod Item Cost $1.000 $500 $1. Making Counteroffers (The “Give and Take”) 95 . We have $1. which I’d like to keep in the bank. I’d like to spend some of it on lighting upgrades.

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

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

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

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

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

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

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

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

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

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

We’ve never committed our funds to pay back a bank loan. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. and really taxes our ability to raise funds. 106 50 Practical Negotiation Tactics . If we borrowed $15 million at 10% interest. We probably would not be able to participate. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. We’re a nonprofit group. 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.Kids’ Home: Borrowing the money gets very expensive. I’ll contact the state tomorrow. it could end up costing double that amount. 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. We’re not familiar with that program. 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. We wouldn’t want to make such a commitment to a bank.

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

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

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

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

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

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


50 Practical Negotiation Tactics

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

Making Counteroffers (The “Give and Take”)


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


50 Practical Negotiation Tactics

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

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

Making Counteroffers (The “Give and Take”)


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

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

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

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

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

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

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

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

Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.000 to cover the premiums for dependent coverage. then the pension benefits overall will increase by $10.000. If we invest the $200. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. Pilots: Look. Everyone was afraid that the dispute would cause an impasse and a possible strike. The airline industry is in a slump. you are taking a risk on the costs increasing.000. that would be the minimum increase.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. 124 50 Practical Negotiation Tactics . what they really need is for you to cover the costs of dependent coverage. This is just a cash-flow problem that your members have to understand. Over the next five years. Company: This could not come at a worst time for us. the company can make your pensions much better. As best as we can tell. With long-term planning and investments.000.000. dependent coverage could cost us $1.000 (which we reasonably should have expected to pay in premiums) in the pension account now. However. But only a few of our people are close to retirement age. and are willing to keep pension benefits the same. The pilots want dependent coverage paid for by the company. and the premiums for health care just keep going up. The projections for the next five years were that these costs would increase to about $1. And we cannot afford that $1. we know that health insurance premiums might skyrocket. The company wants to trade paying for dependent coverage for better pension benefits. Over the last five years. and we know that with this new contract term of five years. as it has always been.000.000.000 a year over the next five years? Company: Yes. with all wage and operations issues resolved fairly early.000 figure. the airline paid a total of $200. This would be a better benefit in the long run.000.

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

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

I can’t afford that much.000 down. as promised. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. Let’s see.” She decided to cut the $45.” she had him—she worked around the $300 slices. I can afford $6. but what else must I buy? Only the basic service for $8. you can get the Disney channel for only $5. do you want HBO? How much? $5. do you want Disney? Yes.000 price into “slices” the buyer thought reasonable.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock.00 per month. Great! So. Making Counteroffers (The “Give and Take”) 127 . with your car and $6.99 per month. Sure. it will be a five-year lease.Buyer: I don’t see how you can do that. But my neighbor pays $39. down payment. Saleswoman: Simple.00 per month. but let me see the numbers. and payout slices to reach the total price she wanted. Once the buyer volunteered that $300 was an affordable “slice. I can’t discuss another client’s account. You can do that.00 per month for your service. Instead of a three-year lease. can’t you? Buyer: Yes. (looks at the numbers) That looks good. and added the trade-in.

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

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

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

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

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

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

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

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

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

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

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

Applying Pressure


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


50 Practical Negotiation Tactics

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

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

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

Applying Pressure


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

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


50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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


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

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

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.


50 Practical Negotiation Tactics

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

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

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.


Making Progress


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

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

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

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

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

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

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

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

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

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

Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. The second person then chooses which of the two parts they will receive. of course. Their dad instructed them to share the candy bar. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . 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. the classic “split and choose” tactic might be the best way to settle the issue. take this knife and slice the Snickers into two halves. with the remaining part going to the person who did the dividing. Maria. is usually careful about dividing the object into two equal parts. Roberto will get to choose which half he wants. because you did the cutting. which certainly is large enough (he naively thought) for two young children to easily share. Realizing the potential of getting the “smaller half. Maria and Roberto: No. Oh. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things.” the divider. Many of us learned this one from our parents: After two people agree to the strategy.

