SECTION I: INTRODUCTION

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

Introduction

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. 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 . Information.

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For example. If there is a significant weakness in your position. I offer half the asking price. two people on the team will be more successful because they evoke different emotions from the other side. and the buyer was able to completely renovate the house and still have a great deal. “Please make any offer—they are motivated!” The buyer responded. The agent explained that the seller was desperate. but the inside was a complete turnoff. 34 50 Practical Negotiation Tactics . let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). By assuming opposing roles. Weeks later.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement.” The agent took the offer to the seller. half-serious. The buyer loved the location. The buyer said he wasn’t interested. with “All right. 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). His teenage sons had “trashed” the house. The desperate owner agreed. the seller’s agent called the buyer about the property.

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

Example 2 The law firm of Bits & Bites was a Sioux City institution. and then $10. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.000 offer by coming down in price at least a little. though. Here’s how the initial negotiations went: Partners: Well. The other law firm was prepared to pay $100. In any event. the founders of the firm. as to how you think the name is going to benefit you.000 immediately. Inquiries to other law firms were not very helpful because in almost all of the instances. We’re curious. When Carol refused to budge. 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. enjoying a statewide reputation for quality representation.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. the buyer took it as a signal that either Carol didn’t want to sell.Buyer: What if we offered you $100. The partners are interested in selling the name. we are certainly interested in your request to “buy” our firm name to use in your city. were still alive. but they have no idea what the value of their firm’s name might be in this nearby city. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. 36 50 Practical Negotiation Tactics .000. Carol drove off a potential buyer by setting an asking price that was just too high. or she has unreal expectations.000? Carol: We really can’t take less than $160. 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. Neither Edward Bits nor Edmund Bites.

I’m kind of embarrassed now. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . So. And even though you don’t have an office in our city. it would be impossible to create a new name out of the names of our key partners. Well. (surprised) Well. we reserve the right to withdraw our permission. And we. I guess this is just not something we’ll be able to pursue. that you anticipate to build a very profitable law firm. We probably won’t be insulted. that is a very high number. starting with the ten partners you describe. Give us some range. Let’s just pretend this didn’t happen. To offer it now would be an insult. and then 10% of your profits each year for as long as you use the name. you have a very solid reputation there. Using the Bits & Bites name can only enhance our profitability. we do. We should assume. we want $500.000 initially. Thanks so much for meeting with me. because we were not even close to that number. one of these two attorneys carries the surname of the firm they are leaving. because you are in the state capital and your firm has handled a lot of high-profile political cases. of course. In every instance.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. (concerned about loosing the opportunity) Wait. then. that’s just our initial figure. expect to pay for that. but we get to keep all of the money we’ve received up to that point. Yes. I really don’t feel comfortable doing that now. We weren’t really thinking about that amount of money. What number were you thinking about? Well. If at any time we feel that you have “harmed” our name.

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

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

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

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

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

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

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

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

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

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

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

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

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

you gain an edge when negotiating a new plan for your company. and should therefore handle the problem. he argues that she is the expert. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . and Point of Service (POS) plans.investment decision or deal with an error in a bill. Preferred Provider Organizations (PPOs).” If you spend many hours learning about Health Maintenance Organizations (HMOs). He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are.

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

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

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

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

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

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

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

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

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

Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. for example.000) Settlement Range ($22. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.500) M $21. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party.750) Target Point ($24. Exchanging Initial Offers 61 . quick agreement. (2004). as illustrated in the following figure: Seller Resistance Point ($22.750–$25. Carrell and Christina Heavrin.500) Fig. by Michael R. None is as important as the first one. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. 190–192.000 Buyer Initial Offer ($21. such as proposing to continue at the current rate or price. 2: Distributive Bargaining Process.500) Resistance Point ($25.000 22 23 24 25 26 27 Initial Offer $28. 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. This is a practical starting point that will not anger the other side (and might even be expected). Adapted from Labor Relations and Collective Bargaining.000) Target Point ($23. “Distributive” bargaining (“win-lose” or “zero sum”) is used.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. The negotiator firmly states that it is their best offer in an attempt to gain a nice. Another common strategy is to start with the status quo.

