This action might not be possible to undo. Are you sure you want to continue?
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.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
4 50 Practical Negotiation Tactics . start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. practical tactics useful in real-life situations at work or at home. with neighbors.negotiator! Pass this book on to someone else who needs it. they pay the sticker price. with family members. Most readers will no doubt recognize some of these strategies. • A co-worker asks for volunteers for a new project. Unfortunately. Who. accept what is given. Instead. exactly. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement. some will in retrospect even remember being the victim of one or two of them. few people understand that normal interactions represent bargaining opportunities. such as these: • You receive the wrong order at a restaurant. But if you scored 8 or less. 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. but many of us miss the opportunity to bargain in other situations. or engage in an unproductive argument. at a flea market. • A child wants a new toy now.
A teenager wants to buy his/her first car. you must advise the other party of your intention to negotiate. “Well. What are my alternatives?” During an employee evaluation. In some circumstances. Flexibility.” When you recognize that something can be negotiated. perhaps you can say to a hotel clerk. since you lost my reservation. or items of value. time.• • • • • • • A hotel clerk tells you that your reservation was lost. Your spouse wants to buy new furniture. and I don’t have time to wait for another. For example. The parties involved can make a decision by themselves. The parties involved are interested in reaching a common goal. 3. A service repair person gives you an estimate on some work. There must be a conflict in the sense that what one wants is not what the other wants. condition. be prepared to bargain. Both sides want a settlement. “I’d like Introduction 5 . Interdependency. Your boss reviews your past year’s performance. 4. some resolution must be negotiated. Decision-making ability. A friend is about to select the movie he/she wants everyone else to see. There are flexible elements to the situation. 5. Therefore. Multiple parties. The parties are interdependent: what one party does affects the other. perhaps the employee can say. Mutual goals. All of these situations are opportunities to negotiate. one party is only allowed to follow policy or must wait “until the manager arrives. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. such as price. that can be negotiated. A neighbor wants to remove an old tree on your property line. In some situations. Two or more sides are involved. Each one has the five key characteristics necessary for bargaining: 1. and each side can involve one person or several people (each representing one “side” of the issue). 2.
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. “I see why you want to cut down the tree. and meet with you again. and the tactics that might move the negotiations along. 6 50 Practical Negotiation Tactics . How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. Once a settlement is reached. the facts. the parties and their interests.” To a neighbor you can say. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. Keep this book handy when preparing for any type of negotiation. but I believe it adds value to our house. and use the forms in the back to identify the issues. 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. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them.time to look over this performance review and respond point-by-point. the other party will realize that you intend to negotiate and do not accept the situation.
etc. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. or child. do you believe that you negotiated the best possible deal? 4. In the past. Do you wish you could negotiate a change in your job duties or salary? 7.How good are your negotiation skills? Place a check in the box that applies to you. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . When making a major purchase. Yes No Self-Assessment Quiz 1. When you purchased your last home or car. Do you routinely negotiate for better accommodations when you check into a hotel? 3. spouse. have you ever required a written agreement covering chores. allowance. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. In the past. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. As a parent. but you did not? 8. do you routinely negotiate a last add-on before you close the deal? 9.? 10. or division of household duties. did you request appropriate compensation? 6. The last time you received sub-par service or food in a restaurant.
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etc. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. one for another. They’re referred to as “win-win” because each side can achieve their goal. including those that are less obvious. the process will probably take several weeks or months as the parties move through all the stages. On the other hand. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). state. thus allowing each side to achieve one of their goals. Examples: • office location (city. The Negotiation Process 9 .) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. If it is a relatively informal situation. decide how complicated the issue is. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal).SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. the process will be fairly straightforward. The “Quick Model” approach outlined below is good for simple negotiations.
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. 10 50 Practical Negotiation Tactics . 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. What one side gains. the other side loses. The Comprehensive Model Negotiation is more of an art than a science. or even skipped altogether.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. stages can be combined. rearranged. but feel free to try them when they seem most appropriate to your specific circumstance.
Information. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time.
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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:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
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.
his BATNA was not to hold out for more money.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. The union negotiators convinced the employees that this too. notified all the employees of their intentions. and equipment. When negotiations with the union became hopeless. as Harvey had for many years. best. and final offer. The threatened strike became a reality. Conclusion Selling their business was the Jaggers’ BATNA. The Jaggers gave the union their “last. In this case. They learned that their assets would be easy to sell and were worth more than originally estimated. was a power play.” which was refused. but rather what the buyer planned to do with the car. 16 50 Practical Negotiation Tactics . providing them with a very good income for life. and it now employs 230 craftsmen. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. the Jaggers decided to seek buyers for their land. 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. The $56 million dollar business took them 30 years to grow. as a last resort. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. The union is demanding wage and benefit increases. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. The union negotiators thought the Jaggers were bluffing. The owners. With only two weeks remaining before a threatened strike. For the past two months. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. selling became an attractive alternative to a strike or prolonged battle.
you know. Preparation 17 . sure. Just as important is the why. Example 1 Tom had always admired John’s 1861 Confederate rifle. It is extremely rare—one of only 100 made with that bore and handle. because if the company does not provide relocation benefits. How much are you thinking it’s worth? John: Well. and told John several times to let him know if he ever wanted to get rid of it. it’s still perfect. I’ve been thinking of getting rid of it for a while. right? John: Sure. I think so. Make me an offer. 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.000. Are you finally ready to sell it? Yes. it’s to your advantage to know what is behind a seller’s decision to put it on the market. Just running out of space. What changed your mind about getting rid of it? It is still in perfect condition. A person who has to sell her home because her company is relocating her. you still interested in my rifle? Of course. I’ll have to think about that. This is a good thing to know. John: Tom: John: Tom: Tom. might not be willing to lower her asking price because she knows that her company has agreed to buy the house if she can’t sell it. what the other party’s desired outcome is. Tom: $20. at some point. so Tom was surprised when John called him out of the blue one day with a proposal. John assured Tom that this would never happen. I guess I couldn’t take less than $20.000? That’s more than I planned.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. she might have to take a lower offer just to be able to move. Gosh. for example.
the owner of a small manufacturing company. The sale price for the company has not yet been agreed to. Was Tom interested? Tom declined.500 had an 1861 for sale.500—we’d have a deal. He is two years away from retiring and does not want his business to fail before he does. Rick needs to remain president of the company for the next two years. and we’re committed to keeping it open as a major division of our company. Tom: Okay. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. Without some trust. I’ve been thinking about your offer.000. if you could come up a little—say $18. I don’t think I can go higher than $18. we 18 50 Practical Negotiation Tactics .Tom: Okay. BigManu: Rick. let’s do it. but thought this might explain John’s sudden interest in selling the rifle. Conclusion Tom entered into the negotiations suspicious of John’s motives. No longer worried about John’s motives. Tom now felt comfortable negotiating the price. but then he will be happy to retire. and now the two-year requirement has become a stumbling block in the negotiations. it made the negotiations easier. but I could get the money to you right away.) Tom: John. When Tom found out why John decided to sell his rifle. Well. fearing that this will put all of his employees out of work. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. parties to a negotiation are not likely to reach agreement. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. Example 2 Rick. let me think about it and I’ll get back to you. However. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. John: Well. has begun negotiations to sell his firm to BigManu Company. we really want to buy your company.
they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. In hopes of pushing the deal forward. Working as a division of your company. Within the parameters of efficiency and effectiveness. Let’s talk later. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. BigManu: We just don’t see a way to give you what you want on this. (Between negotiating sessions. and I hired every one of these people. We just can’t make good operational decisions with our hands tied. let’s talk about the job guarantee you wanted. and we think it’s an odd request anyway. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. you will have a say in how the employees are treated. Preparation 19 . The price they gave Rick was actually more than he had expected.) BigManu: Okay. they decided to put their price on the table and revisit the issue after a price was agreed upon. BigManu: You know we want you to stay on and manage this division for us. I just don’t want it to change after I’m gone. and he accepted it subject to agreement on the two-year employment guarantee clause. Rick: These people are the best at what they do. I just can’t go through with this sale. We still can’t find a way to do it. my employees will prove to you that they are uniquely able to run this place. I need to give them some sense of comfort if this deal goes through. I just want them to have a real chance to show you how good they are. Without this commitment. You’ll be in place to participate in our employment decisions. Rick: I built this business from the ground up.cannot guarantee to you that ALL of your employees will be retained for two years.
BigManu: We intend for you to stay and become a big part of our company. Conclusion By masking his real objective (giving himself two more years as president before retiring). Rich almost lost the deal. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. you’ll have a guaranteed “in” to protect your people. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Let me get back to you. to tell you the truth. 20 50 Practical Negotiation Tactics . This wouldn’t have anything to do with your own plans for the future. I certainly want to do all I can until then to protect my people. Surely you’ll be able to “protect” your people if they are as good as you say. would it? Rick: Well. I’m hoping to retire in two years. Rick: Well. that might work. but we won’t be completely tied to operations as they are now.
girls. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah.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.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. the frog is everybody’s favorite. (Think of the showroom tactics used by car dealers. they control the breaks and environmental factors. (thirty minutes later) Bailey: So. I like the frog. 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. and so on. such as a hotel conference room. too. Mother: Hush. they have the information they need at their fingertips. it’s a deal. Bailey: Cybil: Preparation 21 . Cybil. Make up your minds. 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.) Let’s take all our Beanie Babies to my house to trade! Okay. and go play somewhere! Cybil: Well … Okay.
22 50 Practical Negotiation Tactics . After forty hours of negotiating. not one member of Team A was chosen to return to the table. Team A agreed to change the meeting place. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. was still going strong. meals. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. The firm deadline was only four days away.” The chief negotiator for Team B agreed. until we have a settlement. and other conveniences in the adjoining room. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. About thirty-six hours later. although only ten years old. Team A was whipped physically and emotionally. in their own familiar setting. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. They were blamed for accepting the same deal that had been rejected only days earlier. The physical and emotional demands of 24-hour. non-stop negotiations wore down the members of Team A. Both sides desperately needed to settle a property dispute. That’s why she wanted to go to her house.Conclusion Bailey. around the clock. When negotiations resumed in two months over another piece of property. while members of Team B were able to stay fresh. Team B. as long as they met in the boardroom of Team B. Team B had clearly used its home turf to gain a substantial advantage. Team A agreed to a settlement almost identical to the one rejected days before. having set up beds.
it became clear that all of those pipes had to be pulled and new ones put in. Larry had expected to pay him for his time. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. I would have charged anyone else much more. Larry was thrilled. Will is a licensed plumber. I did get some estimates from plumbers. After all. This uncomfortable negotiation followed: Larry: Will. Let’s get the guys back in who gave you estimates. and he and Larry have always gotten along. but was shocked at the amount of the bill. I gave you my “family” rate. rather than give them the “advantage. If they tell us that they either Preparation 23 . If you think that the other party knows more than you do. you are likely to resent them for it and hold out. about your bill. I was kind of surprised at how high it was.” This can hold up an agreement and cost you in the end. Believe me. and they were much lower than this. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. based on objective criteria (think property appraisals in real estate). I anticipated much less work. and show them the actual work that got done.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. Larry: Well. When we got into it. Things turned sour. though. It was twice as high as the estimates Larry received from other plumbers before they started the project. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. Will: Larry. when Will presented Larry with his bill. Larry: But Will. When you first told me about your project. Larry: Just make sure you’re comparing apples to apples.
I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. Larry: That sounds fair. He was disappointed in the performance of the fund. The college’s budget officer was understandably offended. I’ll revise my bill to meet the lowest estimate you get. The estimates would have been higher than what cousin Will charged. Example 2 After Stuart was appointed to the college’s Board of Trustees. Budget Officer: I don’t know what your problem is. and no one had ever questioned her performance. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . I certainly didn’t mean to offend you. Comparing the estimates to Will’s actual costs would have been counterproductive. she had been investing the college’s endowment funds for many years. they had to agree that their early estimates were low. he used his financial expertise to analyze the investments of the college’s endowment fund. The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. 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. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options.disagree on the need for that work or that they would have done it for less. they said. Had they actually prepared bids on the work. Conclusion When the other plumbers looked at the work. while she wasn’t an expert. From a look at the portfolio. because (as Will pointed out) it wasn’t an apples-to-apples comparison. they would have had to revise the figures.
and its resources are limited. I have a suggestion. I find that a more aggressive investment strategy produces a better return. the college is a private institution. but some of these stocks have really lost their value. Now. Budget Officer: Yes. Stuart: Yes. then you and I can talk about changing our investment strategy. but I want to be involved in the discussions with them about what we’re asking. I don’t want you directing how they’re going to go. Okay? Budget Officer: Okay. but I think they more than offset the gains.were stale. As you know. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. there might be increased risk and some expenses for commissions. 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. but such a strategy also increases risk and costs more money to administer. 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. At the end of two months. if both of them demonstrate a similar strategy and produce better results after expenses. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. Preparation 25 . but we can ask them to plan and cost out each move. 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. Stuart: No problem. considering commissions and all. In this situation.
if I give you an increase. Mother: That’s a large increase—and we just raised it last year! Shari: Well. Shari: Well. This strategy can build trust in the negotiation process itself. Mother: But your allowance is based on what you earn in your weekly chores. 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: I’m four years older than the next-oldest. not on what you want to spend. You can’t treat me the same! Mother: Well—so we’re talking about several issues. and ask the other party to add to the list. Example 1 Shari. baby-sit your sisters. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. what else can I do. It will cost me more than $10—about $35 per week. wash the cars. I need more money for clothes and CDs.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. your little sisters will want equal treatment. a sixteen-year-old who lives with her parents and three younger sisters. Once you both agree on the list of things to be negotiated. (3) more chores. has asked her mother for a $10/week increase in her allowance. (2) a later curfew. and for going out with my friends. not just an allowance increase! There is: (1) a $10 increase. cut the grass. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics .
Now it is time for each side to list their desired outcome for each item. but unlike your sisters. The union’s chief negotiator. which the other children would have requested as well.Shari: Right! Mother: So … I suggest no allowance increase. while your Dad and I go out. if you agree to our proposals on item #3 (the paid vacation schedule). item #11 (the clothing allowance). Now we have a package deal to propose … Preparation 27 . was avoided. while the mother won a Saturday house-cleaning and a night out each week. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. you get to stay out an hour later that night. Then a “win-win” solution could be determined. An allowance increase. Management agrees. Shari got the $10 she wanted and a later curfew. and item #23 (the wellness program voucher). Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. And if you clean the whole house on Saturday. The trading of items (where initial demands are discussed and agreed upon) begins. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. opens by proposing the list of items. I’ll pay you $10 to babysit every Wednesday night. since all of their items were included as requested. in the first session.
Conclusion In most labor negotiations. thus removing them from the discussion table. 28 50 Practical Negotiation Tactics . other trade-offs are proposed and agreed to until only a few items remain. the two sides will at this point sign and date the list of proposed items. Then negotiations can resume on the remaining 43 items.
I live a few blocks from here. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. 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. One day. which turned out to be only a few blocks from his own house. He stopped and knocked on the door. It was nice meeting you. and general circumstances under which negotiations take place can substantially impact the outcome. day. thanks. as he left the supermarket. he saw an elderly man get in his dream car and drive away. Prepare carefully.Tactic 6: Timing Is Everything The exact month. (For the next three years. on Briarwood Road.000? No. say. As the man got out of his car. $12. but money doesn’t mean anything to me at this point in my life … Well. I love this car—restored it myself. Not even for. That’s a generous offer. he noticed a FOR SALE sign in the yard. One day. my name is Bob Hillard. Bob followed the man home. just out of curiosity. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. and do your homework. Would you possibly be interested in selling it? No. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years.) Preparation 29 . Bob made it a point about once a month to go out of his way and drive by the man’s house. time of day.
