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



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


50 Practical Negotiation Tactics

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



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

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

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

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

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

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

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

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




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


50 Practical Negotiation Tactics

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

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



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

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

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

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

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

but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. (Think of the showroom tactics used by car dealers. such as a hotel conference room. Bailey: Cybil: Preparation 21 . Make up your minds. girls.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. too. 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. it’s a deal. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. they have the information they need at their fingertips. (thirty minutes later) Bailey: So.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. and so on. Cybil. they control the breaks and environmental factors. and go play somewhere! Cybil: Well … Okay.) Let’s take all our Beanie Babies to my house to trade! Okay. the frog is everybody’s favorite. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. Mother: Hush. I like the frog.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

she kept Mike as a residential customer as well as a business customer. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. either. and I should be treated with more respect! I’m sorry. I would hope that you would credit my account for this better rate for past service. In doing so. but I can’t do that. however. strategic anger and abusive behavior. which should rightly be $50.10 per minute. a long-time customer of your company. between controlled. don’t think this is directed at you personally. I … (interrupting and in a stern. But I’m looking at a $500 longdistance bill. 44 50 Practical Negotiation Tactics . controlled voice) I need to talk to someone who can do it immediately. (with a much angrier tone) Madam. there’s no reason for this conversation to continue. The best we can do is fix the rate for the future. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. Wait—I’ll get my supervisor. after all. Mike’s willingness to show a measured “flare of temper” brought results. but I am very angry with Over-the-Air Company. We certainly don’t want to lose you as a customer. If you can’t get me someone to talk to. and I want to speak to someone in authority so I can terminate my service. He was walking a thin line.Mike: I would imagine so. I am. The latter would not have produced the desired results.

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. On those overtime shifts. They will be putting the plant AND their fellow workers at risk by not being here. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . and it’s not what we’re even talking about. The owner told the employees that he was worried that during the overtime shifts.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. that’s just not fair. Working with fireworks is working with explosives. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. and that they should be asking for a fairer base wage for the work they do for you. lesssenior employees might be at greater risk of injury because they have to handle explosives. and it’s getting old. 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 would become dissatisfied with their pay and want their base pay increased. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. and you just can’t be too careful. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. Owner: Now. The employees’ negotiator finally decided to use “indignation” to break the stalemate. I’ve got to have the employees with the most experience to protect this place.

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

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

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

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

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

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

and then asked their mom for a chance to negotiate with each other. Usually. and neither boy was very happy. the last piece of cake will get thrown away. If this was chocolate icing. Be clear on what you have in common at the start. you want to reach an agreement that is favorable to an outside party. they saw that there was one piece of cake left over from their mom’s bridge party. Example 1 When Russ and Bill got home from school. The two boys fought over the last piece of everything. she decided to try something different. These positive things are part of your goals and objectives. When they boys returned. That simply rewards your continual squabbling. because I am so conscientious about my paper route. particularly when things seem to be at a standstill. This time. and so on. The boys quickly huddled. They immediately began to fight over it.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. like we usually have. she made them share whatever it was. Russ: 52 50 Practical Negotiation Tactics . and their mother was tired of it. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. I wouldn’t care so much. you both want to complete negotiations by a certain date. Unless you can convince me otherwise. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. neither of you want to be embarrassed at the outcome. here’s what they said to her: I think I should be rewarded with the piece of cake. I missed dessert the other night because I had to get to baseball practice. point them out at the very beginning of negotiations and refer to them throughout the process.

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

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

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

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

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

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

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

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

(2004).000) Target Point ($23.000 22 23 24 25 26 27 Initial Offer $28. by Michael R. Adapted from Labor Relations and Collective Bargaining.750) Target Point ($24.000) Settlement Range ($22. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party.500) M $21.000 Buyer Initial Offer ($21. 2: Distributive Bargaining Process.500) Fig.750–$25. as illustrated in the following figure: Seller Resistance Point ($22. Another common strategy is to start with the status quo. for example. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. “Distributive” bargaining (“win-lose” or “zero sum”) is used. This is a practical starting point that will not anger the other side (and might even be expected). such as proposing to continue at the current rate or price. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. 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. quick agreement. Exchanging Initial Offers 61 . None is as important as the first one.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. Carrell and Christina Heavrin. The negotiator firmly states that it is their best offer in an attempt to gain a nice. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).500) Resistance Point ($25.