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

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

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

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

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

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

Example 1 The buyer. Here’s how it works: Party A exchanges the item for something of true value. we’ve got expenses and we need to make some profit. 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.” Party B thinks that A has sacrificed one important objective to gain another. this conversation takes place: Hobbs: Yes. He doesn’t really care about the color of the new vehicle. not revealing that the item exchanged is a “throwaway. but he makes a mental note to use color as a “throwaway” item. It is a useful tactic in any negotiations. At a point late in the negotiations. when the two sides are only a few dollars apart. I can go to another dealer and get a green exterior—the color I like best. Salesman: Well. I know. Mr. I’ll go get him. quickly checked the dealer’s inventory of sport utility vehicles in stock. and noticed that none of the vehicles have a green exterior. it’s a great car and a fair deal. according to the Consumer Reports listing of the cost of the vehicle. but in reality. so be sure you present them in a way that suggests importance.” Throwaway items are those things that hold little or no value to you. Hobbs: Yes. you are making $200 profit over the true dealer’s cost. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . However. A has gained something of true value and given up nothing he values in return. But for this price. but … Salesman: But what? Hobbs: Well.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. according to my figures. Hobbs. Salesman: Let me talk to my manager. you don’t want your opponent to know what these things are.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

before someone else does. offer $150.000 this year.” (You have won a settlement. and houses in this area sell fast. at minimum cost. but you feel cursed because you gave away too much.000 three years ago).” The perfect first offer. Avoid giving away too much at the outset. We don’t know how anxious they are to sell or if they know the market. or 3) Make an unrealistic offer (i. never give them their asking price. Jay: No. because you have settled quickly. Their realtor told them that it sold for $290.000. That’s a fair price. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. of course.. The sellers must be willing to come down a few thousand … Sue: Well.000 two years ago. is the most (or least) the other side will accept. The worst first offer is the one that is so high or so low that the other party jumps on it immediately—known as the “Winner’s Curse. thus requiring greater concessions on both sides. think things through before you make or accept the first offer. 2) Start out with an old number.000—what they paid for it. then $320.000.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. Let’s low-ball them and offer $290.000. which can be very useful). Jay: No. Sue: Let’s offer $325. such as last year’s 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 . The other party will probably come back with an equally ridiculous offer.000 and $337.) To prevent this from happening. particularly if you don’t know the other party’s “settlement range. and that two similar ones on the same street sold for $330. They found one they both like that lists for $325.000 for a house that sold for $185.e. and you cannot withdraw it in good faith.

Lyle Foxworthy. then let them make a counteroffer. since they had already bought another house.000 total. The buyers were very motivated to sell. the sellers obviously would have accepted and Jay and Sue. the company president. 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. I can’t tell our realtor $290.) Bob: I’d do it for $3. realizing they offered too much.Sue: Don’t be crazy. (the next day …) Jay: They made us a counteroffer of $307. as Sue had first suggested. They outlined how they would develop a new employee performance-appraisal system. Sue: Then you do it. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. If. 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.000 for each of us—$6. they had offered $325. Both parties felt that they made a good deal. and the offer was based on fact: the prior negotiated price. (Bob and Frank meet privately to discuss the situation. Give us your lowest price. That’s an insult! Jay: Well. Frank: Me too.000. but who knows what they are planning on offering.500—half the difference! Sue: Great. Exchanging Initial Offers 87 . as requested by the human resource director.000.

We’ve waited long enough.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. and it would not apply. 88 50 Practical Negotiation Tactics . but we know you must have an amount budgeted for this and we are willing to do it for that amount. and you two come highly recommended. Lyle: Okay. That is all that’s left in this year’s training budget. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. What’s the cost? Bob: We want the job. but we can’t pay more than $18. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. Bob: That’s fair.) Lyle: Okay. They also ended up getting three times ($18. We’ll do the job.000. I’m out of time.000) their minimum price of $6.000.

Instead. One or more parts might be acceptable or indicate movement from their previous positions. Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. which is often the case. labor negotiators. do not dismiss it because it is not all you want. When the other party makes an offer. which would most likely weaken their position (see Tactic #26: Keeping Secrets). is likely to pull away from the table. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. In some negotiation situations. because if you do not at least appear to be flexible. Experienced negotiators seldom reveal their exact priorities and objectives. in fact. carefully evaluate an opponent’s offer. and attorneys use tried and true tactics in giving and receiving offers. seeing no common ground. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. the other party. and do not flatly reject it because it is not your offer. be enlarged (see Tactic #27: Expanding the Pie). but possibly of different values to your opponent. It has often been said that the key to negotiations is to be flexible (see Tactic #25). Expect that the “total pie” will be different from what it was at the outset. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). T Making Counteroffers (The “Give and Take”) 89 . This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). what appears to be an outer limit of the settlement range when the process starts can. Also. Skilled negotiators such as salespeople. 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.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take.