Conclusion While Bob did not achieve his goal during his first negotiation effort. December 31st.000. Can I see it? Sure. for tax reasons. to seal the agreement at the courthouse? Sure. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. 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.m. Follow me. that’s a fair price. Example 2 It was Sunday. as a matter of fact. The board members had met twice before. Can you come back on Monday at 10:00 a. The partner organization. and the vote was a 6-6 tie each time. I can’t take it with me. I’ll see you on Monday. the proposal would die at midnight. A majority was needed to pass the partnership agreement. (after a careful inspection) It’s a very nice car! I’ll give you $12. had issued a deadline of December 31st. Well. resulted in another 6-6 30 50 Practical Negotiation Tactics . beyond which the project would have to be abandoned. A third vote at 3:00 p.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. Then it’s a deal? Yes. if a seventh vote could not be found by the pro-agreement side. and I promise to take good care of it.m. I’m moving to California to live with my daughter. so I guess I will be selling it.
For weeks. He planned for it accordingly. The measure passed 6–5 at 5:45 p. A member of the pro-project group quickly called for a vote after the leader gave a signal. during an hour break in the meeting. the project had been stalled by 6–6 votes.. and it worked. Then. 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 leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.. in the end.deadlock.m. Preparation 31 .m. and the meeting was adjourned.m.. a member of the anti-project group left the room. timing was everything. the pro-project leader told his members to filibuster until he gave a signal and called for another vote.. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage.m. At 5:30 p. as predicted. When the meeting resumed at 4:00 p. Both sides caucused: The leaders on each side met to negotiate a compromise. That effort failed.
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as well as their bargaining history and financial and political positions. A neutral. 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 . such as Tactic #19 (Make a First and Best Offer). If you prefer to take a firm and direct approach. Third parties sometimes have their own hidden agendas. a third party can serve as a mediator (a legislative body. For example. The overall strategy chosen does not limit the use of other tactics. such as actively trying to keep one of the two parties from winning a contract or influencing a colleague or spouse to accept an offer for personal reasons. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. 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.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. if you want to begin in a friendly. Some of the tactics listed in this book are only suitable for single-session negotiations. but in practice it will likely influence the whole process. cooperative manner. for example. Tactic #43 (Nickel and Diming). or one-time-only. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. decide whether the negotiations should be continuous. Are there any outside people who might influence the process. Before you can do this. uncaring approach (Tactic #9: Control Your Emotions. such as a third-party negotiator. and Tactic #48 (Walk Away). Identify all outside influences and hidden agendas before you develop your strategy. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). Tactic #12: Find Common Interests can be helpful. In some cases. might step in and help settle negotiations between a union and administration negotiators. Tactic #33 (Bluff). Be sure you are aware of this at the beginning. such as a buyer and a seller or a city and its union. as it can substantially alter the negotiations between two primary parties. After you have evaluated these factors. you must first evaluate your needs and those of your opponent.
If there is a significant weakness in your position. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). 34 50 Practical Negotiation Tactics . and the buyer was able to completely renovate the house and still have a great deal. half-serious. Weeks later.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. but the inside was a complete turnoff. The agent explained that the seller was desperate. The buyer said he wasn’t interested. By assuming opposing roles. two people on the team will be more successful because they evoke different emotions from the other side. I offer half the asking price. 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. 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).” The agent took the offer to the seller. the seller’s agent called the buyer about the property. The buyer loved the location. The desperate owner agreed. His teenage sons had “trashed” the house. “Please make any offer—they are motivated!” The buyer responded. with “All right. For example.
We also think that the neighborhood has improved over the last few years. but the house has increased in value. Carol wants $160. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. but the redecorating is of little value.000. Buyer: The air conditioning might have increased the value of the house. but quite frankly. You are not likely to get more than you request. The market hasn’t gone up that much in six years. Surely there’s some flexibility in your asking price. If you consider the demand ridiculous. Carol: Maybe not. but we simply can’t take less than $160. your request must not be so low that the other party concludes that you are not negotiating in good faith. Carol: We really want to sell. one buyer shows some interest. Each time. but certainly not exceptional in any way. and then look at the demand from your opponent’s perspective. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Anyone buying the house would want to change wall colors or add new carpets.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. six years ago you bought it for $60. Example 1 Carol has been unhappy with the house she and her husband bought six years ago.000. and just refuses to reduce it. Buyer: We really like the house. She has had it on and off the market for the last five years. it is likely that your opponent will. Be realistic.000 is very high. However. After all. Your demand should be high enough to give you room to compromise. but not so high as to end the negotiations before they begin. so think this through well ahead of time. And I don’t see a lot of difference in the neighborhood. It’s a good neighborhood. First. Planning a Strategy 35 . Finally. so do not underestimate what you might be able to achieve. as well.000. with no success. we think $160.
000 offer by coming down in price at least a little. The other law firm was prepared to pay $100. 36 50 Practical Negotiation Tactics . Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. or she has unreal expectations. the founders of the firm. Carol drove off a potential buyer by setting an asking price that was just too high.000. Neither Edward Bits nor Edmund Bites. In any event. the buyer took it as a signal that either Carol didn’t want to sell. we are certainly interested in your request to “buy” our firm name to use in your city. enjoying a statewide reputation for quality representation. When Carol refused to budge. Inquiries to other law firms were not very helpful because in almost all of the instances. The partners are interested in selling the name.000 immediately.000? Carol: We really can’t take less than $160. but they have no idea what the value of their firm’s name might be in this nearby city.Buyer: What if we offered you $100. We’re curious. as to how you think the name is going to benefit you. Here’s how the initial negotiations went: Partners: Well. though. Example 2 The law firm of Bits & Bites was a Sioux City institution. were still alive. and then $10. 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. 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. 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.
one of these two attorneys carries the surname of the firm they are leaving. So. And we. we reserve the right to withdraw our permission. In every instance. Well. And even though you don’t have an office in our city. I’m kind of embarrassed now. (surprised) Well. it would be impossible to create a new name out of the names of our key partners. that is a very high number. To offer it now would be an insult. If at any time we feel that you have “harmed” our name. you have a very solid reputation there. Yes. of course. that you anticipate to build a very profitable law firm. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . We should assume. I really don’t feel comfortable doing that now. Thanks so much for meeting with me. (concerned about loosing the opportunity) Wait. and then 10% of your profits each year for as long as you use the name. Using the Bits & Bites name can only enhance our profitability. I guess this is just not something we’ll be able to pursue. Let’s just pretend this didn’t happen. What number were you thinking about? Well.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. then. because we were not even close to that number. We probably won’t be insulted. Give us some range.000 initially. that’s just our initial figure. because you are in the state capital and your firm has handled a lot of high-profile political cases. We weren’t really thinking about that amount of money. but we get to keep all of the money we’ve received up to that point. expect to pay for that. we want $500. starting with the ten partners you describe. we do.
In this situation. Both parties were probably at a disadvantage. since they had initiated the contact. 38 50 Practical Negotiation Tactics . It immediately dropped the idea. Bits and Bites should have let the prospective firm make the first offer.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. rather than negotiate. Either side could have asked for too much. because there was no “objective” criteria available to help them set a reasonable price. The price they were willing to pay would have indicated what the naming rights were worth.
Example 1 So. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. Half what it cost us new. we won’t need it at the new condo.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. They cost about $300. I’ll go home and you can call me if you two can reach an agreement. Andy and Paula: Yes. Andy and Paula. Peggy: Planning a Strategy 39 . Peggy. And take the leaf-catcher attachment and the gas can. Peggy: That’s fair. I heard that you want to sell your riding mower. since they are sitting out in the driveway with it. I want to keep those.200. Andy: No. Andy: I want them… Paula: Go ahead and take them. etc. Paula: Go ahead and ride it home. only three years ago. (bad guy) and implies that his or her side will hold firm on their demands. so I’ll take it. Peggy: I’m hearing one thing from Paula and another from Andy. Peggy: So. Andy: No. threatening. I can use them. and I know how you take care of things.400 if the catcher and can are included.200! We should get $1. not for $1. angry. while another acts difficult. what’s your price? Andy: $1. Peggy: I assumed they went with the mower. I don’t know what the deal is now. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. you’re really moving! I hate to see you leave.
and your training programs. You are located outside our primary service area. Liz: But we still want to renew your contract.000 per month is one of the highest in town.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. And we need to add a clause that holds your company responsible for machine damages. Sandy. For the past three years. we’re here to negotiate a new service agreement. Miguel: I’ve figured $4. Sandy: What? First of all. Let’s talk.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down.000 in service calls last year alone because your damn people don’t take care of the equipment. 40 50 Practical Negotiation Tactics . perhaps even unintentionally. Miguel: Well. your rate of $3. the quality of the technicians’ work. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). She very wisely recognized the routine and forced Andy and Paula to give her a clear. She realized that it put her in an impossible negotiating position. causing our reps to spend hours on the road. your account has taken too much time. Miguel: But not at this ridiculous rate. firm offer if they decided to continue negotiations. And cut the training hours from 55 to 20. We estimated that it has cost us more than $50. Sandy. we’ve been fairly happy with your responsiveness. And we want to change the 24-hour service response time to 48 hours.
Miguel! We’ve worked out a deal I think you can live with. I hope you can meet my terms. I’ll stop back about 2:00 p. Sandy. even though it was far above the previous contract. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. If not.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Any luck. Sandy.m. Liz. you two? Good news. I’m going on to lunch. with a position he knew was unreasonable. (Three hours later) I’m back. I’m afraid our relationship is over. Sandy. these terms will put me out of business—I’m a small 20-person operation. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Our customer base has grown. I’ll explain on the way back to the office. Planning a Strategy 41 . I want to keep you as a customer. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. but Miguel’s right.
He had. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. He decided that the best approach was to act indignant when he spoke to the company representative. This will put you at a distinct disadvantage from this point on.00 a minute. such as deals on computer packages and phone services. but I recently was sold a $. I noticed this. 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. How may I help you? Hello. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer.Tactic 9: Control Your Emotions Stay cool. 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. So. he was very unhappy.10 a minute rate at my office location. It seems that the rate you are charging me on my home phone is $1. 42 50 Practical Negotiation Tactics . because we have had a sick relative out of town and we used long distance a lot this past month. made some very good purchase decisions for his small business. and might even harden your opponent into an unfavorable position (for you or for both of you). 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. The fault was partly his because he did not stay on top of changes. in fact. 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.
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. to begin now.I expected the bill to be higher than usual. I realize that that might be the rate I started paying when I first took your service over eight years ago. Had you brought this to our attention before. of course it is not always possible to give existing customers some of the “offers” we have out. I would think you would have given me the best rate you offer new customers. I would have known I was paying too much. we certainly would have discussed your options. 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 I am able to offer you a $. But as a very good customer of yours. (beginning to sound irritated. It hasn’t been increased at any time. and I also realize that if I had examined my bill closely. Well. how would anyone who might only have residential service even know to ask? Well. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . Mike. but this was quite a shock.10 per minute rate on your long-distance service.
don’t think this is directed at you personally. In doing so. Wait—I’ll get my supervisor.10 per minute.Mike: I would imagine so. but I am very angry with Over-the-Air Company. between controlled. and I should be treated with more respect! I’m sorry. We certainly don’t want to lose you as a customer. But I’m looking at a $500 longdistance bill. I … (interrupting and in a stern. she kept Mike as a residential customer as well as a business customer. a long-time customer of your company. The best we can do is fix the rate for the future. He was walking a thin line. I am. but I can’t do that. I would hope that you would credit my account for this better rate for past service. after all. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. which should rightly be $50. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. however. there’s no reason for this conversation to continue. The latter would not have produced the desired results. strategic anger and abusive behavior. either. 44 50 Practical Negotiation Tactics . and I want to speak to someone in authority so I can terminate my service. controlled voice) I need to talk to someone who can do it immediately. If you can’t get me someone to talk to. Mike’s willingness to show a measured “flare of temper” brought results. (with a much angrier tone) Madam.
Working with fireworks is working with explosives. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Owner: Now. 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. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. and that they should be asking for a fairer base wage for the work they do for you. and you just can’t be too careful. The owner told the employees that he was worried that during the overtime shifts. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. they would become dissatisfied with their pay and want their base pay increased. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. They will be putting the plant AND their fellow workers at risk by not being here. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. On those overtime shifts.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. and it’s getting old. that’s just not fair. and it’s not what we’re even talking about. I’ve got to have the employees with the most experience to protect this place. lesssenior employees might be at greater risk of injury because they have to handle explosives.
) Now.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. 46 50 Practical Negotiation Tactics . The negotiator was also running a risk with his flare of temper. now. or they’re not. No one who takes a job with us can be unaware of that. the negotiator would have had to find a way back into the negotiations without losing ground. or they’re not. But the fireworks business is a business that involves risk. But we protect our people. That’s all. Sit down. The safety of the plant demands it! (standing up to leave) This is just ridiculous. What if we were to agree that the senior employees could refuse half of the overtime offered to them. but not all? Conclusion The owner was on shaky ground with this one. After the employees’ negotiator threatened to walk out. Either they are properly protected. In practice. (He begins to walk out. most of them continued to take all the overtime they could get. either the employees are properly trained. Until you’re ready to talk about that. not at all. You are not addressing the real issue for you: money. though. I’m not coming back. All I’m saying is that the most-senior employees have to be on the overtime shifts. Then you can’t have it both ways. sit down. he became more reasonable. don’t be so hasty. Had the owner let him leave. The end result was that the most-senior employees did win the right to refuse overtime.
2) They can flip a coin. All the rest of the estate has been divided among the family. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. The first party decides on a price for which he or she will either buy or sell the object to the second party. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. a well-known negotiations professor from Harvard University. Then Susan. you’re the oldest.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. the executor of the estate.” is the recommendation of Howard Raiffa. so you set a price at which you agree to buy or sell the coffee grinder. Mike. Mike: Mary Anne. called the “Reciprocal Buy-Sell Offer. Planning a Strategy 47 . (two days later) Mary Anne: Well. and split the proceeds. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. Both sisters covet it. 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. The second party then decides to either buy it at that price and pay the first party. I’ll give you 48 hours to decide the price. Susan. 3) They can agree to sell the object to a third party. A fourth option. However. I’m willing to pay or let it go for $800. with the highest bidder paying the amount to the other side in compensation for their loss. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). since this one is in perfect shape and it was Mother’s. with winner taking all.
They accepted his suggestion to use the “reciprocal buy-sell strategy. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. I suggest a slight modification to the process. They thus were able to determine the highest price each was willing to pay for it or receive for it. Both sisters felt that the process enabled them to resolve the issue fairly. You will both agree.” Howard: Since in this case you are talking about a multi-million-dollar business. Thanks for making this last step as easy as possible. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. Both came to Raiffa to help negotiate a settlement. to submit a sealed offer to buy/sell the business sixty days from today. After I open the bids. (sixty days later) 48 50 Practical Negotiation Tactics . which will bind us to the outcome. I’ll pick it up tonight. Two business partners had been working together for ten years to build a successful business. I choose to buy it. and then decide how much more “emotional value” it held. in writing. Here is my check for $800. Lectures on Negotiation Analysis. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process.Susan: Mike: Well. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). the lower bidder must agree to sell his half-interest to the higher bidder at a price that evenly splits the difference between the two bids.