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

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

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

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

Union negotiator #2: Please—just a moment outside. What is this. it’s a good proposal. many will want to use it for their children’s education. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. 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. With the cost of college educations so high.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. and the following conversation occurred. The company’s negotiator didn’t recognize the misunderstanding. The tuition benefits will encourage the workers to be prepared for new job opportunities. Tuition in place of health insurances? They’ll think I’ve lost my mind. A lot of employees have spouses who can get health insurance coverage through their work. Union: (angrily) I’m not presenting this proposal to my people. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. 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. 66 50 Practical Negotiation Tactics . I’m just saying that tuition benefits are sometimes a good substitute for health insurance.

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

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

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. Conclusion Mr. Miguel. The manager was convinced enough to sacrifice a final $100 for the throwaway. The three are sitting at a lunch table to discuss the schedule. The days in question are: Exchanging Initial Offers 69 . Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker... 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 . At the very end of the negotiations. All three employees must agree to the schedule. Then we have a deal.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. 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. and seniority will be used to determine who gets to choose the first day. Hobbs successfully chose color as a throwaway it’s not. Example 2 The office supervisor told the three internal sales representatives (Jenny. I’ll take the red one for $100 less. Employees will be paid time-and-a half for each of these days.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

or 3) Make an unrealistic offer (i. 2) Start out with an old number.e. Jay: No. never give them their asking price. and you cannot withdraw it in good faith. Avoid giving away too much at the outset. and houses in this area sell fast. and that two similar ones on the same street sold for $330.000. Jay: No.000 for a house that sold for $185. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. at minimum cost.000—what they paid for it. The other party will probably come back with an equally ridiculous offer. 86 50 Practical Negotiation Tactics . The sellers must be willing to come down a few thousand … Sue: Well.. think things through before you make or accept the first offer. of course. before someone else does. such as last year’s price.000 two years ago. but you feel cursed because you gave away too much. is the most (or least) the other side will accept.000. offer $150.000.000 three years ago). 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. 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.” (You have won a settlement.000 this year. That’s a fair price. They found one they both like that lists for $325.000 and $337.) To prevent this from happening. Let’s low-ball them and offer $290. then $320. thus requiring greater concessions on both sides. which can be very useful). We don’t know how anxious they are to sell or if they know the market. Their realtor told them that it sold for $290.” The perfect first offer. because you have settled quickly. Sue: Let’s offer $325.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. particularly if you don’t know the other party’s “settlement range.

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

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

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

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

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

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

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

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

500 $5.000 $5. We have $1.200 $200–$2.000 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.# 1 Sod Item Cost $1.000 $1.500 left. Maureen: No.000 $2.000! Brooks: Good. which takes another $3. Making Counteroffers (The “Give and Take”) 95 . I’ll trade your sidewalk and trees for my whirlpool bath. These are all permanent immediate needs. $750 for lighting and $750 in the bank. that makes sense.000 $3. Can we split it evenly? Brooks: Okay.500 $2. and we both get things we want.500 $500 $1.000 $500 $1. which I’d like to keep in the bank. I’d like to spend some of it on lighting upgrades.

Conclusion By taking the time to list all the items each person wanted and their cost estimates. Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. During that time. All items to be negotiated and their desired outcome for each item were put in writing for review. The combined lists total thirteen different items: Desired Outcome No. both sides exchanged lists of initial demands at their first meeting. finally agreeing to split the difference on the remaining amount (distributive items). Drug-Testing Program 96 50 Practical Negotiation Tactics . Pension Increase 3. management and union negotiators found that a “winwin” approach to negotiations worked well. Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). Profit-Sharing 5. Length of Contract 2. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. even in difficult years. This year. Wage Increase 4.

