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

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

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

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

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

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

Information.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 .

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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

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50 Practical Negotiation Tactics

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

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

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Conclusion Selling their business was the Jaggers’ BATNA. 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. 16 50 Practical Negotiation Tactics . the Jaggers decided to seek buyers for their land. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. The Jaggers gave the union their “last. as Harvey had for many years. and it now employs 230 craftsmen.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. The union negotiators convinced the employees that this too. When negotiations with the union became hopeless. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. With only two weeks remaining before a threatened strike. The owners. The $56 million dollar business took them 30 years to grow. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. and equipment. For the past two months. They learned that their assets would be easy to sell and were worth more than originally estimated. In this case. The union is demanding wage and benefit increases. as a last resort. was a power play. best. providing them with a very good income for life. selling became an attractive alternative to a strike or prolonged battle. notified all the employees of their intentions. The union negotiators thought the Jaggers were bluffing.” which was refused. The threatened strike became a reality. but rather what the buyer planned to do with the car. his BATNA was not to hold out for more money. and final offer. inventory. 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

not for $1. They cost about $300. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Andy and Paula. and I know how you take care of things. Andy: No. while another acts difficult. I’ll go home and you can call me if you two can reach an agreement. Andy and Paula: Yes. (bad guy) and implies that his or her side will hold firm on their demands.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. etc. Peggy: I assumed they went with the mower. I can use them.200. Peggy: So. Paula: Go ahead and ride it home. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. I don’t know what the deal is now.200! We should get $1.400 if the catcher and can are included. And take the leaf-catcher attachment and the gas can. what’s your price? Andy: $1. I want to keep those. Andy: No. only three years ago. threatening. since they are sitting out in the driveway with it. Half what it cost us new. Andy: I want them… Paula: Go ahead and take them. I heard that you want to sell your riding mower. Peggy: I’m hearing one thing from Paula and another from Andy. Peggy. Peggy: Planning a Strategy 39 . Peggy: That’s fair. you’re really moving! I hate to see you leave. Example 1 So. angry. we won’t need it at the new condo. so I’ll take it.

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

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

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

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

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

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

46 50 Practical Negotiation Tactics . Then you can’t have it both ways.) Now. Until you’re ready to talk about that. The end result was that the most-senior employees did win the right to refuse overtime. All I’m saying is that the most-senior employees have to be on the overtime shifts. You are not addressing the real issue for you: money. In practice. though. Sit down. or they’re not. The negotiator was also running a risk with his flare of temper. The safety of the plant demands it! (standing up to leave) This is just ridiculous. most of them continued to take all the overtime they could get. 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. either the employees are properly trained. now. After the employees’ negotiator threatened to walk out. I’m not coming back. Either they are properly protected. or they’re not. don’t be so hasty. Had the owner let him leave. What if we were to agree that the senior employees could refuse half of the overtime offered to them. (He begins to walk out. sit down. But we protect our people. he became more reasonable. not at all. No one who takes a job with us can be unaware of that. But the fireworks business is a business that involves risk. That’s all.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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

500) M $21. by Michael R. as illustrated in the following figure: Seller Resistance Point ($22. Exchanging Initial Offers 61 . “Distributive” bargaining (“win-lose” or “zero sum”) is used. Another common strategy is to start with the status quo. This is a practical starting point that will not anger the other side (and might even be expected). 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.750) Target Point ($24.500) Fig. (2004). Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.000) Target Point ($23.500) Resistance Point ($25. for example. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.000 Buyer Initial Offer ($21. Adapted from Labor Relations and Collective Bargaining. The negotiator firmly states that it is their best offer in an attempt to gain a nice.000) Settlement Range ($22. quick agreement. Carrell and Christina Heavrin. 2: Distributive Bargaining Process. such as proposing to continue at the current rate or price. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party.000 22 23 24 25 26 27 Initial Offer $28. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. 190–192. None is as important as the first one.750–$25. 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.