I will arrange to sell him my half-interest for $180 million. and both men had carefully estimated the market value of half the business. and to close within ninety days. And I will arrange financing to pay you $180 million to become sole owner. but only if they could become the sole owner. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. Bobby. you agree to sell your half-interest to Bobby for $180 million. your bid is $170 million. Bobby was willing to pay more than Abe to remain sole owner. 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. Planning a Strategy 49 .Howard: Abe: Bobby: Abe. Abe. Agreed. your bid is $190 million. and we close by July 1st.
They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. and the husband felt like he saved them hundreds of dollars. he decided upon a strategy: First establish himself as the “dimension expert.” but there were substantial differences in price—differences that the wife did not see as a problem. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. Looking at these statistics. Based on seating capacity. The husband found the dimensions of the couches in the brochures and Web sites. He thus ended up having greater negotiating power. the one that was the most expensive was superior. the one he wanted (one of the least-expensive) was superior.” and then argue for the frugal alternative. When it came to comfort. she glanced at it and immediately deferred to his opinion. The couple decided to limit their selection to those rated “excellent. and created a spreadsheet to compare the five best-rated couches on their list. This strategy worked. and forcing him or her to control the discussion of the issue. When he showed his wife the detailed spreadsheet. They both expressed an interest in finding a couch that offered the most “interior” space. It can also work in reverse: establishing the other person as the expert. Conclusion The husband became the “expert” in this situation by doing the homework. This approach can also be reversed: The wife in this situation is a banker. so when the husband wants them to make an 50 50 Practical Negotiation Tactics .
and Point of Service (POS) plans. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. you gain an edge when negotiating a new plan for your company. 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 . Preferred Provider Organizations (PPOs). and should therefore handle the problem.investment decision or deal with an error in a bill. he argues that she is the expert. 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.” If you spend many hours learning about Health Maintenance Organizations (HMOs).
Example 1 When Russ and Bill got home from school. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. you want to reach an agreement that is favorable to an outside party. the last piece of cake will get thrown away. The boys quickly huddled. because I am so conscientious about my paper route. They immediately began to fight over it. she decided to try something different. and their mother was tired of it. point them out at the very beginning of negotiations and refer to them throughout the process. I wouldn’t care so much. This time. When they boys returned. here’s what they said to her: I think I should be rewarded with the piece of cake. they saw that there was one piece of cake left over from their mom’s bridge party. and I really love the banana/butternut/ sour cream frosting on this cake. and so on. The two boys fought over the last piece of everything. Be clear on what you have in common at the start. neither of you want to be embarrassed at the outcome. That simply rewards your continual squabbling. Russ: 52 50 Practical Negotiation Tactics . you both want to complete negotiations by a certain date. Unless you can convince me otherwise. and then asked their mom for a chance to negotiate with each other. particularly when things seem to be at a standstill. Usually.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. If this was chocolate icing. she made them share whatever it was. like we usually have. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. I also took out the garbage last week without being asked twice. and neither boy was very happy. I missed dessert the other night because I had to get to baseball practice. These positive things are part of your goals and objectives.
Marilyn originally set her shop’s hours for 10:00 a. and her children were in school. Residents: Marilyn. It was the type of shop the nearby residents preferred. I helped with the bags without being asked twice. Customers have started to park in nearby apartment lots. Conclusion Once the boys realized that they had a common interest—not letting the cake get thrown away—they were able to negotiate a solution both of them could live with.m. The last cake we had was chocolate cake. and that’s not my favorite either. she opens her shop at 7:30 a.m. and better than a fast-food restaurant with late-night hours and a drive-through window. so that your customers can park on the street. This cake is white cake. to 3:00 p. she got a visit from some of the residents. your new shop hours have caused your customers to park in our parking spaces. Planning a Strategy 53 .m. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. I can have the part with the icing and Bill can have the part with the cake and filling. so these hours worked out well.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. Now that her children are in college. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. because there is no parking along the street during morning and evening rush hours. We realized that if we cut the cake lengthwise. and keeps it open longer so she can attract customers on their way to and from work. That sounds like a wonderful solution. and I really like white cake. We really want you to go back to your original times. One day.
. and 9:00 a. Okay.m. and the residents needed Marilyn’s shop. We think they’ll be agreeable to the morning parking. I have to convince them to come before work.I’m sorry this is happening.m. the off-street lots probably won’t be used by my customers. and I close at 4:00 p. then we’ll try and accommodate you.m. and 6:00 p. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a.m.m. And we don’t think you want your customers’ cars towed. Lets try it. let’s see what the options are. I really need that extra income to stay in business. Do you? Marilyn: No. rather than after work. Identifying their shared interests caused the nearby residents and the customers to reach agreement.m. Can’t you post signs that tell non-residents not to park in the lots? Residents: The problem is that for the signs to be very effective. and see if it works. if I go ahead and open the shop at 7:30 a. So.m. The parking lot used for apartment residents is probably full from 7:30– 9. Most of our residents are gone by 8:00 a. and between 4:00 p. I don’t think that would be very good for business. or so anyway. if residents haven’t left for work yet. 54 50 Practical Negotiation Tactics . But I really am increasing my sales by being open longer hours.m.m.m. and usually the car is gone by the time a tow truck shows up anyway..? Residents: We certainly want you to stay in business here. It is very costly to have cars towed. But in order to keep my new customers. and 9:00 a. and is probably empty in the afternoon if they haven’t gotten home yet. Between 7:30 a.00 a. The shared parking arrangement did work out for Marilyn. Marilyn: Conclusion Marilyn needed the extra parking.. my customers can’t park on the street. If you need to have the shop open more hours. we have to be willing to tow the cars that violate it.
etc. let’s all take two hours to look around and make a list of things we might want. Example 1 Four adult children have gathered at the home of their recently deceased mother.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. How can I do that? You all live in this town and you know this house. Then we can sit down at this table at 3:00 p. A few hours? I can’t—I’ve got to leave shortly for the drive home. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. the first. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests). We just don’t have the time … We’ve got to do this—the house is sold! Okay. But at Planning a Strategy 55 . Well. That will take days! I haven’t been in this house for twelve years. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. and start choosing things. A deadline can help you make the best possible agreement in the shortest amount of time. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. Well.m. 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. one at a time: the youngest. we can each take turns selecting things … Like each tool or dish. I don’t. let’s all take a few hours to look around. how should we go about dividing up the furniture and possessions? I can’t talk about it.
we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. However. 56 50 Practical Negotiation Tactics . And besides. Example 2 Allan: As the negotiating team for the city.. Allan: Let me confer with the city attorneys. we all leave. David: I understand your concern. your attorneys know the tax laws. December 31. Agreed. if I cannot carry a negotiated and signed deal to my board by noon on December 31. being the oldest.m. and I appreciate your interest in the historic structure. All of us must come back before Saturday to take what is ours—agreed? Okay. can sell or give away what is left. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. Sue.Sue: Mary: Jenny: 5:00 p. this is December 29. Okay. if we are not finished.
Conclusion Knowing the external deadline gave David a significant negotiating edge. Obviously. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Let’s continue. we can’t get the reports we wanted in 48 hours. Planning a Strategy 57 .Allan: (One hour later. and I don’t like it.) I understand the December 31 deadline.
Did you buy it? Jason: Yes. Now. and one of the ways to do that is to reveal a weakness at the beginning. and Jason knows he is getting a D in Spanish. But don’t lose it again. before your opponent tries to catch you off-guard. and this usually means having all the right information. Control the use of the information. He decided to preempt the discussion in order to make the best deal. and you can neutralize its effect on the negotiations. Have a clear goal in mind AND all the information you need to make your points. Mom: I gave you money to buy a workbook a few weeks ago. but remember that both sides have weaknesses. Unfortunately. I’ll need to buy it again. first-quarter grades are coming out at the end of the week. but I have a problem in my Spanish class. so he was able to prevail upon her to let him continue. and we used it a couple of times. but that was actually a different workbook.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. His mother disapproves of his study habits. we need to talk. while watching TV. We had one at the beginning of the semester that we were using pretty often. Then the teacher went back to the first one. as well as those of the other side. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. Mom: All right. as well as strengths. and I missed some assignments. The objective is to negotiate from a position of strength. Jason: Mom. I’ll give you money for it. Mom: What’s that? Jason: A few weeks ago I lost my workbook. He knows that a D will mean that he will have to change the way he studies. but his grades are good. 58 50 Practical Negotiation Tactics . don’t get mad. One day mine disappeared. I bought the second one. There will be times during a negotiation when you will want to catch your opponent off-guard.
he was able to continue to study the way he wanted to. Example 2 Jane once owned a piece of property she wanted very much to sell. Environmental Science. It’s because I didn’t have the book. Although his Spanish grade was only a C+. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. Obviously. Thanks. but all three deals Planning a Strategy 59 . And those are hard classes—Algebra. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. or borderline B. my study habits are okay. I think I can do that. but I think you do need to change your study habits.Jason: Another thing. The work I did turn in was fine. and the D is directly related to my losing the book. Mom: Well. Its owners found out that at least three other buyers had been in contact with Jane. And I know I have to be better about getting in all of my assignments. The location was ideal for a convenience store or a fast-food restaurant. If I don’t pull the D up to a C or better. Mom: Well. she trusted it more. His explanation made sense. B. Conclusion All of Jason’s grades did improve over the next quarter. I’m sorry. and since he offered her the information up front. all right. English. so there’s no reason to think I need to change my study habits. I’ll give you more time. I don’t think you’re taking your schoolwork seriously enough. Mom. then I’ll agree to make changes. Jason: Spanish is just one class. Pizza Boy was interested and had even made inquiries about the property. 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.(maybe C+). But that Spanish grade needs to come up to a B!! Jason: Okay. Since I missed some assignments. All of my other classes are A.
it’s only the neighbor to the right of the property who has a problem. and was able to politely ignore her.had fallen through. What are her grounds for complaining? Jane: She doesn’t have any. since they were well aware of the negatives. When the neighbor heard about the new buyer. Pizza Boy: Well. really. Pizza Boy: We’ve checked the property out. You are a big enough corporation to withstand her objections. Furthermore. They decided not to fight a disgruntled neighbor. however. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. I know. she started her campaign to keep them from closing the deal. which was way below the price they were actually willing to pay. we’re not interested in neighborhood fights. I’m very happy you’re interested in my property. Pizza Boy was prepared for her call. When she contacts you. But unlike your company. 60 50 Practical Negotiation Tactics . The real problem. let’s assume that you are right. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. and it’s zoned for commercial use. the other interested buyers already have businesses in the neighborhood. A tentative deal was signed. there were no unpleasant surprises to stop the deal. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. Jane: Oh. Actually. This is how the negotiations went: Jane: Pizza Boy. Pizza Boy: Well. however. though. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. I’m sure. either. I think you’ll find that this is only one person. What are you asking for the property? Conclusion Jane told them her asking price. she will want you to think it’s the whole neighborhood.
The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. This is a practical starting point that will not anger the other side (and might even be expected). The negotiator firmly states that it is their best offer in an attempt to gain a nice. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. by Michael R. 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.000 22 23 24 25 26 27 Initial Offer $28.500) Fig.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.500) M $21. for example. as illustrated in the following figure: Seller Resistance Point ($22. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000) Settlement Range ($22. 2: Distributive Bargaining Process.000) Target Point ($23.750–$25. Adapted from Labor Relations and Collective Bargaining. quick agreement. 190–192.500) Resistance Point ($25. None is as important as the first one. Carrell and Christina Heavrin. Another common strategy is to start with the status quo. such as proposing to continue at the current rate or price. Exchanging Initial Offers 61 . 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 Buyer Initial Offer ($21.750) Target Point ($24. (2004). 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. “Distributive” bargaining (“win-lose” or “zero sum”) is used.
62 50 Practical Negotiation Tactics . The settlement range is the distance between the resistance points. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. and is the range in which most negotiations actually occur. 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.In this example. You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. the other side does not agree to this value). Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. usually. In the example. After initial offers are exchanged.” but the settlement price. each initial offer ($21. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing.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). thus starting out on a positive note. 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). if the buyer’s initial offer was $25. the process quickly narrows to the range between the initial offers.000 and $28. these points have set the outer limits. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). When the two parties agree to a price within the range.000) is reasonable. 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. it is termed the settlement point – not the “right price” or “fair price. thus producing a true “win-win” negotiation. See Tactic #18: Agree on Something As Soon As You Can. A target point is the desired settlement value a party has set as a goal when negotiations begin.
Shelly: Twenty friends? You’re kidding! I’ve just started on my list. You can invite up to 20 of your friends. so we’ll have the party from 7:00 p. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. Unfortunately. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. If the team is feeling pressure to concede on certain items. We’ll just have chips and soda. because it might disturb the neighbors. and I already have 25 names. and presumably had an agreement. There are many ways to use this strategy.m.m. so her parents sat down with their daughter to discuss the details. Example 1 Shelly’s “Sweet Sixteen” party was coming up. Her mom and dad had already talked about it privately. If the negotiations are heated. or if a member takes on a role in the negotiations that has not been assigned to them. a caucus can be used as a break to calm the situation down. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. Shelly. Mom: We’re planning on having your party here on Saturday night. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. the negotiations got out of hand when Shelly’s dad forgot what had been decided. it gives the parties an opportunity to reassess where they are and determine if everyone involved agrees that they should be heading in this direction. We don’t want it to be a late evening. call a caucus so both sides can brainstorm new solutions to keep the negotiations going.–10:00 p. make use of the opportunity to call for a caucus. If the negotiations have suddenly gone in an unanticipated direction. A caucus gives you an opportunity to work out problems with your own team in private.Tactic 15: Caucus If you are part of a negotiating team. If negotiations seem stalled. without revealing their ideas to the other side.
I’m sure we can ask them to tone it down a little. (excited) That would be so cool. I think we can handle a few more kids—how about 35? And midnight sounds okay. Shelly. Your dad and I already talked about this and agreed that 20 guests would be the limit. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. And midnight is definitely too late. Mom! This is my “Sweet Sixteen” party. We’ll get a band—everyone does. okay. Time out! Dad.Dad: Mom: Dad: Shelly: Mom: Shelly: Mom: Shelly: Dad: Mom: Dad: Shelly: Dad: Mom: on the friends I’ve made over the summer at the pool. That sounds like too many for here at the house. alone. We could play records and you guys could dance. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . Oh. In fact. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. we could rent the VFW hall. we need to talk. Jerry from down the street is in a really good band that all of the crowd likes. Actually. we’ll call you when we’re ready.m. It’s special!!! Well. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. That would be great! It would keep everyone entertained. (with some irritation) I’m not sure. (During the caucus. I think the band would be fine.” They would never expect a party to end before midnight. And they can’t go home at 10:00 p. and then the number of kids won’t matter.—that’s so “baby. I guess the VFW will work. Dad.
and not a huge production. All right. her mom presented the revised proposal. to 11:00 p. we will be better able to chaperone. That’s so lame. and you can invite more friends. Your mom and I agree—11:00 p.) Okay. Agreed. is for little kids!! No. A DJ? I guess that’s okay. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. but no Sweet Sixteen birthday party decorations. we’re going to rent the VFW hall.m. midnight. When they called Shelly back in. and we will need to approve the list. Dad. but we’ll schedule the party for 8:00 p. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 .m. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. sorry. But we can have the band. That way. Does that mean no presents. please!! 11:00 p. can’t we? No band. Example 2 The contract negotiations between the company and the union had been going on for days.m. But you are limited to 40.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. but your dad and I agree on getting a DJ to play. Okay. And we’re serving chips and sodas. causing them to lose control and make compromises they hadn’t intended to make. too? No way!! I want presents!! Conclusion In spite of their prior planning. this mom-and-dad negotiating team became unglued during the negotiations.m.
many will want to use it for their children’s education. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. it’s a good proposal. The union’s lead negotiator misunderstood the proposal. 66 50 Practical Negotiation Tactics . What is this. and the following conversation occurred. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. With the cost of college educations so high. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. The tuition benefits will encourage the workers to be prepared for new job opportunities. Union negotiator #2: Please—just a moment outside. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. 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. Union: (angrily) I’m not presenting this proposal to my people. Tuition in place of health insurances? They’ll think I’ve lost my mind. The company’s negotiator didn’t recognize the misunderstanding. A lot of employees have spouses who can get health insurance coverage through their work.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.