Finally. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). and (#9) to continue the often-discussed no strike/no lockout provision. No Strike/No Lockout 10. one Making Counteroffers (The “Give and Take”) 97 . 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. (#5) a new drug testing program. They proceeded to draft the language to settle these issues. Paid Funeral Leave 9.6. they began to trade off the exchange issues of similar value and nature. First. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Job Security 13.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. and removed from the table. Subcontracting 12. Because they held opposite positions on these issues. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). 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. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). signed. eleven of the thirteen original issues to be negotiated had been agreed to. Shift Differential 11. Overtime Assignment 8. Clothing Allowance Based on senior. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). Next. At this point. Next.Distributive rent program co-pay Exchange Exchange 7.

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

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

midnight during the week is the only thing I’ll consider. but changed his mind when he saw Jasper’s attitude. curfew on TV and other noise every night. Under ABC ‘s contract with the union.m. and the union foreman would report directly to the plant manager. Under the restructuring. is all I’ll consider.) Listen. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. Jasper: Midnight. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. Jasper: (without taking a breath) At best. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . and d) a hearing with company owner if the matter is not resolved in 20 days.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. the positions of non-union crew leader and floor manager would both be eliminated. The appeals procedure would have to be altered to reflect the restructuring. The union contract required that management renegotiate this change in the grievance procedure with the union. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. I want a 10:30 p. No agreement was reached. 10:30 p. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. b) written complaint to a floor manager if the matter is not resolved in 5 days. Rob: (there is no hesitation in this voice) No. and that’s it. and that’s not negotiable.m.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


50 Practical Negotiation Tactics

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

Making Counteroffers (The “Give and Take”)


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


50 Practical Negotiation Tactics

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

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

Making Counteroffers (The “Give and Take”)


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

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

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

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

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

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. In the end.represents have to worry that her desire to switch governments might taint the negotiations. 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. and the agreement was renewed with no new provisions. the Town Council representative’s position prevailed. He either had to end the session or figure out what to say to reengage the other side. I don’t know what her reaction will be. Conclusion By remaining silent. Making Counteroffers (The “Give and Take”) 121 . Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. I’ll go back and tell Madame Mayor your position. Mayor’s representative: Well. I hate not to attempt to add some additional areas to the agreement.

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

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

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

Pilots: But you do have the $200. The pilots expanded the range of options. with a cap of $200. the company will not be expected to give us this benefit. The dependent coverage is more important to us now than the pension benefits. then those funds will not be available to invest in the pension plan.000 available. If we can get two or even three years out of the $200. however.000 actually carried them through four years. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. Company: Then it’s okay with us. by agreeing to let the company cap its exposure for dependent health coverage. if they were that high. Making Counteroffers (The “Give and Take”) 125 . It initially believed that the only option was to put that money into pension benefits. we are. so the decision to be flexible was a good one. The $200. can we agree to a year-to-year agreement on dependent coverage. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. The health insurance market stabilized. that would be worth it. Company: If the company spends the $200.000.000 to either pay one year of the premiums. or invest in the pension plan? Company: Yes. Conclusion The company was committed to limiting its exposure to $200.000 the first year on the premiums.000? Once the cap is met. and the pilots knew what to ask for when the contract expired.

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

but let me see the numbers. do you want Disney? Yes. But my neighbor pays $39. with your car and $6.000 down. do you want HBO? How much? $5.99 per month.000 price into “slices” the buyer thought reasonable. it will be a five-year lease. You can do that. but what else must I buy? Only the basic service for $8.Buyer: I don’t see how you can do that.” She decided to cut the $45. Let’s see. Making Counteroffers (The “Give and Take”) 127 . Once the buyer volunteered that $300 was an affordable “slice. and payout slices to reach the total price she wanted. and added the trade-in. can’t you? Buyer: Yes. you can get the Disney channel for only $5. (looks at the numbers) That looks good. Instead of a three-year lease. Sure.” she had him—she worked around the $300 slices. I can’t afford that much.00 per month.00 per month for your service.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. as promised. Saleswoman: Simple. Great! So. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.00 per month. I can’t discuss another client’s account. I can afford $6. down payment.