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

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

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

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

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

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

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

The days in question are: Exchanging Initial Offers 69 . Conclusion Mr. Then we have a deal. Employees will be paid time-and-a half for each of these days. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. Miguel. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I . and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. All three employees must agree to the schedule.. Hobbs successfully chose color as a throwaway item. The three are sitting at a lunch table to discuss the schedule.. At the very end of the negotiations. The manager was convinced enough to sacrifice a final $100 for the throwaway.. Example 2 The office supervisor told the three internal sales representatives (Jenny. and seniority will be used to determine who gets to choose the first day. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). I’ll take the red one for $100 less.no it’s not.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker.

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

A reluctance to include one particular financial item with other financial issues. realizing that the total cost of a deal might make or break the agreement. for example. 300 shares of stock in a pharmaceutical company. we need to sell the house. Anne: As I see it. can indicate that something you think is minor is really a major concern to your opponent. their mom left specific pieces of jewelry and art in the will to each of the girls.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. In addition. one might package all of the financial issues in one group and negotiate on that package as one issue. The estate’s assets included a checking and savings account totaling $450. Anne and her sisters.000. were faced with the task of selling the house and disposing of their mom’s personal belongings. 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. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. and a collection of antique furniture. a house valued at $250. Autumn and Angela. 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. and the stock and distribute the proceeds. the antiques. but I’d like to talk about the house and the furniture. For example. it is often helpful to package the items in distinct groups and then deal with each package separately. When the girls decided it was time to talk about the estate. they met at the house. Example 1 When their mother died at age 82.000 with no mortgage on it. three ways. The house and much of the furniture has been in the Exchanging Initial Offers 71 . Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. along with the cash.

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

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

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

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

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

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

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

and it came with the bush hog and the leaf pick-up. We plan to put an ad in the paper next week. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. Ann: Thanks! We really need one. but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. Exchanging Initial Offers 79 . Ann: Well. but if you’re interested. 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. 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. Okay? No quibbling. You must mean what you say and be prepared to walk away from an unacceptable offer. we’ll sell it to you. Ann: That sounds great! I don’t want this to affect our friendship. no hard feelings either way. Jeff spends many hours mowing the yard every week. I know you and Jeff said you’d like one because you have about five acres. consider using the “First and Best” tactic. I don’t have any idea. What do you want for it? Colleen: Well.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. we paid $5.000 for it six years ago. The “first and best” tactic enabled them to settle the matter easily. and even more hours in the fall picking up leaves. we plan on selling our Ford tractor when we move. Why don’t you give me a price? Colleen: Oh. I don’t want to quibble. Example 1 Colleen: Ann. period.

We want you.Example 2 Archie: Well. So. I expect a fair increase. except salary. (three days later) Vernon: Archie. Archie: Thanks. and you know my current salary. 80 50 Practical Negotiation Tactics . on this slip of paper. 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. Here it is. I’ll get back to you in three days. Conclusion Archie accepted the job offer. but we have internal budget considerations and we must consider equity with other employees. I think we have agreed to all aspects of the job offer. and I’ll take 48 hours to consider it. He also started the job with a positive working relationship with Vernon. Okay? Vernon: That sounds good. I’ll either accept it or reject it. who admired the way Archie negotiated his starting salary. no questions asked. as we agreed. how about you making your first salary offer your best one. I want the job. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. I came up with the best salary offer I can make. I’ll discuss it with my wife and get back to you in 48 hours.