Now. I think that what you’re proposing is a really good idea. and the parties were able to complete their negotiations. and I apologize for explaining it poorly. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. let’s move on. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. the parties returned to the room. Exchanging Initial Offers 67 . we’ll be back in 5 minutes.) I’m sorry. Good.Union: Union: Company: Okay. Negotiator #1 regained his footing. I thought that the contract would cover one or the other for everyone.
Salesman: Well. when the two sides are only a few dollars apart. you are making $200 profit over the true dealer’s cost. but … Salesman: But what? Hobbs: Well.” Party B thinks that A has sacrificed one important objective to gain another. He doesn’t really care about the color of the new vehicle. At a point late in the negotiations. I can go to another dealer and get a green exterior—the color I like best. Here’s how it works: Party A exchanges the item for something of true value. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . according to the Consumer Reports listing of the cost of the vehicle. but in reality. It is a useful tactic in any negotiations.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. However. according to my figures. but he makes a mental note to use color as a “throwaway” item. 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. Salesman: Let me talk to my manager. A has gained something of true value and given up nothing he values in return. Hobbs. you don’t want your opponent to know what these things are. this conversation takes place: Hobbs: Yes. Mr. we’ve got expenses and we need to make some profit.” Throwaway items are those things that hold little or no value to you. Example 1 The buyer. and noticed that none of the vehicles have a green exterior. so be sure you present them in a way that suggests importance. not revealing that the item exchanged is a “throwaway. quickly checked the dealer’s inventory of sport utility vehicles in stock. it’s a great car and a fair deal. I’ll go get him. But for this price. Hobbs: Yes. I know.
. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). The manager was convinced enough to sacrifice a final $100 for the throwaway.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. The three are sitting at a lunch table to discuss the schedule.. 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.. At the very end of the negotiations. All three employees must agree to the schedule. Miguel. I’ll take the red one for $100 less. Conclusion Mr. and seniority will be used to determine who gets to choose the first day. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. Employees will be paid time-and-a half for each of these days. Then we have a deal. Hobbs successfully chose color as a throwaway item. The days in question are: Exchanging Initial Offers 69 .no it’s not. 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. Example 2 The office supervisor told the three internal sales representatives (Jenny. 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 .
December 27. 70 50 Practical Negotiation Tactics . in exchange for giving up earlier choices due to seniority. They have decided to start over. 2 In the first round of negotiation. She proposes to work five days. They all agreed to their schedules. December 31 Miguel: November 25. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. 24. 26 Miguel: November 25. 27. She would actually prefer to work the extra days and get paid time-and-a half. and each chooses their days to work: Carolyn: December 27. This would allow Jenny and Miguel to each work only two days. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. She got what she wanted by giving up something she did not value: the two other days. 30. A second and third round produced the following allocation: Jenny: December 23. 31 January 1. if they let her choose the two days she will be off and the five days she will work. They agree. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. December 26. January 1 Carolyn: December 24.November 25 (the day after Thanksgiving) December 23. 31. 30. but that is a secondary consideration. January 1. each made a first choice of days they will work. 2 Jenny: December 23. December 30. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. January 2 None of the three are totally happy with the results. 26.
Example 1 When their mother died at age 82.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. and a collection of antique furniture. 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. A reluctance to include one particular financial item with other financial issues.000 with no mortgage on it. they met at the house. the antiques. along with the cash. it is often helpful to package the items in distinct groups and then deal with each package separately. for example. When the girls decided it was time to talk about the estate. but I’d like to talk about the house and the furniture. three ways. one might package all of the financial issues in one group and negotiate on that package as one issue. In addition. Autumn and Angela. Anne: As I see it. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. Anne and her sisters. The house and much of the furniture has been in the Exchanging Initial Offers 71 . and the stock and distribute the proceeds. 300 shares of stock in a pharmaceutical company. we need to sell the house.000. The estate’s assets included a checking and savings account totaling $450. their mom left specific pieces of jewelry and art in the will to each of the girls. 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. were faced with the task of selling the house and disposing of their mom’s personal belongings. a house valued at $250. can indicate that something you think is minor is really a major concern to your opponent. For example. realizing that the total cost of a deal might make or break the agreement.
we’d get a lot more for them. but the operative word is “give. it’s a magnet for vandals. I’d like to talk about the art works Mom left each of us. Angela: Now’s not a good time to sell either the stock or the house and antiques. It’s a buyer’s market now. 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. And we’ll fix the house up. and use it to fix the house up? Then when we make a decision. she’s free to do so. we will have a more valuable asset. don’t you think? Angela: Maybe. so I will be able to keep tabs on it. Why don’t we leave some of the cash in the bank. and if we wait a couple of years. we’ll discuss again what happens to the house and the antiques. Frankly. If Angela wants to hold on to her stock. There was a reason why she gave us what she did. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . we can sell ours. Angela: I live close by.000 in the bank and distribute the remainder three ways. Autumn: I think its awfully soon to be making these kinds of decisions.” She gave those things to us. we’re really free to do with them what we want. In fact. Mother was born here and grew up here. So we agree: We’ll leave $30. We’ll split the stock three ways. If we want. I’d really be interested in talking a trade for some of them. Autumn: Sounds good to me. Soon. What would you think about agreeing today to distribute the cash and stock three ways. and now that we have them. Anne: Okay. I’d like it all to stay in the family.family for years. and letting everything else wait for another discussion. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. With no one living here. Anne: But that means we have to continue to take care of the house and its contents.
funeral. what kind of paid leaves there will be (personal. but I’m making no commitment to trade. tuition benefits. vacation. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. The second: working conditions (work schedules and promotional opportunities). 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 the art works—will be more difficult. Several issues also needed to be addressed: the ability of employees to move up through the organization. and establishing a work schedule to accommodate evening and weekend clients. The negotiations on the other items—the house. The following tasks needed to be a accomplished: establishing basic pay schedules. etc.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. including benefits for partners in non-traditional relationships. May I suggest that we divide the items into three areas. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. and the assignment of the limited number of parking spaces. health benefits. Angela: That’s fine. deciding whether there would be annual wage increases as well as merit increases. the antiques. 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. Employees: We’ve got a lot of items to cover. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). The third: Ben- Exchanging Initial Offers 73 . sick.
Employees: I’m surprised that you would take merit increases out of a general discussion of wages. I think it also makes sense to include tuition benefits in the Working Conditions category. 74 50 Practical Negotiation Tactics . And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. I would include that under the Working Conditions category. and the parking spaces). Wages should not include merit pay raises. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. that makes sense. Also. tuition benefits. but the parties were able to come to agreement because the wage issue had been resolved. we are an agency supported generally by public funding. 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. as well. paid leave times. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. 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. Executive Director: I think it’s a good idea to group items together. the paid leave categories are pretty clearly defined. Executive Director: Sounds like a good agenda. So I’d like to see us get through the wage issues quickly and then move on. Employees: Okay. but I’d change your list. Let’s get started.efits (health insurance. Later negotiations were difficult. Executive Director: Well. because they’re really an incentive for better performance. to be honest with you.
and she agreed. Kathy borrowed more money to go to graduate school full-time. They have no children. rather than disposing of assets. no matter how insignificant. You signed those papers. They met and married in college. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. without suggesting any changes or modifications. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. It indicates to your opponent that you are a reasonable negotiator. The couple hoped to do the divorce without involving lawyers in order to save money. Kathy was asked by her employer to relocate to another city. Exchanging Initial Offers 75 . Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. after a brief marriage.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. Example 1 Tim and Kathy. Tim began working right after graduation. and both have good jobs. sets the stage for mutual respect and communication. You can also make an effort to agree on something your opponent offers early in the negotiations. The discussion might become very heated. 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. with her promotion sending her out of town. Now. too. Tim: You might be leaving town. Their “property division” was mostly about dividing their debts. Kathy’s first job paid more than Tim’s because she had a graduate degree. They had also furnished their house on credit. It was her idea to buy the house and go into debt to furnish it. and that you are entering into the negotiations with the intent to reach agreement. and might not even be able to keep the house. are divorcing. An initial agreement. They were in the middle of buying a house.
about the house and furnishings. I don’t intend to “stick” you with anything. ABC usually uses UPS 76 50 Practical Negotiation Tactics . a wholesale art dealer. They also agreed that Tim wouldn’t have to pay her that amount for five years. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. 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. 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. Tim: Well. Tim: Okay. What do you want to do about them? Conclusion Having agreed to two items very quickly. Frankly.Kathy: Hey. and he could pay it in annual installments over a five-year period. I think that makes sense.. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. Kathy: Now. hold on. I think it only fair that I take over repayment of all the school loans. I can hardly argue with that. as long as the cost was approximately the same. an art gallery. If both of us had been working the year I went to graduate school. and you got your sports car. I got my convertible. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. Kathy: I suppose we should look at the school loans next. as you remember. The monthly payments are about the same. and XYZ Co. Example 2 ABC Company. yes. we would have paid down our school loans more. Okay. The first thing I’d like to talk about is what we are going to do about the cars. When we bought them two years ago.
and arrived on time and apparently in good condition. let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. We’ll expect you to pay for the 12 works that will be in your show. but only if you let us ship it UPS. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. 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. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. or else the box was damaged in XYZ’s warehouse. However. it was obvious that the art in one of the boxes had suffered considerable water damage. ABC’s position was that the artwork was fine when it left their location. and began preparing to return all of the artwork to ABC. The artworks filled four boxes. XYZ: ABC: Exchanging Initial Offers 77 . XYZ contacted ABC immediately. and we will continue to discuss who is liable for the three water-damaged works.to ship artwork. when the boxes were opened on Monday. Unfortunately. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. ABC refused to pay WeCanShipArt until it received payment from XYZ. They arrived right before the holiday weekend began. XYZ decided to cancel the promotional sale that was to start on Wednesday. The other times this happened. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. ABC: Before we begin. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. and put the company on notice that it was not going to accept the order because the planned sale needed a dozen works of art to make it profitable. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. and the boxes showed no external damage. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city.
Having reached an amiable solution to the immediate problem. that’s okay with me if it’s okay with XYZ. Now. generated a like offer from WeCanShipArt and a reasonable response from XYZ. and if word gets out that you think it was.XYZ: Agreed. we’re ruined. WeCanShipArt: Wait a minute. They also agreed that if the investigations are not conclusive. You can’t just ignore us. ABC: Well. If we don’t make the deadline. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. at its financial risk. regardless of where the original three artworks were damaged. they will split the cost of the three damaged pieces three ways. And we’ll eat the cost of shipping. 78 50 Practical Negotiation Tactics . I can’t see how I can refuse that. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. The artwork was not damaged while in our control.m. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. XYZ: Okay. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ.
What do you want for it? Colleen: Well. Okay? No quibbling. The “first and best” tactic enabled them to settle the matter easily. Ann: Well. we plan on selling our Ford tractor when we move. I don’t have any idea. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. 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. I don’t want to quibble. Why don’t you give me a price? Colleen: Oh. I know you and Jeff said you’d like one because you have about five acres. we paid $5. and even more hours in the fall picking up leaves. and it came with the bush hog and the leaf pick-up. Jeff spends many hours mowing the yard every week. Exchanging Initial Offers 79 . no hard feelings either way.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. consider using the “First and Best” tactic. we’ll sell it to you.000 for it six years ago. 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. You must mean what you say and be prepared to walk away from an unacceptable offer. period. Ann: That sounds great! I don’t want this to affect our friendship. 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. Example 1 Colleen: Ann. but if you’re interested. Ann: Thanks! We really need one.
I’ll discuss it with my wife and get back to you in 48 hours. and I’ll take 48 hours to consider it. I came up with the best salary offer I can make. We want you. 80 50 Practical Negotiation Tactics . how about you making your first salary offer your best one. but I don’t want to start off in a new job by negotiating with my boss! So. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. and you know my current salary. (three days later) Vernon: Archie. I’ll get back to you in three days. except salary. as we agreed. but we have internal budget considerations and we must consider equity with other employees. Archie: Thanks. I expect a fair increase. He also started the job with a positive working relationship with Vernon. So.Example 2 Archie: Well. Here it is. I want the job. I’ll either accept it or reject it. no questions asked. I don’t like negotiating over salary either. on this slip of paper. who admired the way Archie negotiated his starting salary. I think we have agreed to all aspects of the job offer. Okay? Vernon: That sounds good. Conclusion Archie accepted the job offer.
and ignore or deny any weaknesses in it. He and his date had decided that as long as they could join their friends for breakfast after the prom. and then to breakfast at “Timothy’s. I’m the only junior in the crowd.m. and in a favorable light.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. and we’ve made a lot of plans with our friends that I need to talk to you about. look for indications from your opponent as to what he or she believes is their best position. Posturing is indeed “acting. 17 years old and a junior in high school. so he knew that he would have to sell them very quickly. so the prom is a pretty big deal to both of us. This is called posturing—presenting your position strongly and completely. but he figured “all night” was relative. Fourth. Second. then the prom. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. Sally’s Senior Prom is coming up. you know that Sally is really looking forward to this. a 4:00 a. First.m. Kevin had “negotiated” with his parents before. we’re not going to be dating exclusively after this summer. Kevin: Mom and Dad. was dating a senior. 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. He knew his parents would not agree to let him stay out all night. (Once negotiations get underway. 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. Third. curfew would be okay.) During the posturing phase. It might be your only opportunity to explain your position without interruption. we’re all meeting at Donna’s so we can share a limousine. Exchanging Initial Offers 81 .” As you know. since Sally is going away to college next year. First we’re going to dinner.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. Present your position and demands as if yours is the only logical position. Example 1 Kevin.
and we’re just not happy about that.m. We are. you and Sally need to call it a night (or really a morning). From where we sit. Second. yes. Sally’s parents trust us and have already said yes to her. of course. we told you that we would not be changing our rules to accommodate that older group. for sure. so there will be plenty of chaperoning. we know.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. but because the owner’s daughter goes to Sally’s school. We think that after the breakfast. I’ve never missed my curfew. they will be open for the Prom crowd only. but it should not be oversold. you have been fairly good about making your curfew—most of the time. Donna’s parents will be there. We’re just not convinced that your entire group has been alcohol. and the crowd we hang with doesn’t either. You make some good points. we’ll have to get in our car and drive home very early in the morning. Finally. Things can happen on a night like that that adversely affect you for the rest of your life. 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. We’ve heard that they allow kids to drink. Yes. I know you trust me and that I’ve earned the trust. 82 50 Practical Negotiation Tactics . Also.or drug-free. You realize that this could be as late as 4:00 a. That’s asking us to believe a lot. but to use that as a reason to stay overnight doesn’t make sense. So. Fifth. which could be dangerous. happy about your plans to use a limousine so you kids aren’t driving. That’s the deal then? Okay. Donna’s parents are not as strict as they could be when a bunch of you are there. I think I ought to be able to stay out all night. the limousine will take us back to Donna’s house to spend the night. I don’t drink or do drugs. And if we don’t spend the night. And. remember that when you started dating Sally and hanging out with an older crowd. However. I believe you can pay a little more and have the limousine bring you both home. this prom is a one-night thing—a dance that is dressier than you’re used to.