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

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

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

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

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

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

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

The owner. (Next day) We’ve reviewed the records you’ve produced. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.000. What? That’s $35.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. has owned the house for 24 years and is downsizing to a condo.000. $235. Sam Jones. but the right facts presented at the right time can chill or astound and completely turn things around. Here’s a list of the five that are about the same size as yours. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000. $237. Sometimes.000 under the listing price! We realize that.500. They sold for: $225. I’ll get back to you.000. and $237. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. the other party will ignore or refuse to believe the information.000. This offer is for more money than any four-bedroom houses on this neighborhood list. but we feel that it’s a fair offer. and we are countering with an offer of $250. but you’ve priced it way too high. We love your house.000. $229. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. They believe it is overpriced. but the key is to gather facts that you might need—not just the facts that you will need.

600 unless the company president approves. and did his homework. I’ll be… Okay.000. Here it is. Hatfield: My staff has done a lot of research. He found facts that supported his position. Well… We have a written counter of $245. Example 2 Supervisor: You know the policy. You can’t pay more than $1.600 for a computer. Conclusion The Joneses had based their asking price on the advice of a friend. Making Progress 173 . We accept. I’ll get called on the carpet. if other departments have ignored the policy. and we know that only this model will meet our needs.000 each. No one can go over $1. Order the new computers.400 each. Conclusion Hatfield had anticipated what his supervisor’s position would be. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. The last 20 were over $2. Supervisor: Well. We’ve talked with purchasing and we have the authority to buy seven for $2.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. who was not particularly knoledgeable about real estate. and wisely chose exactly when to present them in order to make his point. Supervisor: If I okay this purchase order. That’s the bottom price. I asked for a list of all new PCs bought this year. Hatfield: While I was at purchasing. let’s not worry about it.

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

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

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

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.Stage 7: Reaching Agreement he final stage! It might come minutes. 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). If friends or neighbors need to settle something but prefer to avoid the negotiation process. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. 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. They bring it out when a dispute arises. or even months after the first offer is presented. When two parties believe they have an oral agreement. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. hours. When multiple issues are at stake and most have been agreed upon during negotiations. and the classic Walk Away (Tactic #48). this tactic can produce an agreement. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. T Reaching Agreement 177 . and the child learns an important lesson about life. this process can easily result in a final settlement. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. days. In this process.

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

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

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

be sure you think this through beforehand. He stopped by Pembroke one day to look at the new models. the following exchange occurs. but I thought I might want to try a new Highlander. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. You bought your wife a new van just last year. too.) Jay: Sue. Jay: Hi. The next morning. My name is Jay Vahaly. Your opponent will have to either let you go and run the risk that things are really over. I like it. Whether you are really bluffing or you are serious. He really likes it. 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. and he can simply buy it when the lease expires. (Vahaly drives the new Highlander home. how did you like it? Jay: Okay. Sue: Well. You had time to assess my car. and the lease on my Avalon is about to expire. I don’t want to negotiate. if I roll over the lease to a Highlander. a veteran salesperson. but his Avalon has been a good car. Sue: I remember you. I’ve worked with you before. Jay. all from Sue Wilson. Sue: Let me get you the keys so you can take this one home overnight to see how you like it.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. right? Jay: Yes. but my Avalon is a good car. here are your keys. Jay.

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

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

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

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

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

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

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

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

but word did get out that a public agency paid $200. to his disadvantage. Monica accepted the $200.000. I’ll take your offer back to her and let you know.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. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.She: authorized to pay $200. It was made clear that the employer had paid the additional $100. 190 50 Practical Negotiation Tactics .000.000 just to get the employee to “withdraw” the complaint. There was a confidentiality agreement.000 and the conditions of the offer. 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.

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

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

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

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

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

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

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

he was elected to the City of Louisville Board of Aldermen for five terms. During his academic career he has received awards for both outstanding research and teaching. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator.D. Carrell is Dean of the College of Business at Northern Kentucky University. Personnel Journal. which is located in the greater Cincinnati area. and served as President of the Board and Mayor Pro-tem for three terms. HR Magazine. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Business Forum. and MBA and B. Books published by Dr. Carrell are in the fields of collective bargaining and labor relations. Morehead State University. Organizational Behavior and Human Performance. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. In addition to negotiating numerous litigation settlements and contracts. In addition. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . and negotiations. M Christina Heavrin J. The University of Nebraska-Omaha. The Personnel Administrator. He received his doctorate from the University of Kentucky.A. The Academy of Management Review. in Economics from the University of Louisville. Personnel. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. Labor Law Journal. Carrell has held academic positions at California State University. Bakersfield. The Journal of Accountancy Training.ABOUT THE AUTHORS ichael R. and the University of Louisville. Human Resource Management. Dr. and Public Personnel Management. Marshall University. organizational behavior.

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