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

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

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

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

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

and we both get things we want.000 $2.500 left.500 $5.200 $200–$2.# 1 Sod Item Cost $1. These are all permanent immediate needs. $750 for lighting and $750 in the bank. I’ll trade your sidewalk and trees for my whirlpool bath.000 $1.000 $3. that makes sense.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. which takes another $3.000 $5.000! Brooks: Good. I’d like to spend some of it on lighting upgrades. Can we split it evenly? Brooks: Okay.500 $500 $1.500 $2. We have $1. which I’d like to keep in the bank.000 $500 $1. Maureen: No. Making Counteroffers (The “Give and Take”) 95 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Great. What about the music package? Yes. but he agreed to six “salami slices” for a total of $38. they asked about the Cartoon Network. and probably felt much better about the total negotiated package because it was presented in modest individual slices. I really want the sports channels. That’s another $5. Conclusion The owner thought his neighbor’s service at $39. we had that before. That’s $5.00! Why? Because he judged the per-slice price to be reasonable.00. Okay. 2? How much? $8.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. and SI 1.99 per month. But that’s all! Then we’ll hook you up on Monday. and my wife wants the old movies. 3. instead of one total amount. Thanks. 2. Yeah. Any other kids’ channels? Yes.00 a month. The total is $38. Disney is for the kids! The sports channels are for me.00 per month. 128 50 Practical Negotiation Tactics .00 per month was far too much.

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

In the last couple of years. boat prices have really gone up. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. And we don’t want to be unfair. The two couples used the sailboat a lot the first couple of years. 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). Lacey: Don. but it is not a good idea to exaggerate what you are offering or what you are giving up. in fact. I can’t tell you how many times Abby has said how happy she is that we have the sailboat.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Lacey and Chloe didn’t know that Don and Abby were. but Don. It 130 50 Practical Negotiation Tactics . Don and Abby now use it less and less. big news! I’ve been promoted. Don: Absolutely. and they will weaken your credibility. and we’ll be moving south in the next month or so. Chloe and I would like to take the sailboat with us. Such exaggerations are easily revealed or uncovered. Lacey: I know. and we need to talk to you about how we can buy you guys out. together and separately. Your opponent will consider you untrustworthy and might even be insulted by your attitude. I think Chloe and I would be willing to pay more than just the money you guys put into it. Lacey. 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. We’d hate to give it up. I don’t know. Abby really loves that boat. Although I do think there ought to be some consideration for the two years you had use of the boat. Don: Wow. When Lacey found out that his employer was transferring him to another city farther down the coast.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

000. This offer is for more money than any four-bedroom houses on this neighborhood list.500. and we are countering with an offer of $250. has owned the house for 24 years and is downsizing to a condo.000 under the listing price! We realize that. I’ll get back to you. but we feel that it’s a fair offer.000.000. They believe it is overpriced.000. $237.000. Here’s a list of the five that are about the same size as yours. $235. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. $229. Sometimes. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. but the key is to gather facts that you might need—not just the facts that you will need. (Next day) We’ve reviewed the records you’ve produced. They sold for: $225. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. The owner. the other party will ignore or refuse to believe the information. but the right facts presented at the right time can chill or astound and completely turn things around.000. but you’ve priced it way too high. Sam Jones.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. We love your house. and $237.000. What? That’s $35.

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

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

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

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

When two parties believe they have an oral agreement. They bring it out when a dispute arises. this tactic can produce an agreement. 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. T Reaching Agreement 177 . this process can easily result in a final settlement. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. 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. and the child learns an important lesson about life. or even months after the first offer is presented. 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.Stage 7: Reaching Agreement he final stage! It might come minutes. hours. 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. 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). days. and the classic Walk Away (Tactic #48). In this process. When multiple issues are at stake and most have been agreed upon during negotiations. If friends or neighbors need to settle something but prefer to avoid the negotiation process.

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

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

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

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

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

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

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

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

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

not the furniture. everyone is busy grappling with the details of the negotiations. 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. We’d like to make you an offer of $150. They saw the “For Sale” and “Open House” signs. Obviously. they looked at this particular house on their own. Bill and Paulette fell in love with the house. all the usual stuff in a sale. At the very least. The owners were selling the house without a real estate agent. Seller: Yes. 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. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. and decided to stop by to see if they liked the house. and one of the other couples looked very interested.000.000.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. Example 1 Bill and Paulette had been house-hunting for some time. and felt that they would have to work fast to make an offer before someone else did. They were not the only couple to come to the open house. During a discussion. Bill: Reaching Agreement 187 . Seller: We’re asking $152. They finally looked at a house they really liked. If we shake hands on it right now. Bill pulled the seller aside. however. and while Bill and Paulette had been using an agent to help locate houses. we won’t be involving our real estate agent. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations.

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

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

Monica accepted the $200.000. 190 50 Practical Negotiation Tactics .000 just to get the employee to “withdraw” the complaint. There was a confidentiality agreement. It was made clear that the employer had paid the additional $100.000 when all that was asked for was $100.She: authorized to pay $200.000 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. I’ll take your offer back to her and let you know. to his disadvantage. but word did get out that a public agency paid $200. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000.

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

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

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

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

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

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

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

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

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

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

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

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