The company approached other states to see what incentives they might offer Tencro to locate in their state. With 800 employees. Tencro approached the state’s Economic Development Officer. regardless of the incentives. one-floor operation would be very profitable. It currently employs 800 people. but there are limited options available. and it does not really need any help. we are one of the largest employers in this county. We need to find out what you’re willing to do to keep us here. if anything. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. Tencro has approached the state’s Office for Business Incentives to see what. we’re of course interested in keeping you here. but was disappointed to learn that they offer very few incentives.m. Tencro: Let me just remind you of what our company means to this state. Also.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. because his parents could not disagree with such wellthought-out ideas. The spin-off business from our operations is huge. and had this conversation: Tencro: We really want to keep our company here and expand it. The assembly plant is out-of-date. the state can do to help the company expand and rebuild. If we can expand here. we’d be adding at least 500 new jobs. other companies have received incentives and Tencro certainly wants all it can get. and a new. our Exchanging Initial Offers 83 . Tencro is not going to leave the state. EDO: Well. Nevertheless. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. but it could easily add another 500 if it had the space on its assembly line. but we’re getting a lot of interest from other states willing to help us relocate. Example 2 Tencro Company decided to modernize and expand its business.
etc. EDO: The state has very limited resources to pay for economic development incentives. while we value your company as a long-time corporate citizen. We need a rebate on the local income taxes to help pay off the loan to build our new building. Certainly..employees pump money into the economy by buying houses and cars. now that the economy has improved. We 84 50 Practical Negotiation Tactics . Also. We need certain incentives. and we’ve had to divert funds from business incentive programs over to basic services. That might involve the state building housing for them at a reduced cost and providing them with some retraining. so we’d have to have it free here. EDO: Well. and traffic signals. 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. paying taxes. 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. And we’ve been offered land practically free in the neighboring state. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. and we are willing to offer some training dollars for the new workers. if the new location is at the local industrial park. additional police. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. etc. schools. And. We can’t possibly give it away to other companies coming in behind them. 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. There are more residents in the state demanding more public services: road improvements. or else it will not be cost-effective for us to stay here. We do want you to expand your plant. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant.
EDO: Get back to us as soon as you can. Future negotiations continued. Tencro bought land in the industrial park. we’re just not in a position to offer more than that at this time. the training and the new road improvements were all the incentives offered to Tencro. Tencro: Well. but for the fact that each party did its homework and was aware of the true facts. let us go back and take another look at our options.agree that the road into the industrial park must be widened and a traffic light installed at our expense. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. borrowed money for the new building. However. The new set-up was so profitable. Tencro was able to pay off the borrowed money in half the time. Other than that. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. and hired 500 new employees. Exchanging Initial Offers 85 .
e.000 two years ago. The other party will probably come back with an equally ridiculous offer. Their realtor told them that it sold for $290. or 3) Make an unrealistic offer (i. such as last year’s price. Jay: No. of course.. thus requiring greater concessions on both sides. offer $150. particularly if you don’t know the other party’s “settlement range.000 three years ago). is the most (or least) the other side will accept. The worst first offer is the one that is so high or so low that the other party jumps on it immediately—known as the “Winner’s Curse.000 and $337. and you cannot withdraw it in good faith. which can be very useful). never give them their asking price. at minimum cost.” (You have won a settlement.000 this year.000. and that two similar ones on the same street sold for $330. Sue: Let’s offer $325. Avoid giving away too much at the outset.000 for a house that sold for $185.000—what they paid for it.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. The sellers must be willing to come down a few thousand … Sue: Well. but you feel cursed because you gave away too much. Jay: No. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. because you have settled quickly. think things through before you make or accept the first offer.000. 2) Start out with an old number. That’s a fair price. 86 50 Practical Negotiation Tactics .” The perfect first offer. then $320. We don’t know how anxious they are to sell or if they know the market. before someone else does.000. 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.) To prevent this from happening. Let’s low-ball them and offer $290. and houses in this area sell fast. They found one they both like that lists for $325.
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. (the next day …) Jay: They made us a counteroffer of $307. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. but who knows what they are planning on offering. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. If. I can’t tell our realtor $290. Sue: Then you do it. realizing they offered too much. Both parties felt that they made a good deal.000. They outlined how they would develop a new employee performance-appraisal system. as requested by the human resource director. the company president. Frank: Me too.000 for each of us—$6. and the offer was based on fact: the prior negotiated price.500—half the difference! Sue: Great. as Sue had first suggested. The buyers were very motivated to sell. That’s an insult! Jay: Well. Exchanging Initial Offers 87 .000 total. was very impressed with their presentation. Give us your lowest price. then let them make a counteroffer.) Bob: I’d do it for $3.Sue: Don’t be crazy. the sellers obviously would have accepted and Jay and Sue. Lyle Foxworthy.000. they had offered $325. (Bob and Frank meet privately to discuss the situation. since they had already bought another house.
I’m out of time.) Lyle: Okay. Lyle: Okay. Bob: That’s fair.000. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. and you two come highly recommended. 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. but we can’t pay more than $18. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. What’s the cost? Bob: We want the job. We’ll do the job.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. 88 50 Practical Negotiation Tactics .000. We’ve waited long enough. and it would not apply. They also ended up getting three times ($18.000) their minimum price of $6.
but possibly of different values to your opponent. is likely to pull away from the table. in fact. In some negotiation situations. carefully evaluate an opponent’s offer. because if you do not at least appear to be flexible. T Making Counteroffers (The “Give and Take”) 89 . Instead. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. 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. the other party. It has often been said that the key to negotiations is to be flexible (see Tactic #25). Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Skilled negotiators such as salespeople. Experienced negotiators seldom reveal their exact priorities and objectives. and attorneys use tried and true tactics in giving and receiving offers. which would most likely weaken their position (see Tactic #26: Keeping Secrets). Expect that the “total pie” will be different from what it was at the outset. be enlarged (see Tactic #27: Expanding the Pie). labor negotiators. do not dismiss it because it is not all you want. When the other party makes an offer. Also. what appears to be an outer limit of the settlement range when the process starts can. which is often the case. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). and do not flatly reject it because it is not your offer. 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. seeing no common ground. One or more parts might be acceptable or indicate movement from their previous positions.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert).
His brother Sydney. except when you’re negotiating. Here’s the discussion that followed: Mom: Well. 15. finished his freshman year of high school at the beginning of June. In mid-June. I don’t want to give up on a family vacation that quickly. Dad. Jerry had already started his summer job. The reciprocal opportunity to review and select among options rather than accept one (“take it or leave it”) also gives your opponent a way to win. Option 2: Mom and I go before Jerry leaves on August 1. 19. He planned on being home for one last week before having to pack up and go back to college. We have four options. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. Proposing only one solution to a problem. and quicker. 90 50 Practical Negotiation Tactics . it looks like we can’t really plan a vacation for all four of us. The effort it takes to come up with multiple options (all of which are acceptable to you) reveals additional ways in which you see yourself “winning” in the negotiations. Jerry will be here. 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. Sydney. Dad: Wait a minute. Option 1: No family vacation. what say you. gives your opponent little maneuvering room and might even prolong or damage the negotiations. Let’s see what we can work out. The week he would be home would be the first week of school for Sydney. while it may be your best option.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. their parents began discussing a family summer vacation. completed his first year of college and came home for the summer around the middle of May. Jerry pointed out that he is expected to work until July 31st. Example 1 Jerry. Proposing multiple ways to reach your goal can get you to the same place. so you can go without me.
Jerry: My friends and I have plans through Saturday of that week. Sydney: Don’t I start school that week? I don’t want to miss school. if it’s okay with Jerry. If we started the vacation on a Thursday. Jerry: Okay with me. and Carl). Andrea considers Making Counteroffers (The “Give and Take”) 91 . Sydney: Okay. so I won’t be able to meet up with you until Sunday. one paralegal. but he can discharge employees for poor performance. we could return home on Thursday and still get a week’s vacation. Mom? Mom: Let’s do it. Joe has no say in who was hired by the corporate legal office to work in his unit. Bob.Option 3: Mom. me. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. and Sydney go to South Carolina before his school starts. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. we meet up with him that week for vacation. Mom: Well. actually. Classes don’t start until Friday. when we come home. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. By proposing numerous options. but it should work out all right. It’s not perfect. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Then Jerry joins us until Thursday. and one secretary in his litigation unit. And I miss orientation and start school the next day? Dad: That’s an option. Conclusion The goal was to have a family vacation. you have a half-day orientation on Wednesday.
she made a two glaring errors in judgment. or you can work out a “supervision” agreement with me so that I can better monitor your performance. You had no authority to agree to settle the Stites case without clearing it with me. so Joe took a “hands off” approach. we have a very big problem. which forced Joe to take action. Andrea: You didn’t list moving to another unit as an option. I thought I had cleared it with you when I told you what I thought they ought to offer and you said that sounded too good to be true. 92 50 Practical Negotiation Tactics . Andrea: Wait Joe. Joe: Andrea. It is to the corporation’s benefit to address that problem here and now. In the last month. isn’t it? But I don’t think just moving you really solves the problem. Before you start. Andrea: Well. Joe: That’s all well and good. I really see your options as follows: You can leave the corporation. To put it as bluntly as I can. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. 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. The attorney for the other side has agreed to give me the additional time to file it. If you don’t like the way I do my job.herself to be a professional. and I don’t see why we don’t have more independence. however. Andrea. Andrea: We’re hired for our expertise. you have a job-performance problem. We have a formal procedure that you just don’t like to follow. but it doesn’t solve the problem—nor is it the only problem. you know that wasn’t an okay to settle. Joe: That is certainly an option. rather than to put it off on someone else or for some time in the future. let me say that I’m handling the missed deadline on the pleading. and resents any attempt by Joe to supervise her work. Joe: Come on. Her job performance was acceptable. It was just a comment.
It also changed her attitude about being both a professional and a team player in a corporate office. in fact. (Adapted from The Mind and The Heart of the Negotiator. Andrea: Well. If that option is okay with you. the needs of the corporation have to come first. rather than my staying here. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity.Joe: That could be an option. improve her work performance. by Leigh Thompson. If you are convinced that I have to undertake an “approval” program. my goal is the same is yours: to create an environment where you can perform to your full potential. but it would still require some change in the way you work: either a demotion. or I would advise your next supervisor to put you on a very formal approval program.) Making Counteroffers (The “Give and Take”) 93 . lets talk to Bill about the move. Andrea’s move and subsequent “approval” regime did. I hope we can work it out. But in fairness to our mutual employer. Believe it or not. then it would save face for me if it comes with a move to another unit. and propose an acceptable alternative. I want to stay with the firm. Joe: That’s fine with me.
3) distributive items (those items for which the two parties have exactly opposite interests. because it can speed up negotiations and produce a more desirable outcome. These items often involve money). In essence. Maureen: First.) Yes. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides.000. 94 50 Practical Negotiation Tactics . It is used only when each side has several demands. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. then those which can be easily traded. Example 1 Brooks and Maureen Wilson have just finished building a new home. Exchange. and finally. then the contractor has lost $500 in revenue. Brooks: Right. etc. we both want the sod. let’s see if there are any items we both want. 2) exchange items (those that can be easily traded off—one item for another item of equal value. that’s $9. only those with polar-opposite interests that must be divided.500. three strategies are used. if a buyer negotiates a $500 reduction of a contractor’s bill. This approach is an important tactic. the fencing. Avoid assuming that you both differ on every issue (in which case you might be making unnecessary sacrifices) by first identifying items for which both sides have similar desires. Let’s see. Wow! We are off to a good start. With distributive items.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. 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). (She looks over the list.). thus making it necessary to find a middle ground on each. For example. and a home theatre. Let’s agree to those things. one person’s gain is another’s loss—zero-sum. They have a fixed amount of money—$14. They both agreed that this is the maximum they will spend on “extras” before moving in.
Can we split it evenly? Brooks: Okay. which I’d like to keep in the bank. I’d like to spend some of it on lighting upgrades.500 $2. and we both get things we want.200 $200–$2.000 $500 $1. $750 for lighting and $750 in the bank.500 $5.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.000 $2.000! Brooks: Good.000 $1. We have $1.500 $500 $1. that makes sense.000 $3.# 1 Sod Item Cost $1.000 $5. which takes another $3. Maureen: No. Making Counteroffers (The “Give and Take”) 95 . These are all permanent immediate needs. I’ll trade your sidewalk and trees for my whirlpool bath.500 left.
Profit-Sharing 5. Drug-Testing Program 96 50 Practical Negotiation Tactics . Pension Increase 3. both sides exchanged lists of initial demands at their first meeting. All items to be negotiated and their desired outcome for each item were put in writing for review. Length of Contract 2. 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. The combined lists total thirteen different items: Desired Outcome No. 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). finally agreeing to split the difference on the remaining amount (distributive items). management and union negotiators found that a “winwin” approach to negotiations worked well.Conclusion By taking the time to list all the items each person wanted and their cost estimates. Wage Increase 4. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. even in difficult years.
and removed from the table. Job Security 13. and (#9) to continue the often-discussed no strike/no lockout provision. eleven of the thirteen original issues to be negotiated had been agreed to. Health Insurance Employees pay 20% Continue cur. No Strike/No Lockout 10. Subcontracting 12. Shift Differential 11.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Finally. Clothing Allowance Based on senior. Next. They proceeded to draft the language to settle these issues. At this point. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). Paid Funeral Leave 9. First. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). one Making Counteroffers (The “Give and Take”) 97 . Because they held opposite positions on these issues.Distributive rent program co-pay Exchange Exchange 7. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Overtime Assignment 8. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. (#5) a new drug testing program. they began to trade off the exchange issues of similar value and nature.6. signed.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). 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. Next.
exchange. A middle ground often must be found on each of these distributive issues if you are to reach an agreement.side’s gain is the other’s loss. but it can be very effective when a negotiation situation involves several issues. The tactic offers several advantages: First. Conclusion This tactic is simple. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. Second. when you agree on the items where both parties have similar desired outcomes. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. negotiations begin on a positive “win-win” note. Third. when you exchange items so that each party achieves their desired outcome on one of the two. 98 50 Practical Negotiation Tactics . 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. if both parties start from reasonable positions. 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. but a middle ground was eventually found on each and negotiations ended.
and from a strategic standpoint. Here is how the last issue was handled: Okay. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Rob: Making Counteroffers (The “Give and Take”) 99 . and can help you reach your goal. It is especially important that you do two things: take your time before rejecting any offer from the other side. and studies late into the night. do not offer a counterproposal right away. 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. stereo. will make your opponent feel good about the process. Mutual respect must be part of the negotiation process. The final issue had to do with “lights out” and quiet times for studying. they decided to establish “room rules” so that they would both be comfortable with the room assignment. you know. each side is expected to put an offer on the table. This isn’t high school. last item: I’d like it quiet in the room at night.Tactic 24: Wait to Counter As the negotiations begin. so he wants a quiet room late at night. I’m not interested in a curfew. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. Rob stays busy all day and evening with other activities. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. Waiting a respectful amount of time to counter. Jasper: Finish or not. and looks like you are belittling them. Rob: Wait a minute. the location of the TV. so I can study. Let me finish. Since they didn’t know each other well. even if you aren’t going to accept their offer. and refrigerator. So when’s a good time? Jasper: (without hesitation) No way. They agreed on which part of the room each would have.