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

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

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

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

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

and that two similar ones on the same street sold for $330. They found one they both like that lists for $325. The sellers must be willing to come down a few thousand … Sue: Well. 86 50 Practical Negotiation Tactics ..000 three years ago). particularly if you don’t know the other party’s “settlement range. or 3) Make an unrealistic offer (i.000 for a house that sold for $185. We don’t know how anxious they are to sell or if they know the market. The other party will probably come back with an equally ridiculous offer. of course.000. 2) Start out with an old number. thus requiring greater concessions on both sides. Their realtor told them that it sold for $290. never give them their asking price. such as last year’s price. Sue: Let’s offer $325. at minimum cost. Jay: No.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.) To prevent this from happening. then $320.000 this year.000 two years ago. Let’s low-ball them and offer $290. Avoid giving away too much at the outset. is the most (or least) the other side will accept.000—what they paid for it.e. That’s a fair price. and you cannot withdraw it in good faith.000 and $337.000. and houses in this area sell fast. think things through before you make or accept the first offer.” (You have won a settlement. 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. because you have settled quickly. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. offer $150. Jay: No.” The perfect first offer. but you feel cursed because you gave away too much.000. 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. which can be very useful). before someone else does.

They outlined how they would develop a new employee performance-appraisal system.000 for each of us—$6.000. was very impressed with their presentation. but who knows what they are planning on offering. Exchanging Initial Offers 87 . Sue: Then you do it. the company president. the sellers obviously would have accepted and Jay and Sue. If. and the offer was based on fact: the prior negotiated price. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. as requested by the human resource director. realizing they offered too much.000.) Bob: I’d do it for $3. Lyle Foxworthy. since they had already bought another house.Sue: Don’t be crazy. (Bob and Frank meet privately to discuss the situation. they had offered $325. Frank: Me too. Give us your lowest price. That’s an insult! Jay: Well. The buyers were very motivated to sell. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. as Sue had first suggested.000 total. 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. Both parties felt that they made a good deal.500—half the difference! Sue: Great. then let them make a counteroffer. (the next day …) Jay: They made us a counteroffer of $307.

What’s the cost? Bob: We want the job. and you two come highly recommended.000. Bob: That’s fair. and it would not apply. We’ve waited long enough. 88 50 Practical Negotiation Tactics . 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. but we know you must have an amount budgeted for this and we are willing to do it for that amount. That is all that’s left in this year’s training budget. I’m out of time. We’ll do the job. They also ended up getting three times ($18. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer.000) their minimum price of $6.) Lyle: Okay. but we can’t pay more than $18.000.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. Lyle: Okay.

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

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

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

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

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

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

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. that makes sense.000 $1. which takes another $3. which I’d like to keep in the bank. Maureen: No.000 $3. Making Counteroffers (The “Give and Take”) 95 . and we both get things we want.# 1 Sod Item Cost $1. Can we split it evenly? Brooks: Okay.500 $5.000! Brooks: Good. $750 for lighting and $750 in the bank. These are all permanent immediate needs.000 $500 $1. We have $1.000 $2.500 $2.000 $5.500 left. I’d like to spend some of it on lighting upgrades. I’ll trade your sidewalk and trees for my whirlpool bath.200 $200–$2.500 $500 $1.

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

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

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

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

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

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

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. This time. the two parties did meet again. the company entertained the ideas the union had tried to propose before. 102 50 Practical Negotiation Tactics . After a cooling off period.two-step grievance procedure instead of a four-step procedure. Union: We’re very serious. and actually accepted a three-step procedure. We’ll see you on the picket line. and we’ll strike if we have to. 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. rather than in the 35 days the current system provides.

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

either.m. 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. we’ll come to Mom’s. Mom’s very upset. she suggested a unique alternative. I bet everyone could make it on Friday.Nancy: It just won’t be right without you guys. Nancy: I’ll let you know. but she won’t tell you. the holiday will be over. Sue: Next year. 104 50 Practical Negotiation Tactics . By being flexible. Nancy: We’d make it special by all of us being together. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present. and it became the family’s new tradition. 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 know that I would rather not do two Thanksgiving dinners on Thursday. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. I thought of asking Mom if she could move dinner up to noon or so. So that doesn’t work. There’s nothing “special” about Friday.. Nancy: If we keep the time at 5:00 p. I mean. but then I realized that the rest of you already go to your in-laws earlier in the day. Sue: I don’t know. Bill won the coin toss for this year. Celebrating the next day seems odd. it’s okay with me if you can sell it to everyone else. Thanksgiving is Thursday. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. some people have to work on the Friday after Thanksgiving.