Okay. instead of one total amount. That’s another $5. The total is $38. 128 50 Practical Negotiation Tactics . and my wife wants the old movies. I really want the sports channels. But that’s all! Then we’ll hook you up on Monday. 2.99 per month. Great. and SI 1. What about the music package? Yes.00! Why? Because he judged the per-slice price to be reasonable. Disney is for the kids! The sports channels are for me. Conclusion The owner thought his neighbor’s service at $39. Any other kids’ channels? Yes. 3.00. Yeah. they asked about the Cartoon Network. we had that before. 2? How much? $8.00 a month.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.00 per month.00 per month was far too much. Thanks. That’s $5. but he agreed to six “salami slices” for a total of $38. and probably felt much better about the total negotiated package because it was presented in modest individual slices.

and it can destroy your credibility. For example. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). When both sides believe that each has equally strong positions. A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. but in tense. 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). It should be used with caution: It can end negotiations immediately.m. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. turned off by the tactic. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Tactic #33 (The Bluff) is a classic pressure tactic. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. which can be successful if the opposing team has two or more members who hold different views of an issue. however. today. and the use of humor. but others will walk out the door. Applying Pressure 129 . so are you ready to make a deal? This might convince a few buyers.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. “I can only guarantee this price until 6:00 p. the traditional car salesperson might tell the buyer. pressure tactics should probably be avoided. In some cases. but it can be used effectively when one party clearly has an edge. Humor might not look like pressure. angry negotiations. it is effective.

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

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

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

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

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

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

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

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

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

Applying Pressure


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

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


50 Practical Negotiation Tactics

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

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

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

Applying Pressure


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

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


50 Practical Negotiation Tactics

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

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

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

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

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

I’d 146 50 Practical Negotiation Tactics . Tina: I’m really against this pool table idea. Mike knows he needs to get either his wife or his son on his side. and a car is more important to him than a pool table. although getting your license and getting a pool table are connected. Kevin is against it because he is turning 16 years-old soon. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. Kevin: So am I.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. Tina and their son Kevin are against the idea. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. night after night. I know we’ll all enjoy it. 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. Mike: I know. 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. 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. they’ll be mobile! The last thing I want is for them to be out cruising around. 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. Dad. Kevin: I don’t really care about a pool table. especially Kevin. 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.

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

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

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


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

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

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


50 Practical Negotiation Tactics

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

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

Applying Pressure


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


Making Progress


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the other party will ignore or refuse to believe the information. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. but you’ve priced it way too high. We love your house. This offer is for more money than any four-bedroom houses on this neighborhood list.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . $237. Sam Jones.000. has owned the house for 24 years and is downsizing to a condo. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. (Next day) We’ve reviewed the records you’ve produced. They sold for: $225. The owner. but the key is to gather facts that you might need—not just the facts that you will need.000 under the listing price! We realize that. $229. What? That’s $35.000. but we feel that it’s a fair offer. Sometimes.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. I’ll get back to you. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. Here’s a list of the five that are about the same size as yours. $235. They believe it is overpriced. and we are countering with an offer of $250. Example 1 Henry and Maria Lopez are interested in a house that lists for $ and $237.500.000. but the right facts presented at the right time can chill or astound and completely turn things around.

I’ll get called on the carpet.600 unless the company president approves.400 each. The last 20 were over $2. Example 2 Supervisor: You know the policy. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. if other departments have ignored the policy. Making Progress 173 . I asked for a list of all new PCs bought this year.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Hatfield: My staff has done a lot of research. Conclusion Hatfield had anticipated what his supervisor’s position would be. Here it is. That’s the bottom price. We accept. and we know that only this model will meet our needs.600 for a computer. and did his homework. who was not particularly knoledgeable about real estate. Well… We have a written counter of $245. I’ll be… Okay. let’s not worry about it. Order the new computers.000 each. Supervisor: If I okay this purchase order. Hatfield: While I was at purchasing. We’ve talked with purchasing and we have the authority to buy seven for $2. Supervisor: Well. No one can go over $1. He found facts that supported his position. Conclusion The Joneses had based their asking price on the advice of a friend. You can’t pay more than $1.000. and wisely chose exactly when to present them in order to make his point.