Failure of both young men to allow one another to have their proposal considered caused the relationship to break down.) Listen. Rob: (there is no hesitation in this voice) No. 10:30 p. b) written complaint to a floor manager if the matter is not resolved in 5 days. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . but changed his mind when he saw Jasper’s attitude. The appeals procedure would have to be altered to reflect the restructuring. 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 ABC ‘s contract with the union. I want a 10:30 p. and the union foreman would report directly to the plant manager. the positions of non-union crew leader and floor manager would both be eliminated. and that’s it. curfew on TV and other noise every night. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. No agreement was reached. is all I’ll consider.Rob: (Rob was about to suggest midnight on Mondays through Thursdays.m. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. The union contract required that management renegotiate this change in the grievance procedure with the union. Under the restructuring. and that’s not negotiable. and d) a hearing with company owner if the matter is not resolved in 20 days.m. Jasper: Midnight. midnight during the week is the only thing I’ll consider. Jasper: (without taking a breath) At best.
The redraft is simple and straightforward. rather than go on to appeal it to the company owner. the employee and the foreman would meet with the plant manager and attempt to resolve it. Company: Here’s the new draft of the grievance procedure. our grievances often signal to management that there are real problems on the shop floor. Company: (rather abruptly) Let’s not drag this out. but to dictate.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . because those management layers are gone.any objection to the change. After initial pleasantries were exchanged. 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. We’d like you to consider the plant manager’s role as a problem-solver. The union was prepared to accept the plant manager’s position as final. We’ve got a couple of alternative models for you to consider. ABC Company’s negotiator explained the management changes soon to be implemented. In fact. (Note: An attitude change sets in. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. An aggrieved employee can make a request for a meeting with the plant manager. If in 20 days he/she has not been satisfied. rather than as a judge on the merits of the grievance. and began the negotiation session concerning the grievance procedure. We’ve simply eliminated the first two steps. If the union foreman felt that the grievance had merit. he/she can take the grievance to the plant owner for a hearing. Union: You obviously didn’t come here to negotiate. Union: As you know. and everything else stays the same. Union: Hold on. Company: (no hesitating) Trust me. Certainly. and I’m certain your members will be okay with it. 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. this redraft is a very simple change to the contract. We just cut out two steps. no one can complain about that.
the two parties did meet again. 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. 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. the company entertained the ideas the union had tried to propose before. and actually accepted a three-step procedure. We’ll see you on the picket line. Union: We’re very serious.two-step grievance procedure instead of a four-step procedure. rather than in the 35 days the current system provides. 102 50 Practical Negotiation Tactics . This time. After a cooling off period. and we’ll strike if we have to.
If you are flexible. They flipped a coin to see who “got” them and the new baby this year. and ten nieces and nephews) always ate around 5:00 p. and we’re really not able to enjoy either one. Even before the baby’s arrival. Be open minded. But after the negotiation gets started. Bill’s family won. it’s just too much to do both.m. their spouses. Making Counteroffers (The “Give and Take”) 103 .Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. Sue’s sister Nancy called her to talk her into coming anyway. two brothers. Mom says you.m. two sisters. one sister. and now have a new baby girl. Bill’s family (parents. They’ve done the research. Nancy: Sue. established goals. Next year. 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). and do not dismiss something said by your opponent just because it came from the opponent. we’ll get to our side. Arriving late at Bill’s family gathering caused him to miss the “traditional” pre-dinner pro-football game on TV (which he had grown up believing was the real reason for thanks at Thanksgiving). and identified the range of options they feel comfortable with negotiating. four brothers. The couple used to have Thanksgiving dinner at both families’ homes. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Sue’s family (parents. and at least five aunts and uncles) ate around 7:00 p. Example 1 Sue and Bill have been married four years. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. you can adjust your demands or goals to include such new ideas. Sue: Yes. Bill.
When that goal looked out of reach. 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. Nancy: I’ll let you know. Mom’s very upset.Nancy: It just won’t be right without you guys. Sue: I don’t know. I know that I would rather not do two Thanksgiving dinners on Thursday. it’s okay with me if you can sell it to everyone else. Sue: Next year.. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Celebrating the next day seems odd. There’s nothing “special” about Friday. So that doesn’t work. I thought of asking Mom if she could move dinner up to noon or so. and it became the family’s new tradition. the holiday will be over. By being flexible. Nancy: If we keep the time at 5:00 p. some people have to work on the Friday after Thanksgiving. Thanksgiving is Thursday. I bet everyone could make it on Friday. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. Bill won the coin toss for this year. we’ll come to Mom’s. I mean. but she won’t tell you. but then I realized that the rest of you already go to your in-laws earlier in the day.m. she suggested a unique alternative. either. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. Nancy: We’d make it special by all of us being together. 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. 104 50 Practical Negotiation Tactics .
Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. depending on the cost of the land. City: Can’t you borrow the money from a bank to build the facility. the foundation’s regular annual grants come to roughly half of their available funds. the interest income of around $6. Estimates for building a new orphan home ranged from $12–$15 million. but the principal of the fund can’t be touched. We only have maybe $2 million a year to put toward this charity. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . a non-profit organization for orphaned children. we’re committed in theory. The foundation has a substantial endowment fund.5 million is available for distribution to numerous charities. Kids’ Home: As you know. Each year. They are meeting with the city to ask that the land be donated by the city for the project. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. City officals: We can probably give you the land for free. We need the city’s help by allowing us to get the city land donated to us (for free). We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. but we can’t fund all of the $12 or $15 million. Foundation officals: Oh.000 a year for operations. Kids’ Home: That’s why we brought the foundation’s officials with us. but we need some assurance that you will be able to build and operate the orphan home at that location. we hope to break ground early next year for the new orphan home. Kids’ Home hoped to get $500.Example 2 Kids’ Home. Unfortunately (for Kids’ Home).
but we’re willing to look at it. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. We’re not familiar with that program. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. We’re a nonprofit group. If we borrowed $15 million at 10% interest.Kids’ Home: Borrowing the money gets very expensive. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. We wouldn’t want to make such a commitment to a bank. We’ve never committed our funds to pay back a bank loan. it could end up costing double that amount. 106 50 Practical Negotiation Tactics . We probably would not be able to participate. and really taxes our ability to raise funds. I’ll contact the state tomorrow. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased.
the Smiths could count on parking their car directly in front of their house. the neighbors began to have problems. it is not acceptable to lie. Successful negotiations depend on trust. yet not reveal all of your goals and objectives. and often lasted until 2:00 or 3:00 a. The Jones family suspected that the Smiths called the police. and asked the officers to cite the Jones kids for parking too close to a corner.m. At the same time. and trust can only be established if all parties interact truthfully. and often took up all the space along the street in front of the two houses. In order for a negotiation to be successful. Making Counteroffers (The “Give and Take”) 107 . and you probably won’t identify your throwaway items or tell your opponent your bottom-line. Mr. But the Jones clan had four cars altogether. Example 1 Soon after the Jones family moved in next door to the Smiths. Smith: We don’t know what you’re talking about. Mr. They asked to meet with the Smiths to talk about these disagreements. each side has to know generally what each other wants to accomplish. It is perfectly acceptable to say that you are not ready to reveal certain things. The Smiths called the police to complain about a late-night party. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. and we would very much like to talk about how we can resolve these issues.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. you might not want to reveal all of your priorities at first. Before the Jones family moved into the neighborhood. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. However. Jones: We’ve obviously gotten off on the wrong foot. 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.
we’d like to be able to park our car in front of our house. we thought you might have called the police about our kids’ party and our cars. Mr. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Almost every day. Mr. Smith: You know that your boys are causing our dog. In good weather. 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. It is really very disturbing. And the music is to be off at midnight. if they are outside. Also. Jones came to see what the problem was. Smith: Yes. Mr. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Mr. we would like to work out some solution. (A week later. and not in the back yard. I guess. but we do know that someone has complained. a lot of problems. they’re hitting baseballs into our yard. the late-night parties are a problem. we’re good now? Mr. Is that everything now? Mr. since you’ve asked. the next time the boys were out playing and the ball came into the Smiths’ yard. that wasn’t us. Smith: No. Jones: We’ve already talked to the girls about the parties. I’ll talk to the boys and we’ll make sure they play baseball in the park. Smith: Well. Smith: Well. At our age. Jones: Okay.) 108 50 Practical Negotiation Tactics . fine. Muffin. and they won’t be having friends over more than one night a weekend from now on. Jones: Well. In spite of the Smiths’ assurances. yes. and was met with the following: Mr. Jones: I wish you had mentioned that the last time we talked. So. we have a problem walking long distances in bad weather. Mr. And we’ll make sure none of our cars are parked in front of your house.Mr. they kept it.
although none of the facilities outside the U. The union laborers walked off the job on Friday. or European companies do. You could have seen that yourself. but Neno cannot tell the union this. Japanese companies often do not “recognize” labor unions the same way U. Jones: (at the Smiths’ door. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Jones: Sure.Mr. you’ve said that before. Neno’s president and the Union representative met to discuss the walkout. Neno has been negotiating the sale of its business to a British company. Its local headquarters has a union to handle its international shipping. Mr. have labor unions.S. Why didn’t you tell us? We can’t read what’s on your mind! Mr. and the deal is close to being final. Making Counteroffers (The “Give and Take”) 109 . Unless Neno can get the Union members back to work on Monday. You obviously don’t want to be “good neighbors.S. because they didn’t like a grievance decision. But we didn’t call the inspector. Smith: Well. or the deal is off. We would have fixed the tree if you had asked. The union knows that the company is up for sale. 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. Example 2 Neno Enterprises is a shipping company with extensive global operations. Union officials are afraid that a Japanese company might purchase it.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. irate) I can’t believe you people called an inspector on us. the tree was clearly over the fence. The British insist that a very strict confidentiality provision be part of the negotiating process. the British firm will walk away from the deal.
I think it already has. 110 50 Practical Negotiation Tactics . I need your guys to come back to work on Monday. You don’t want to mess up our negotiations. Have the guys back on Monday. Therefore. We’ll meet with all of the parties on the grievance first thing Monday. I know it’s not news to you that this business is up for sale. If that’s going to have a bad effect on your being able to sell the business. Neno: Look. Neno: All I’m saying is that there is a difference. Union: We think that the grievance decision affects our wages. I’m certain that if we can sit down and talk next week. I promise you. But if your guys are out past Sunday. But I have to have everyone back on Monday. Neno: Look. this is a legal strike under the contract. I’ll forget all about the strike. and if the guys are back on Monday. Union: What aren’t you telling me? A labor shutdown. any interruption in our shipping could affect how these buyers look at our business. maybe by next Friday or the week after that we’ll have our guys back to work. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. no harm-no foul. whether it’s for one weekend or a week. Anyone who buys the company will have to honor the contract we have. It’s not the time to have one. do you? Union: No. Our guys are prepared to stay out a lot longer than Monday. If they do come back. we will resolve it to your satisfaction by the end of the day. We’ve not had a labor shutdown in 20 years. is still a labor shutdown. it will impact our marketability. we don’t. We can’t put up with the kind of decision we got on our grievance. then there’s probably no harm done. so the union won’t be hurt by the buyout. If everyone is back on Monday. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. I can’t really be more explicit than that at this time.Neno: You know this is a wildcat strike and that it is in violation of our contract. And one company that is interested has a really good track record on expanding the businesses they buy. You really don’t want to do that.
and it’s that important to you as well. the union was willing to trust Neno—even though he couldn’t tell them everything. Union: Okay. I would be more specific. was the right decision to make. rather than make up reasons. Because the parties had dealt honestly with each other in the past. If I could. I’m going to go along with you because you’ve always dealt straight with me.Union: It’s that important to you? Neno: Yes. Conclusion On Monday. Making Counteroffers (The “Give and Take”) 111 . Neno called the union negotiator in and briefed him on the sale. as well. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. Can you assure me of that? Neno: Yes. we’ll be back to work on Monday. But I can’t. Union: Okay. He told him that it would mean that the union would not only keep its jobs here. while the grievance was being resolved. I can. the sale was finalized. But I need to tell my guys that this is important to them as well. but the British firm will allow them to organize at their foreign locations.
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.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
But when her mother laid out the schedule and gave her alternatives. and clean it. Use the $5. but I will cut your travel budget out completely. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . Example 2 Roberto: I can’t properly advertise this new program with a $5. I’ll approve $15. Clean it after your game. or C. I can accept B.000 budget! I need at least $20.000 for advertising. Roberto: But it will never generate enough interest if no one knows about it. but no TV or anything until it’s done! (pause) Okay.000. that is enough time. but the company president does not share your optimism on this program. I’m not going back to him again to discuss this program. B.000). Felipe: Well. I’ll find a way to do without one part-time person. Take it or leave it. I’ll approve $15. Conclusion At first.000 for advertising. I’ll do it now. or we lose a whole year. Amber resisted the chore she hated. she chose the one she most preferred. Felipe: (Roberto’s supervisor) Sorry. Felipe: Sorry. I have three hours. Roberto: Well. I can’t help. Three. but I will cut your staff by one part-time person (or $15.Amber: row before your basketball game. keeping her Saturday free. (long pause) Felipe: Let me give you three options: A.000 in the budget. Roberto: But I need to start the direct mail and newspaper ads within two weeks.
thus achieving his goal of not having to ask for a larger budget. One alternative. Making Counteroffers (The “Give and Take”) 117 . would enable him to adequately promote the program.Conclusion Felipe was willing to think “outside the box.” He offered Roberto three alternatives of equal cost. which was his goal. Roberto believed.
