SECTION I: INTRODUCTION

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

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the seller’s agent called the buyer about the property. with “All right.” The agent took the offer to the seller. 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. but the inside was a complete turnoff. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). 34 50 Practical Negotiation Tactics . The buyer said he wasn’t interested. If there is a significant weakness in your position. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). two people on the team will be more successful because they evoke different emotions from the other side. and the buyer was able to completely renovate the house and still have a great deal.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. His teenage sons had “trashed” the house. half-serious. I offer half the asking price. For example. “Please make any offer—they are motivated!” The buyer responded. Weeks later. By assuming opposing roles. The agent explained that the seller was desperate. The buyer loved the location. The desperate owner agreed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2: Distributive Bargaining Process. The negotiator firmly states that it is their best offer in an attempt to gain a nice.000) Target Point ($23. quick agreement. by Michael R.000) Settlement Range ($22. “Distributive” bargaining (“win-lose” or “zero sum”) is used. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. such as proposing to continue at the current rate or price. 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. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). (2004). Adapted from Labor Relations and Collective Bargaining. for example. 190–192.500) Fig. None is as important as the first one.000 22 23 24 25 26 27 Initial Offer $28.750) Target Point ($24.500) Resistance Point ($25. Carrell and Christina Heavrin.500) M $21. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.000 Buyer Initial Offer ($21.750–$25. This is a practical starting point that will not anger the other side (and might even be expected). Another common strategy is to start with the status quo. as illustrated in the following figure: Seller Resistance Point ($22. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. Exchanging Initial Offers 61 .Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.

After initial offers are exchanged. each initial offer ($21. See Tactic #18: Agree on Something As Soon As You Can. When the two parties agree to a price within the range. The settlement range is the distance between the resistance points. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse.000) is reasonable. these points have set the outer limits.000. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. usually. thus producing a true “win-win” negotiation.In this example. 62 50 Practical Negotiation Tactics . if the buyer’s initial offer was $25.000 and $28. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. thus starting out on a positive note. 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). Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. the process quickly narrows to the range between the initial offers. the other side does not agree to this value). it is termed the settlement point – not the “right price” or “fair price. and is the range in which most negotiations actually occur. A target point is the desired settlement value a party has set as a goal when negotiations begin. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. 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). In the example.” but the settlement price. 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).

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

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

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

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

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

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

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

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

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

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

Anne: Same with me. deciding whether there would be annual wage increases as well as merit increases. 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. Angela: That’s fine. 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). and the assignment of the limited number of parking spaces. sick. Several issues also needed to be addressed: the ability of employees to move up through the organization. including benefits for partners in non-traditional relationships. vacation. The third: Ben- Exchanging Initial Offers 73 . the antiques.). The negotiations on the other items—the house. but I’m making no commitment to trade. the jewelry. and the art works—will be more difficult. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. tuition benefits. funeral. Employees: We’ve got a lot of items to cover. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). what kind of paid leaves there will be (personal. The following tasks needed to be a accomplished: establishing basic pay schedules. health benefits. and establishing a work schedule to accommodate evening and weekend clients. May I suggest that we divide the items into three areas. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. etc.

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

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

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

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

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

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

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

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

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

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

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

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

think things through before you make or accept the first offer. then $320.000 three years ago). which can be very useful). offer $150.000 two years ago.e.000 and $337. because you have settled quickly. particularly if you don’t know the other party’s “settlement range.000—what they paid for it. 2) Start out with an old number.000. We don’t know how anxious they are to sell or if they know the market.. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure.000 for a house that sold for $185. and that two similar ones on the same street sold for $330. Jay: No. thus requiring greater concessions on both sides. but you feel cursed because you gave away too much. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. That’s a fair price. or 3) Make an unrealistic offer (i. before someone else does.) To prevent this from happening. They found one they both like that lists for $325.000 this year.000. Their realtor told them that it sold for $290. Avoid giving away too much at the outset. at minimum cost.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.” (You have won a settlement. 86 50 Practical Negotiation Tactics . never give them their asking price. such as last year’s price. The other party will probably come back with an equally ridiculous offer. 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.000. Jay: No. and you cannot withdraw it in good faith.” The perfect first offer. of course. Sue: Let’s offer $325. is the most (or least) the other side will accept. The sellers must be willing to come down a few thousand … Sue: Well. Let’s low-ball them and offer $290. and houses in this area sell fast.

the sellers obviously would have accepted and Jay and Sue. That’s an insult! Jay: Well. Exchanging Initial Offers 87 . and the offer was based on fact: the prior negotiated price.000 for each of us—$6. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Sue: Then you do it. I can’t tell our realtor $290. 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. If. They outlined how they would develop a new employee performance-appraisal system. The buyers were very motivated to sell. was very impressed with their presentation. as requested by the human resource director. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No.000 total. (the next day …) Jay: They made us a counteroffer of $307.000.500—half the difference! Sue: Great. but who knows what they are planning on offering. since they had already bought another house.) Bob: I’d do it for $3. then let them make a counteroffer.000. (Bob and Frank meet privately to discuss the situation. Frank: Me too. realizing they offered too much. Both parties felt that they made a good deal. Lyle Foxworthy.Sue: Don’t be crazy. the company president. they had offered $325. as Sue had first suggested. Give us your lowest price.