but we need some assurance that you will be able to build and operate the orphan home at that location.000 a year for operations. City: Can’t you borrow the money from a bank to build the facility. but the principal of the fund can’t be touched. Unfortunately (for Kids’ Home). Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project.Example 2 Kids’ Home. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. we hope to break ground early next year for the new orphan home. the foundation’s regular annual grants come to roughly half of their available funds. They are meeting with the city to ask that the land be donated by the city for the project. a non-profit organization for orphaned children. Each year. Kids’ Home hoped to get $500. but we can’t fund all of the $12 or $15 million. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . we’re committed in theory. City officals: We can probably give you the land for free. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. depending on the cost of the land. We need the city’s help by allowing us to get the city land donated to us (for free). Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. Kids’ Home: As you know. Estimates for building a new orphan home ranged from $12–$15 million. The foundation has a substantial endowment fund. Foundation officals: Oh. Kids’ Home: That’s why we brought the foundation’s officials with us. the interest income of around $6.5 million is available for distribution to numerous charities. We only have maybe $2 million a year to put toward this charity.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.000 actually carried them through four years. The $200. The dependent coverage is more important to us now than the pension benefits. if they were that high. so the decision to be flexible was a good one. or invest in the pension plan? Company: Yes. Conclusion The company was committed to limiting its exposure to $200. and the pilots knew what to ask for when the contract expired. by agreeing to let the company cap its exposure for dependent health coverage. the company will not be expected to give us this benefit. It initially believed that the only option was to put that money into pension benefits. The pilots expanded the range of options. with a cap of $200. Company: Then it’s okay with us. The health insurance market stabilized.000.000 the first year on the premiums.Pilots: But you do have the $200. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. Making Counteroffers (The “Give and Take”) 125 .000? Once the cap is met. that would be worth it. then those funds will not be available to invest in the pension plan. If we can get two or even three years out of the $200. Company: If the company spends the $200. however.000 available. we are. can we agree to a year-to-year agreement on dependent coverage.000 to either pay one year of the premiums.

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

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

we had that before. Yeah. Great.99 per month. Disney is for the kids! The sports channels are for me. That’s another $5. What about the music package? Yes. they asked about the Cartoon Network.00.00 per month was far too much. The total is $38. 3. I really want the sports channels. and SI 1. and probably felt much better about the total negotiated package because it was presented in modest individual slices. That’s $5.00 per month.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.00! Why? Because he judged the per-slice price to be reasonable. but he agreed to six “salami slices” for a total of $38. 2? How much? $8. instead of one total amount. Conclusion The owner thought his neighbor’s service at $39. and my wife wants the old movies. Thanks. 2.00 a month. But that’s all! Then we’ll hook you up on Monday. Okay. 128 50 Practical Negotiation Tactics . Any other kids’ channels? Yes.

and it can destroy your credibility.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. turned off by the tactic. In some cases. Applying Pressure 129 . but it can be used effectively when one party clearly has an edge. It should be used with caution: It can end negotiations immediately. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. today. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). so are you ready to make a deal? This might convince a few buyers. pressure tactics should probably be avoided. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. “I can only guarantee this price until 6:00 p. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Tactic #33 (The Bluff) is a classic pressure tactic. and the use of humor. Humor might not look like pressure. 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. For example. it is effective. which can be successful if the opposing team has two or more members who hold different views of an issue. the traditional car salesperson might tell the buyer.m. but others will walk out the door. angry negotiations. however. When both sides believe that each has equally strong positions. but in tense.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

Applying Pressure

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

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Making Progress

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. it can be a dealbreaker. “Okay. In one case. so be prepared to withdraw the nickel and dime item at the hint of trouble. we’ll agree to Health Plan A with another ½ cent on the pension fund.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. 168 50 Practical Negotiation Tactics . If one party misjudges the situation. This experienced bargainer said. At the end of negotiations. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations.important item.