Unfortunately. inviting a response. and 118 50 Practical Negotiation Tactics . I very much appreciated the fair job performance review you gave me. but one side comes back with a non-negotiable demand. Susan: Mr. Example 1 Susan. After a few minutes of silence. Jones. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. received a glowing report from her boss on her job performance. This should have resulted in an automatic promotion and a sizable pay increase. She was determined to hold her ground for at least a 13% pay increase and a promotion. 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. 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. he can make an open-ended statement. But she also knew he would have to be willing to go to bat for her with his superiors if she was to get her advancement. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. I think you would agree with me that I have performed well above expectations this past year. the promotion had not yet been approved. nearing her third year with the company. you are a valued employee. It was 16% less than she had been led to believe she would be getting. I have to tell you that while I appreciate what you have done for me. If his opponent cannot agree to the demand but does not want to end the negotiations. Susan: I hope so. You know my commitment to this company. 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.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. Jones: I certainly do.
if management can see their way to giving you the pay increase now. Well. 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.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. Okay? (says nothing) Let me check it out and I’ll get back to you.or three-year period. the company’s refusal to grant them now was a harder position to support. I would very much appreciate it if you could ask the company to reconsider. I must ask you to try to get both. Susan’s silence prompted Mr. I really want you to stay with the company. If there is some flexibility in your request. Jones to continue to offer solutions. but a pay increase of that size might be more difficult. Promotions of this type are all but automatic around here. it could help. maybe we can talk about the promotion later in the year. and sell it to management that way. Making Counteroffers (The “Give and Take”) 119 . (says nothing) Or. because I feel my future with the company might be at stake here. of course I will be glad to do that. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. I could probably find a way to phase it in over a two. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. and I think that I really haven’t been dealt with fairly. and I’m sure management will agree. Conclusion Mr. (says nothing) If I can’t get that pay increase approved right now.
and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. and were trying to settle on new and expanded areas when one of the elected officials (Ms. 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. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. by saying that she might run for Chair. Also. This is how the negotiations went: Town Council Representative: Well. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. and until she does. She has not decided what she’s running for. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. The end of the agreement coincided with the election cycle for the two towns. Mayor’s representative: No. The term of the original agreement was nearing its end. Town Council Representative: I think you’re wrong. The mayor. her plans really don’t have any bearing on these negotiations. I don’t think it’s a problem. My bosses might not have been inclined to expand the agreement anyway. The parties agreed to continue the previous terms of the agreement. has colored these negotiations. Town Council Chair). Mr. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. Mayor) said that she was considering running for office. He decided to push for a simple renewal of the original terms. but now they’ve got to ask what Madame Mayor’s motivations are.
I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. I hate not to attempt to add some additional areas to the agreement. Conclusion By remaining silent. I don’t know what her reaction will be. Making Counteroffers (The “Give and Take”) 121 . the Town Council representative’s position prevailed.represents have to worry that her desire to switch governments might taint the negotiations. the Town Council’s representative left the mayor’s representative with no room to maneuver. He either had to end the session or figure out what to say to reengage the other side. 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: (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. Mayor’s representative: Well. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. In the end. and the agreement was renewed with no new provisions. I’ll go back and tell Madame Mayor your position.
when one of you might say. Joe. As was sometimes the case in these parts. and began to renovate it as a home and a pottery shop. Madeline: Hi. She traced the brook back along its course to see why and where it had changed its path. Obviously. One day. the brook was the property line separating her property from a neighboring farm. Neighbor: Well. The property came with three acres of forest alongside a meandering brook. You will have to remove the rock barrier. she noticed that the brook came within 100 yards of it. Example 1 Madeline bought an old farmhouse outside of a small town. you should always enter the talks with a good idea of what you are willing to agree to. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. which an upstream neighbor had built. “I have to have this. Having an iron-clad demand probably won’t give you enough room to reach an agreement. It calls for compromise. or we will be at an impasse. the brook and rock barrier are on my property. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. 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. had redirected the brook further into her property. I have a problem. 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. She discovered that a rock barrier.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Madeline built a gazebo about 500 yards from the brook. The brook 122 50 Practical Negotiation Tactics . in a small clearing. after the gazebo had been there for about five months. Madeline. The reason I built it was so that I could protect my patio.
I couldn’t have that. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. 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. at least I’ve maintained my property line. she widened her range of options. Also. Madeline: Yes. She left room for a compromise. Neighbor: I can do both of these things. but you’ve changed the boundary line of my property. restore her property line. My neighbor on the adjacent farm wants to sell part of his property for a housing development. This will put these houses right next to me. When she found out that this was not going to solve her neighbor’s problem. and allow the neighbor to protect his home.extended right up to my back door when the rain was heavy. By expanding the range of options available to resolve the dispute. which enabled her to achieve her goals. you have not only threatened my gazebo. I won’t remove the rock barrier. Madeline was able to protect her gazebo. I can’t have the brook in my house. and return everything as it was. Madeline: Well. I understand that. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. what I need is to protect my property line and my gazebo. I’ve lost 400 yards of property on my three acres. Making Counteroffers (The “Give and Take”) 123 . but I don’t know what I can do about it. What if you removed the barrier for a short time. Neighbor: I’m sorry. 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. It might not be necessary to make such a dramatic change. Madeline: But by diverting the brook. if the brook is redirected. Then.
With long-term planning and investments. Company: This could not come at a worst time for us. as it has always been. Over the next five years. This would be a better benefit in the long run. If we invest the $200. we know that health insurance premiums might skyrocket. Pilots: Look.000. However. and the premiums for health care just keep going up. dependent coverage could cost us $1. But only a few of our people are close to retirement age. And we cannot afford that $1. 124 50 Practical Negotiation Tactics . The projections for the next five years were that these costs would increase to about $1. Everyone was afraid that the dispute would cause an impasse and a possible strike.000 to cover the premiums for dependent coverage. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. Over the last five years.000. and we know that with this new contract term of five years. the airline paid a total of $200.000 a year over the next five years? Company: Yes.000. The company wants to trade paying for dependent coverage for better pension benefits. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. and are willing to keep pension benefits the same. As best as we can tell. you are taking a risk on the costs increasing.000.000. what they really need is for you to cover the costs of dependent coverage. that would be the minimum increase.000 figure. with all wage and operations issues resolved fairly early.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000. This is just a cash-flow problem that your members have to understand.000 (which we reasonably should have expected to pay in premiums) in the pension account now.000. then the pension benefits overall will increase by $10. The airline industry is in a slump. the company can make your pensions much better. The pilots want dependent coverage paid for by the company.
if they were that high. the company will not be expected to give us this benefit. we are. It initially believed that the only option was to put that money into pension benefits.000.000? Once the cap is met. The health insurance market stabilized. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. Company: Then it’s okay with us. and the pilots knew what to ask for when the contract expired. however.000 available. that would be worth it. or invest in the pension plan? Company: Yes. Company: If the company spends the $200.000 the first year on the premiums.Pilots: But you do have the $200. so the decision to be flexible was a good one. then those funds will not be available to invest in the pension plan. The dependent coverage is more important to us now than the pension benefits. with a cap of $200. can we agree to a year-to-year agreement on dependent coverage.000 actually carried them through four years. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. If we can get two or even three years out of the $200. by agreeing to let the company cap its exposure for dependent health coverage.000 to either pay one year of the premiums. The pilots expanded the range of options. The $200. Conclusion The company was committed to limiting its exposure to $200. Making Counteroffers (The “Give and Take”) 125 .
it’s a deal? 126 50 Practical Negotiation Tactics . If you are on the receiving end of such a tactic.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. Saleswoman: I’ll be right back. Buyer: Way too much! Saleswoman: Well.500! Saleswoman: Yes. Example 1 Car buyer: What.000 car. do you want to look at something else? Buyer: No. $45. I guess it would be around $600 per month. I recall the day you drove it out of here. Phrases such as “for only pennies a day.” “affordable weekly payments.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. but that was several years ago.… (20 minutes later) Saleswoman: So.” and “low monthly rates” are examples of the salami tactic. what monthly payment did you have in mind? Buyer: More like $300 per month. I just can’t imagine the monthly payment on a $45.000 for a Volvo? I bought the one I’m driving for $19. Saleswoman: With your 740 in trade. Buyer: Yes. be sure to add up the total cost. and compare it to your strategic objective. if I can give you this car with a $300 monthly payment. I love this car.
Let’s see.000 price into “slices” the buyer thought reasonable. do you want HBO? How much? $5.” she had him—she worked around the $300 slices. and payout slices to reach the total price she wanted.00 per month. (looks at the numbers) That looks good.Buyer: I don’t see how you can do that. Making Counteroffers (The “Give and Take”) 127 . as promised. You can do that.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. down payment.99 per month. you can get the Disney channel for only $5. Instead of a three-year lease. Saleswoman: Simple.000 down. with your car and $6. Sure. Once the buyer volunteered that $300 was an affordable “slice. but let me see the numbers. Great! So.00 per month for your service. do you want Disney? Yes. I can’t afford that much.00 per month. it will be a five-year lease. can’t you? Buyer: Yes. But my neighbor pays $39.” She decided to cut the $45. I can afford $6. I can’t discuss another client’s account. but what else must I buy? Only the basic service for $8. and added the trade-in.
I really want the sports channels. Okay. Conclusion The owner thought his neighbor’s service at $39. Great. But that’s all! Then we’ll hook you up on Monday. Any other kids’ channels? Yes.00 per month was far too much. but he agreed to six “salami slices” for a total of $38. 128 50 Practical Negotiation Tactics . and probably felt much better about the total negotiated package because it was presented in modest individual slices. Disney is for the kids! The sports channels are for me. 2. That’s another $5. Yeah. 3.00! Why? Because he judged the per-slice price to be reasonable. What about the music package? Yes. Thanks. we had that before. The total is $38. That’s $5.00 per month. and SI 1.00. they asked about the Cartoon Network.00 a month. 2? How much? $8. instead of one total amount.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.99 per month. and my wife wants the old movies.
which can be successful if the opposing team has two or more members who hold different views of an issue. but it can be used effectively when one party clearly has an edge. the traditional car salesperson might tell the buyer. however. so are you ready to make a deal? This might convince a few buyers. For example. A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. Tactic #33 (The Bluff) is a classic pressure tactic. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. today. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. it is effective. pressure tactics should probably be avoided. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). It should be used with caution: It can end negotiations immediately. When both sides believe that each has equally strong positions.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. “I can only guarantee this price until 6:00 p. turned off by the tactic. Humor might not look like pressure. and the use of humor. but in tense. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). but others will walk out the door. and it can destroy your credibility.m. angry negotiations. Applying Pressure 129 . In some cases.
When Lacey found out that his employer was transferring him to another city farther down the coast. 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. I don’t know. boat prices have really gone up. The two couples used the sailboat a lot the first couple of years. I think Chloe and I would be willing to pay more than just the money you guys put into it. together and separately. Don and Abby now use it less and less. Don: Absolutely. big news! I’ve been promoted. he and Chloe wanted to buy out Don’s and Abby’s interest. in fact. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. Lacey and Chloe didn’t know that Don and Abby were. In the last couple of years. Abby really loves that boat. Such exaggerations are easily revealed or uncovered.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Lacey. but Don. and we need to talk to you about how we can buy you guys out. Chloe and I would like to take the sailboat with us. and we’ll be moving south in the next month or so. and they will weaken your credibility. but it is not a good idea to exaggerate what you are offering or what you are giving up. Lacey: I know. Don: Wow. Although I do think there ought to be some consideration for the two years you had use of the boat. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. We’d hate to give it up. getting a divorce and each moving away (and would have no more use for the sailboat). And we don’t want to be unfair. Lacey: Don. It 130 50 Practical Negotiation Tactics .
Let me talk to her. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. big news!! Don got his promotion. I’m surprised by your attitude. Abby: That boat. (After Lacey and Chloe had a chance to talk. the boat has depreciated. I’ve been thinking. I’m sorry. and I’ll get back to you. It just reminds me of how happy Don and I used to be. Abby told Chloe about the divorce and about how she never wants to see the boat again.is just about the most important thing we own. (Around the same time. I have big news too.) Lacey: Don. I’ll be glad never to see it again. I was afraid something was going on when you all-butstopped joining us on the boat. 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. Don. though it’s not so happy. Chloe: Oh. After all. which you would have to share if you want to retain half-ownership. Abby: Well. We’ll be leaving here for the Midwest. Don: Lacey. Lacey and Don’s negotiations changed considerably. and we’re moving farther south. but separately. and neither of us put much in for upkeep. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. Applying Pressure 131 . Lacey: Cut it out. I thought you understood how important this boat is to Abby. he likely would have found himself in a stronger negotiating position. Abby is having this conversation with Chloe) Chloe: Abby. It’s about time now for some major investment. Don and I are getting a divorce.
but this has been such a crazy situation. I think you’ll have to agree with me that wage increases in this next contract will not be available. Company president: Well. I can’t see how today’s numbers really impact the long-term profitability of this company.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. The current stock price is the lowest it has ever been. in fact. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. And while these fluctuations have little to do with the health of the company itself. Union negotiator: The stock price might be down right now. I’ll be looking to you to make some major wage concessions on this upcoming contract. Here’s how these negotiations went: Company president: Well. our production line changes at least three times a year. I’ll have to show them 132 50 Practical Negotiation Tactics . I’m telling you the stock price is having a huge impact on us already. I read in the papers every day that the market is still strong. the company president decided to use the stock price as a negotiating tool during the current union contract talks. I’m afraid that with this current information. in this global market. they will make their decision based on a review of the stock price that day. we will need to make drastic cuts in our operating costs just to survive. the situation in the stock market is not good. And as you know. and that the economy is strong. I’ll be going back to them as soon as next week. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other.
They told union officials that it would be very rare for a bank to make its decision solely on stock price. If the stock goes up next week. Union negotiator: I know that’s what you told me. When negotiations resumed. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. Company president: All right. but your proposal to cut wages is just not going to fly. If you put it that way. they would do a thorough analysis and look at the health of the company over the long haul. no concessions! In fact. the company’s position was weakened even more. we’d like to reopen talks on next year’s pay increase. When the market took a swing up during the negotiations. the union checked into the Letter of Credit transaction with some experts in banking. So. Union negotiator: Well.) Union negotiator: I’m sorry. and I’ll have our people look at it. Applying Pressure 133 . but I checked it out and it’s not totally true. Conclusion Because the company’s president over-emphasized the impact of the market on the company. We think this company is very healthy and can withstand the temporary downturn. The union became hardened in its position that the employees needed wage increases in the new contract.that we’ve cut expenses to counter the losses in the stock market. Give me your proposal for wage concessions. Let’s get back together next week. and the union ended up with a substantial increase in their contract. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. he lost the trust of the union. let’s talk about it. okay. (In the interim. here’s what happened.
Here’s how the discussion went: Christy: Tom. Tom: Oh. If you subsequently agree to begin talks again. so their “free” time was very limited. are you? Christy: I don’t want to be. You’re not upset about that. I guess I’m just surprised. Sara said she saw you at the movies with Charlene yesterday. The couple had not discussed marriage. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. Example 1 Christy and Tom had been dating for about a year. but Christy thought the relationship was heading in that direction. Charlene. and they really have no intentions of doing so. you will have lost credibility with your opponent. but I really am. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. She knew that if she made such a demand and threatened to leave him unless he made a commitment. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. it might backfire. and I really wanted to see the new Lenny Bruce movie. Both of them were still in graduate school and worked full-time. I called Charlene and she was available. yeah. Poker players know all-too-well-that bluffing can be very costly. We don’t have that much free time together. I knew you had a class. I really hate it that you chose to see the movie with Charlene. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. 134 50 Practical Negotiation Tactics . and she didn’t think Tom had. they are bluffing. This can come back to haunt you. either. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else.Tactic 33: Bluff! Bluff with caution.
Tom: I have friends of long standing who are women. then I’m afraid I want us to stop seeing each other. The union negotiators. I’m not “dating” anyone else. I just thought of her because I knew you weren’t available. I won’t go out with any woman friend. she paid her own way. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. If that’s not possible. Tom: You’re serious? It’s that important to you? Christy: Yes. Actually. I’m willing to risk losing you. I certainly don’t want to lose you. Christy: I just can’t see it that way.Tom: She’s a friend who happens to be a girl. She convinced Tom that her feelings were strong. It really wasn’t a “date”—we just saw the same movie together. Tom: Okay. and at first he thought she might bluffing. he had to make a commitment or risk losing her. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. If Tom had “called” Christy’s bluff. but very little progress had been made. He believed she was sincere. Since he wasn’t sure about that. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. It is. 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. I need to have your commitment that you won’t do that. if you can’t make that kind of commitment. It’s made me realize that I want us to have an exclusive relationship. Applying Pressure 135 . Conclusion Tom didn’t want to lose Christy. so he didn’t call her bluff.