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

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

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

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

why don’t you just move me to another unit? I’m certain Bill thinks I do good work and would be happy to have me in his group. Andrea: You didn’t list moving to another unit as an option. Andrea. In the last month. we have a very big problem. 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. and resents any attempt by Joe to supervise her work. Joe: Andrea. but it doesn’t solve the problem—nor is it the only problem. rather than to put it off on someone else or for some time in the future. you have a job-performance problem. let me say that I’m handling the missed deadline on the pleading. 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. 92 50 Practical Negotiation Tactics . you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. If you don’t like the way I do my job. which forced Joe to take action. Andrea: Wait Joe. It is to the corporation’s benefit to address that problem here and now. and I don’t see why we don’t have more independence. Joe: Come on. she made a two glaring errors in judgment. I really see your options as follows: You can leave the corporation. so Joe took a “hands off” approach. It was just a comment. To put it as bluntly as I can. Joe: That is certainly an option. however. Andrea: Well. Joe: That’s all well and good. Before you start.herself to be a professional. or you can work out a “supervision” agreement with me so that I can better monitor your performance. isn’t it? But I don’t think just moving you really solves the problem. you know that wasn’t an okay to settle. The attorney for the other side has agreed to give me the additional time to file it. Andrea: We’re hired for our expertise. Her job performance was acceptable.

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

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

500 left. and we both get things we want. Making Counteroffers (The “Give and Take”) 95 . These are all permanent immediate needs.500 $2.200 $200–$2.000 $1. Can we split it evenly? Brooks: Okay.000 $3.500 $500 $1.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.000! Brooks: Good. I’ll trade your sidewalk and trees for my whirlpool bath. Maureen: No. which takes another $3. $750 for lighting and $750 in the bank. which I’d like to keep in the bank.000 $500 $1.500 $5. I’d like to spend some of it on lighting upgrades.000 $2. that makes sense. We have $1.000 $5.# 1 Sod Item Cost $1.

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

the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Health Insurance Employees pay 20% Continue cur. signed.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. and (#9) to continue the often-discussed no strike/no lockout provision.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. Finally. Paid Funeral Leave 9. First. At this point. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). They proceeded to draft the language to settle these issues. they began to trade off the exchange issues of similar value and nature. Overtime Assignment 8. 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 accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). Clothing Allowance Based on senior. and removed from the table. Subcontracting 12.6. eleven of the thirteen original issues to be negotiated had been agreed to. Because they held opposite positions on these issues. Next. Next. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). one Making Counteroffers (The “Give and Take”) 97 . and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). No Strike/No Lockout 10.Distributive rent program co-pay Exchange Exchange 7. Job Security 13. Shift Differential 11.

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

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

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

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

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

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

I bet everyone could make it on Friday. Thanksgiving is Thursday. some people have to work on the Friday after Thanksgiving. Sue: I don’t know. she suggested a unique alternative.. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. Mom’s very upset. we’ll come to Mom’s. and it became the family’s new tradition. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present. So that doesn’t work.m. I know that I would rather not do two Thanksgiving dinners on Thursday. the holiday will be over. either. Bill won the coin toss for this year. Nancy: I’ll let you know. but she won’t tell you. it’s okay with me if you can sell it to everyone else. By being flexible. 104 50 Practical Negotiation Tactics .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. When that goal looked out of reach. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. Celebrating the next day seems odd. Sue: Next year. Nancy: If we keep the time at 5:00 p. There’s nothing “special” about Friday. Nancy: We’d make it special by all of us being together. I thought of asking Mom if she could move dinner up to noon or so. 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. I mean.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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she chose the one she most preferred. Roberto: Well. Roberto: But it will never generate enough interest if no one knows about it. I’m not going back to him again to discuss this program. or we lose a whole year. I’ll approve $15. I can’t help. Felipe: (Roberto’s supervisor) Sorry. Felipe: Sorry.000). But when her mother laid out the schedule and gave her alternatives.000 for advertising. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics .Amber: row before your basketball game. and clean it. I’ll approve $15. Use the $5. but I will cut your staff by one part-time person (or $15. Roberto: But I need to start the direct mail and newspaper ads within two weeks. Amber resisted the chore she hated. Clean it after your game. Three. Take it or leave it.000. Conclusion At first. I’ll find a way to do without one part-time person. or C. Felipe: Well. I have three hours. I can accept B. I’ll do it now. that is enough time.000 budget! I need at least $20. but I will cut your travel budget out completely. Example 2 Roberto: I can’t properly advertise this new program with a $5.000 in the budget. but the company president does not share your optimism on this program. B. keeping her Saturday free. (long pause) Felipe: Let me give you three options: A.000 for advertising. but no TV or anything until it’s done! (pause) Okay.