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

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

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

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. this process can easily result in a final settlement. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. 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). 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. In this process. hours. They bring it out when a dispute arises. When two parties believe they have an oral agreement. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. this tactic can produce an agreement. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. 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. and the child learns an important lesson about life. or even months after the first offer is presented. and the classic Walk Away (Tactic #48). days. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. 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. T Reaching Agreement 177 .

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

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

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. However. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. 180 50 Practical Negotiation Tactics . The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.

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

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

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

184 50 Practical Negotiation Tactics . Lynne and Gary bring the restored Singer to Jenny’s house. Both involve the use of third parties who are objective.000. We have a few dollars invested in parts and we had fun working on it. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. both sides have agreed in writing to accept the arbitrator’s decision. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. Lynne: No. which is generally voluntary. I offered it to you for nothing. Keep the $1.000. Six months later. but they wanted to give Jenny $500 for her “share” of the machine. Jenny: No. and would be able to restore hers as well. Jenny told them to sell it. I won’t take it. Each party wants their offer chosen. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. each party submits their final offer on each unresolved issue (usually in writing) and the arbitrator chooses one as the final settlement as it has been submitted (no changes or compromises). Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. In arbitration. Lynne responded that this was their intention. In final offer arbitration. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Jenny has an antique Singer sewing machine. That was the deal. In mediation. One day Lynne dropped by for a visit and the discussion turned to the old Singer. which she has kept in a barn for over ten years. Lynne told Jenny that she and her husband Gary have restored two other Singers. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. In most arbitrations.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Example 1 Jenny and Lynne are sisters. Let’s split the money. the arbitrator is given the authority to make the parties comply with the final and binding decision. They inform her that they put the machine on e-Bay and have an offer of $1.

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

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

not the furniture. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. and felt that they would have to work fast to make an offer before someone else did. Bill and Paulette fell in love with the house.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. Seller: We’re asking $152.000. Bill pulled the seller aside. and while Bill and Paulette had been using an agent to help locate houses. 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 owners were selling the house without a real estate agent. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. and decided to stop by to see if they liked the house. They finally looked at a house they really liked. however.000. At the very least. We’d like to make you an offer of $150. If we shake hands on it right now. They were not the only couple to come to the open house. Example 1 Bill and Paulette had been house-hunting for some time. Seller: Yes. and one of the other couples looked very interested. they looked at this particular house on their own. everyone is busy grappling with the details of the negotiations. all the usual stuff in a sale. They saw the “For Sale” and “Open House” signs. Bill: Reaching Agreement 187 . During a discussion. Obviously. we won’t be involving our real estate agent.

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

Why’s that? Well. even though you are paying Monica because we can prove he did do something wrong. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. 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. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. And the confidentiality clause is standard.000 without actually having to prove anything.there was little basis for the complaint.000. Monica had.000. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. You’re just trying to make it seem as if your supervisor did nothing wrong.000.000. The supervisor insisted that if the employer felt he had to settle. I’m He: She: He: Reaching Agreement 189 . He’s happy to prove that in court. and expensive matter. but it’s not standard when a complaint is formally withdrawn. He offered to send settlement agreement papers to her. by this time. But the employer doesn’t want to go through the expense and publicity of a trial. even though we’re certain we would prevail. It might be standard when there’s a settlement. and must agree not to tell anyone about the $100. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. you didn’t mention in the agreement that in exchange for the $100. drawn-out. but said that fighting the charges would be a long. Look. then Monica had to acknowledge that the supervisor did nothing wrong. my client is supposed to formally withdraw the complaint rather than just settle it. Withdrawing.

to his disadvantage.000 and the conditions of the offer. I’ll take your offer back to her and let you know. but word did get out that a public agency paid $200.000. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume.000.She: authorized to pay $200. 190 50 Practical Negotiation Tactics . There was a confidentiality agreement.000 just to get the employee to “withdraw” the complaint. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. It was made clear that the employer had paid the additional $100.000 when all that was asked for was $100. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. Monica accepted the $200.

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

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

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

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

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

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

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

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

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

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

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