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

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

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

Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000. $229. but you’ve priced it way too high. but we feel that it’s a fair offer. has owned the house for 24 years and is downsizing to a condo. Sometimes. 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. $237. They believe it is overpriced.000.000. the other party will ignore or refuse to believe the information. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. They sold for: $225.000.500. This offer is for more money than any four-bedroom houses on this neighborhood list. but the key is to gather facts that you might need—not just the facts that you will need.000 under the listing price! We realize that.000.000. I’ll get back to you. and we are countering with an offer of $250.000. (Next day) We’ve reviewed the records you’ve produced.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. The owner. What? That’s $35. and $237. We love your house. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Sam Jones. but the right facts presented at the right time can chill or astound and completely turn things around. Here’s a list of the five that are about the same size as yours. $235. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.

400 each. Hatfield: While I was at purchasing. He found facts that supported his position. and did his homework. I’ll be… Okay. I asked for a list of all new PCs bought this year. Making Progress 173 .Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. if other departments have ignored the policy. who was not particularly knoledgeable about real estate. let’s not worry about it. You can’t pay more than $1.000. and we know that only this model will meet our needs. Order the new computers. Conclusion The Joneses had based their asking price on the advice of a friend. Here it is. I’ll get called on the carpet.000 each. That’s the bottom price. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. and wisely chose exactly when to present them in order to make his point. We accept. Conclusion Hatfield had anticipated what his supervisor’s position would be.600 unless the company president approves. Hatfield: My staff has done a lot of research. No one can go over $1. Well… We have a written counter of $245.600 for a computer. Supervisor: Well. Supervisor: If I okay this purchase order. Example 2 Supervisor: You know the policy. We’ve talked with purchasing and we have the authority to buy seven for $2. The last 20 were over $2.

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

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

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

Stage 7: Reaching Agreement he final stage! It might come minutes. this tactic can produce an agreement. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. If friends or neighbors need to settle something but prefer to avoid the negotiation process. When two parties believe they have an oral agreement. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. hours. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. In this process. T Reaching Agreement 177 . and the classic Walk Away (Tactic #48). 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. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. this process can easily result in a final settlement. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. They bring it out when a dispute arises. When multiple issues are at stake and most have been agreed upon during negotiations. or even months after the first offer is presented. and the child learns an important lesson about life.

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

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

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

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

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

Larry. come out here! (Judy comes out from the back room. you’ve already told us that. Judy: Larry. a local developer. and he is offering us $4.5 million. Michael calls on them again with a check for $5.5 million for the building. I still want to develop this block. Michael: I have a check right here for 4. with a certified check. Michael Roberts.0 million. Larry: Michael. today. go back to your office. which the Bizannes accept.both of them love their store. What do you think? Judy: Larry. let’s eat lunch. they were prepared to accept $5. and I’m not interested in less. You rejected it. He met with Bizannes twice before.) Larry: Michael is here again.5 million. Michael: Well. Larry: Judy. and we gave you our price. so why are you here? Michael: I’ve discussed it with my partners. (Judy and Larry walk into the back room and close the door. Two months later. Larry. Michael: Good morning. In reality.) 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. our accountant said it’s worth $6 million.5 million. How’s business? Larry: Great! I’m surprised to see you again. and I only need your building to own it. and I’m prepared to offer you $4. Reaching Agreement 183 . Larry: Yes. visited their store. after no contact from Larry or Judy. but their continued walkout convinced Michael that they would hold firm. One day.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

202 50 Practical Negotiation Tactics . the City and a for-profit hospital for guaranteed indigent health care services for city residents. 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. Ms. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. an agreement between the State of Kentucky. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville.park and a successful industrial park in the City’s enterprise zone. 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.

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