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

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

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

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

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

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

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

If we invest the $200. The pilots want dependent coverage paid for by the company.000. Over the next five years.000. Over the last five years. the company can make your pensions much better. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. dependent coverage could cost us $1. with all wage and operations issues resolved fairly early. the airline paid a total of $200. However. Pilots: Look. then the pension benefits overall will increase by $10.000.000. This would be a better benefit in the long run. what they really need is for you to cover the costs of dependent coverage. and we know that with this new contract term of five years. and are willing to keep pension benefits the same. As best as we can tell. But only a few of our people are close to retirement age. that would be the minimum increase.000. The company wants to trade paying for dependent coverage for better pension benefits.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000 to cover the premiums for dependent coverage. Everyone was afraid that the dispute would cause an impasse and a possible strike. The projections for the next five years were that these costs would increase to about $1.000 figure. as it has always been. Company: This could not come at a worst time for us. you are taking a risk on the costs increasing.000. And we cannot afford that $1. With long-term planning and investments. we know that health insurance premiums might skyrocket. The airline industry is in a slump.000 a year over the next five years? Company: Yes. 124 50 Practical Negotiation Tactics . the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000.000 (which we reasonably should have expected to pay in premiums) in the pension account now. and the premiums for health care just keep going up. This is just a cash-flow problem that your members have to understand.

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

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

(looks at the numbers) That looks good. Great! So.” She decided to cut the $45.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock.00 per month for your service.00 per month. and added the trade-in. with your car and $6. Once the buyer volunteered that $300 was an affordable “slice. Saleswoman: Simple. I can’t discuss another client’s account.000 down. Sure.99 per month. But my neighbor pays $39. Let’s see. can’t you? Buyer: Yes. do you want HBO? How much? $5. down payment. Instead of a three-year lease. you can get the Disney channel for only $5. do you want Disney? Yes. but let me see the numbers. I can afford $6. it will be a five-year lease.000 price into “slices” the buyer thought reasonable.” she had him—she worked around the $300 slices.00 per month. Making Counteroffers (The “Give and Take”) 127 . I can’t afford that much. You can do that. but what else must I buy? Only the basic service for $8. and payout slices to reach the total price she wanted. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. as promised.Buyer: I don’t see how you can do that.

That’s $5. 2. we had that before. Yeah. 2? How much? $8. That’s another $5. But that’s all! Then we’ll hook you up on Monday. 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. they asked about the Cartoon Network. 3.00 per month. Thanks. and my wife wants the old movies.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. The total is $38. but he agreed to six “salami slices” for a total of $38.00 per month was far too much. instead of one total amount.00 a month. and SI 1. I really want the sports channels. What about the music package? Yes. Okay.00. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00! Why? Because he judged the per-slice price to be reasonable.99 per month. Great. 128 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. The second person then chooses which of the two parts they will receive. of course. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. is usually careful about dividing the object into two equal parts. Oh.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Realizing the potential of getting the “smaller half.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. Many of us learned this one from our parents: After two people agree to the strategy. Maria.” the divider. Maria and Roberto: No. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . take this knife and slice the Snickers into two halves. the classic “split and choose” tactic might be the best way to settle the issue. because you did the cutting. Roberto will get to choose which half he wants. which certainly is large enough (he naively thought) for two young children to easily share. with the remaining part going to the person who did the dividing. Their dad instructed them to share the candy bar. one person is given the task of dividing the object(s) into two parts.

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

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

delivery was limited to a small geographical area. With a great deal of effort. supposedly the bargainer in the household. etc. However. Her husband Jason.” thus extending the scope of the negotiations. miles from their home. Conclusion The amount the couple spent was fairly large. we’ll take the suite if you’ll throw in free delivery and set up the furniture. and the delivery carrier doesn’t set up mirrors. Jason was having a hard time getting the salesman to lower the price. so the salesperson delivered the suite himself. His tactic was to throw in a “nickel” in order to make lots of “dollars. attach legs. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item.” Many people have witnessed or used this effective negotiating tactic. Brenda did her part when she said.” Under store policy. “Okay. is expected to dicker over the price. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. What started out as a single issue is now a combination of a major issue and a much smaller issue. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). he also set up all of the furniture in a second-floor bedroom.Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way. 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 .

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

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

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

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

We love your house. $235.000. but you’ve priced it way too high. Sometimes. (Next day) We’ve reviewed the records you’ve produced. but the key is to gather facts that you might need—not just the facts that you will need. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . the other party will ignore or refuse to believe the information. $237. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000. What? That’s $35. Sam Jones. has owned the house for 24 years and is downsizing to a condo. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000. This offer is for more money than any four-bedroom houses on this neighborhood list. They believe it is overpriced. and we are countering with an offer of $250. They sold for: $225. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.000. I’ll get back to you.000. $229.500. Here’s a list of the five that are about the same size as yours. but the right facts presented at the right time can chill or astound and completely turn things around. The owner.000. and $237.000 under the listing price! We realize that.000. but we feel that it’s a fair offer.

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

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

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

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

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. When multiple issues are at stake and most have been agreed upon during negotiations. T Reaching Agreement 177 . 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. If friends or neighbors need to settle something but prefer to avoid the negotiation process. hours. 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. 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. days. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. When two parties believe they have an oral agreement. and the child learns an important lesson about life. 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). this process can easily result in a final settlement. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. In this process. 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.Stage 7: Reaching Agreement he final stage! It might come minutes. and the classic Walk Away (Tactic #48). They bring it out when a dispute arises. or even months after the first offer is presented. this tactic can produce an agreement.

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

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

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

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

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

He met with Bizannes twice before. (Judy and Larry walk into the back room and close the door. Larry. and I’m prepared to offer you $4.5 million. you’ve already told us that.5 million for the building. You rejected it. Michael calls on them again with a check for $5. go back to your office. a local developer. I still want to develop this block. One day. and he is offering us $4. In reality. Reaching Agreement 183 . Michael: I have a check right here for 4. let’s eat lunch. and we gave you our price. our accountant said it’s worth $6 million. Michael: Well. Larry: Yes. and I’m not interested in less.both of them love their store. Larry. Larry: Judy.) Larry: Michael is here again.5 million. What do you think? Judy: Larry. so why are you here? Michael: I’ve discussed it with my partners. come out here! (Judy comes out from the back room. but their continued walkout convinced Michael that they would hold firm. with a certified check. and I only need your building to own it.5 million. today. visited their store.0 million. Two months later. Michael: Good morning.) 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. Larry: Michael. How’s business? Larry: Great! I’m surprised to see you again. they were prepared to accept $5. Judy: Larry. after no contact from Larry or Judy. which the Bizannes accept. Michael Roberts.

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

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

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

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

It worked. Seller: Okay. Example 2 Monica brought a sex discrimination charge against her employer. Let me just get the standard “offer of sale” form and fill out what I hear you saying. In the section for fixtures and miscellaneous items to be left on the property. he listed an attached hutch in the kitchen. and two area rugs. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. then we have a deal. I think we can work something out. look this over. (The seller recorded the offer of $150. When he had the chance to put the deal in writing. and the garbage disposal. The supervisor assured the employer that there was no basis for her complaint. he left the price at $150. the hutch.Seller: Just a minute. The supervisor pointed out that he had a staff of 20 or so women. Sign here. a public agency. and the two area rugs. he began to have “problems” with her job performance.000. the house is yours. that’s what I meant. she said that her supervisor had repeatedly asked her out. and when she refused. but I’d like to make sure there are no misunderstandings. all window blinds and drapes. the refrigerator. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and that the problems with her job performance were. real.) Seller: So. since he probably would have missed them) Yes. and had been prepared to drop his price to $145.000. If it’s what you meant. Conclusion The seller had always intended to leave the garbage disposal. and the two area rugs were specifically included. he listed the stove. in fact. Under the section for appliances to be left on the property.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. Bill: (pleasantly surprised to learn that the garbage disposal. the hutch. In her complaint.

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

It was made clear that the employer had paid the additional $100.000.She: authorized to pay $200.000 when all that was asked for was $100. but word did get out that a public agency paid $200.000.000 and the conditions of the offer. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. to his disadvantage. There was a confidentiality agreement. 190 50 Practical Negotiation Tactics . I’ll take your offer back to her and let you know.000 just to get the employee to “withdraw” the complaint. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. Monica accepted the $200.

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

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

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

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

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

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

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

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

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

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

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

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