First. it will cost too much. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. 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. Why don’t we put this one aside for now. This is a critical issue to us. The union members ended up voting not to strike at this time. Union: You’re wrong. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. Nexon: I’m sorry. or else we’ll be asking the membership to strike.) 136 50 Practical Negotiation Tactics . And I don’t believe you’re going to go call for a strike over this. Second. This is something we just have to have. Nexon: We’ve got lots of issues to discuss. We need some agreement on this today. but working without benefits is simply not acceptable.believing that Nexon would not risk a strike. we’re really prepared to go the distance on this benefits issue. If we’re not able to reach agreement on this. then all of our other demands will change. Union: You don’t seem to understand. We’re not going to reach agreement on this at all. much less today. Another bargaining session was scheduled. Many of our union members who are working part-time hope to work full-time. Nexon: I’m just not prepared to give you one. Here is what happened at the next negotiations session: Nexon: I’m sorry. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. we want the part-time workers to apply for and fill fulltime positions as they become available. We need an answer today.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
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.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
his air-conditioning unit went out. while the other is not—that is. such as the advantage of time. its union has the advantage in the weeks just before Christmas. for example. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. because this is the busiest time for that industry. Since the heating and air conditioning company held no leverage over him. The same kind of thing happened a couple of years before that: In the middle of August. It is sometimes referred to as “pressure bargaining. Unions can strike at any time to achieve their goals if they have some leverage. and was forced to pay whatever they demanded.Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. he was able to successfully bargain for other services. 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. there were times when there was no pressure and no emergency. not blessed with many household repair skills. when one side has “leverage” over the other. Example 2 Let’s face it: Sometimes one party holds all the cards. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. The owners of professional sports Applying Pressure 141 . If the employer is a shipping and express mail company. Since his toilet had overflowed and water was continuing to run all over the floor. the guy was in no position to dicker over the price of the repair.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. Try bargaining with a plumber! This homeowner. He was at the mercy of the company that could install an appropriate unit the fastest. On the other hand.
The employees had no power to resist the demands of the employer. can suffer repercussions in the form of sabotage. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. low employee motivation. there are likely to be long-term repercussions. despite strong resistance. it is the union’s turn to hold firm on its demand). What goes around comes around. This gives it the upper hand in negotiating with employees. A note of caution: Circumstances in one round of negotiations might give one side an advantage. If so.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. for example. (Team owners are notoriously unpredictable. When the employer proposed adding duties to the job classifications. consider whether or not the two parties will likely meet again in the future to negotiate. will what goes around come around? 142 50 Practical Negotiation Tactics . but before you choose such a tactic. she has leverage and can more likely hold firm on her price. On the other hand. If you have a special skill that an employer needs and few others have that skill. Other employers find themselves in situations that actually reverse the leverage (when. When one side places undue pressure on the other side. then you are in a position where you can set reasonable demands on wages. either individually or through collective bargaining. etc.) 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. unemployment is low and jobs are plentiful. and other undesired outcomes. benefits. but they are less willing to negotiate several months ahead. however. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. 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.
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. Almost from the beginning of the three-hour drive. Susie: The doll belongs to both of us. Example 1 A father and his two daughters were on their way to visit the grandparents.) Applying Pressure 143 . You’re driving me nuts. I can’t drive if you keep this up. you have it this part of the trip. Just because you saw it first doesn’t make it yours. and here’s how the “negotiations” went: Dad: You two stop fighting. (Their dad pulls to the side of the road and turns to face them in the back seat. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Why? A sudden surprise can disrupt the dynamics of a negotiation. Andrea: The doll is mine. This time. (In a few minutes. the fighting starts up again. Just share the doll. you have it when we drive home. Andrea: Okay.) Dad: Stop it right now. Their dad tried to reason with them. I took it out of the box. and Susie. the little girls began to fight over the doll. Susie: Okay. About an hour into the drive. the girls had been fussy. Andrea. Andrea had taken them off the doll. We’ve got a long ride ahead of us. Consider making a suggestion or a proposal that completely surprises your opponent. but use this tactic judiciously. Mom said so. and Susie hid them under the seat. and I can’t stand it. the argument is over the doll’s shoes. because you will probably only get to use it once. Tell Susie to let me have it. The doll can be shared.
The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation.Andrea: Give me the shoes back. they didn’t say another word. but nothing else up to that point was working. The tactic was so successful. Daddy said I got the doll on the way to Grandma’s house. to no avail. (They continued to argue and whine and pinch each other. He grabbed it and threw it out the window. charging that they breached their duty in their handling these funds. so it was worth the risk. Conclusion Dad’s use of a “surprise” tactic was extreme. in fact. I think I have acted properly. Dad tried correcting them a few more times. at great expense to the auditor’s office and the school board. The local newspaper was prepared to urge the auditor to end the litigation. Both Andrea and Susie were so shocked by their dad’s action. and I hope I can convince you of that. he slowed down. She can have them later.) Dad: Now there’s no more fighting over the doll. The auditor asked to meet with the editor to explain his position. and reached back for the doll. Dolly doesn’t need shoes on in the car. Susie: Daddy didn’t say anything about the shoes. Dolly has to have her shoes. The defendants contended that the auditor’s actions were politically motivated. Finally. He initiated the litigation against the local school board members and several banks that invested the money for the board. 144 50 Practical Negotiation Tactics . and that they had invested and spent the tax dollars wisely. The litigation itself had been going on for more than three years. 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. I want the shoes.
I guess we’re finished here. Your reporters will probably want to follow up on it. That’s really the reason this has gone on so long. Obviously. there’s just nothing to back up your allegations. I think I have something here that will convince you otherwise. but I have to warn you that from what I’ve seen and heard so far. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. Here are the papers. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. Editor: Well. one of the banks settled with my office. This morning. this case needs to be dropped. as a matter of fact. perhaps you should just cut your losses—and just drop the suit. I really think the community would be better off. Applying Pressure 145 . the bank would not have done that had we not proven our case. Conclusion The editor wrote an editorial urging a resolution for the good of the community. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. They’ve been making that same argument from the beginning. Auditor: Well. Editor: Well. and a significant amount of money will go toward the tax fund. Thank you for coming in. but recommended that the parties reach a settlement.Editor: I’m certainly willing to listen. rather than drop the case. but actually superior to some other entities you supervise. and it is costing your office money and good will. We believe the other defendants will soon follow suit. They are very persuasive that this is just a political battle. From what I can see. Auditor: I appreciate their arguments.
Kevin: So am I. night after night. I can remember spending hours playing with my friends and family when I was growing up.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. they’ll be mobile! The last thing I want is for them to be out cruising around. although getting your license and getting a pool table are connected. Kevin: I don’t really care about a pool table. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Dad. I’d 146 50 Practical Negotiation Tactics . you might be able to dilute their power by identifying their different interests and addressing them separately. Tina: I’m really against this pool table idea. Mike knows he needs to get either his wife or his son on his side. especially Kevin. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. 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. I know we’ll all enjoy it. Mike: I know. but I think it will get a lot of use. and a car is more important to him than a pool table. Tina and their son Kevin are against the idea. If the other side involves more than one person. Kevin is against it because he is turning 16 years-old soon. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. 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. I want to talk about a car! Mike: It’s really not one or the other.
She noticed that Jim (another member of the union’s negotiating team. 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. I thought we were making real progress. They bought the pool table. don’t you think you guys would use it? Kevin: I guess so. the chief negotiator for the company. the head of the union negotiating team. then maybe it’s not such a bad idea. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. and Kevin and his friends use it often. she joined his side of the debate. has just presented the company’s initial wage offer. only Kevin did. But I’m not going to hang out here all the time. Tom. Instead of both opposing the idea. Tina: Well. What happened? Applying Pressure 147 . Conclusion Mike found an argument that divided Tina and Kevin. Kevin. some. Mike: I really do. received it without comment.like them to hang out here more. Wylma: Tom. 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. A number of contract changes have already been worked out and Wylma. A pool table could attract them here. Here’s how the negotiations went. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. I’m surprised. Once Mike convinced Tina of the idea’s merits.
Tom: Wylma: Nothing happened. Jim? Jim: Yes. but he added some workplace changes that Wylma was comfortable negotiating. you’ve seen our sales projections and production costs. Wylma distributed copies of financial data that showed the company’s current condition. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. Right.) Wylma: Now Tom. This is just what we think is fair. these are accurate. I think you need to rethink your demand. (When they resumed. you certainly are aware of our financial situation. Let’s start again tomorrow morning. as Jim can point out to you. you’ve heard our demand. forcing them to reconsider their demand. Tom: We don’t think so. Wylma: Tom. When the negotiations began again. these are our actual accounting figures. Do you think this is reasonable? Jim: (looking uncomfortable) Well. 148 50 Practical Negotiation Tactics . Tom had reduced his wage demand significantly. Wylma: Let’s take a break. Wylma: Jim. But Tom. Your demand is totally unreasonable.
Cory: Madison. so pressure grew to draw names and exchange gifts.Tactic 38: Break the Tension Tension is inevitable in most negotiations. it was easy to agree on just giving presents to the children. and it makes me very sad. but it should never be at anybody’s personal expense. married. I want to say something. That will just make a bad situation worse. get over it. Madison: Okay. so you can find a way to quickly neutralize it. and had children. Example 1 The four Jones kids grew up. the oldest and youngest Jones children. but as the children grew up and had families of their own. Tempers flare and people say things they shouldn’t out of anger or frustration. Applying Pressure 149 . Humor often works to break the tension of the room. When all of their children were small. some of the siblings decided they liked giving presents to one another. I don’t feel Christmas in the way I used to. You are almost 40 years old. We can’t afford to buy each other things we really need. Sometimes the argument got heated. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. When are you going to grow up? Madison: (very emotional) I can’t believe you can say that to me! Christmas should mean something! Cory: It’s just silly for adults to exchange presents. but the thought that matters. Ever since Mom and Dad died. so what’s the point? I don’t need another tie! Madison: It’s not the gift. but it is really important to me. Stay alert and watch for clues that a negotiation is about to get out of hand. especially between Madison and 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.)
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.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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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.
and that doesn’t happen without compromise. Example 1 Julie and Dara both attend a local preschool. or maybe tomorrow. Then we can color. When that point is reached. The day-care worker wanted to take them outside for a while so that he could visit with his friend. the individual might be afraid that the exchange isn’t equitable). I want to play “Prince and Princess. who was outside with older children. 154 50 Practical Negotiation Tactics . At some point.” but she needed Dara to play with her. Julie wanted to play “dress-up. was ready to color. how about going out to the yard for a while? You can swing or play ball.: Julie: Dara: Julie: Girls. Dara. Okay. I want to play “Princess” and I want Dara to be the “Prince.” Dara. C.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. If I can be the Princess. but since the other children in their room were not there. Both of the little girls liked to play ball when they were outside. 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. If there is resistance to compromise. Isn’t it “later” yet? Right now would be a good time to go outside.” Can I color now? You said we would color later. the exchange will be between things of equal value. they were the last children left in the playroom for the remaining two hours of the day. One day. Mr.: Julie: Dara: Mr. don’t you want to play? We could color before your mom comes. it is better not to compromise. (In a successful negotiation. they would have to play ball with older children. each side must decide whether or not one more compromise will produce an agreement that they will later regret. C. not the Prince. however.
the parking lot will start to look trashy. We don’t want to go outside. According to the city’s zoning laws. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot.” No. however. or apply for a variance. Conclusion The children stayed inside and played dress-up. you can come back in and play “Prince and Princess. The existing parking lot didn’t meet the current parking standards for that size theater. C. 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.Mr. 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. neighbors became concerned about the changes to the mall. and they still had time to color. When his variance application was made public. C. wouldn’t you like to go outside first? After you swing for a while or play ball. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces.: Julie: Hey. 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. Mr. failed to offer the children something that was as important as the plans they had made. We want to play dress-up and then color. They did all the compromising they were willing to do. and teenagers attracted by Making Progress 155 . The owner decided to try for a variance. The owner and a small group of neighbors met to talk about these problems.
not having direct access to the south lot from the street would be unworkable. and break in his door. In fact. Not having in and out traffic to the south of the mall is just not very practical. You could have all of the traffic enter from the north lot. We hope you’re right. with your plans to put the entrance of the theater on the east side of the mall.the theater will start to hang around and maybe wander around our yards at night. driveways on the south side of the mall are along the east and west side of the parking lot. as you said. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. We’d really like to block off that cut-through and have the theater face the south. if I agree to move the theater entrance to the south side. and we’d like to keep it that way. I’m afraid. only when that lot is full would cars come around the mall and park on 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. even though I’m not adding any parking. And. What if I changed the entrance to the middle of the lot? That way. Many of our homes back up to that lot. the south parking lot has not been used much. the north lot is used more. We’re just not convinced. Right now. With the Comedy Club and the grocery store on that end. Right now. but it’s not ever full. I could put a privacy fence along the east and west—at the backs of your yards. The neighbors: Owner: 156 50 Practical Negotiation Tactics . All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. We’d like you to prohibit cars from entering or leaving from the south lot. the closest parking to it is along Elm Street. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. So.
and they discouraged patrons from parking on neighborhood streets. then will you agree not to push for increased private security? Yes. But you’re going to have to have some kind of security as well. put a privacy fence along both the east and west sides of the south lot. Agreed. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. And a year after the theater opened. If the fence was set back the width of a driveway onto your property. The compromises were what everybody could live with. add a new entrance into the south lot. Now you’re talking about considerable expense. the neighbors reported that they were very happy with the way it all worked out. there could still be access from the street to our garages—just not to the main parking area. set back a driveway width. The fences created a buffer from the lights and noise. Teens can form into gangs if left unwatched. If I agree to move the theater entrance to the south. and make sure the parking lot is kept clean. Conclusion Both sides had to give up something on certain items in order to reach agreement. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. however. Making Progress 157 .
just forget it. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. thinking that you will be just as easy to work with on the sticky issues. The dog was Mrs. but going out of your way to be friendly is an especially helpful tactic. Lonely: If you’re here to complain about my Rocky. Mrs. Lonely’s only companionship.m. she just didn’t think it was a serious problem. Joan: Hi. because you are the one to set the tone for agreement. Present your position forcefully. Lonely. and pleasant always enhances one’s ability to reach an agreement. Joan was already pretty tired. 158 50 Practical Negotiation Tactics . She learned that everyone in the neighborhood had complained at least once. and started to get upset. This gives you an advantage. Example 1 Joan was new to the neighborhood. but be friendly. and because she was hard of hearing. 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. I’m Joan. She didn’t believe her neighbors ought to complain about the barking. professional. and that as angry as they were. respectful. Your opponent might give in readily. Joan had a new baby. and what kind of complaints might have already been made. Close your windows at night and don’t listen. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. If your opponent is aggressive or angry..m. They might even start to underestimate your negotiating skills.m. Mrs. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. they had gotten nowhere. Joan decided to at least try and talk to the neighbor. and didn’t stop until 6:00 a.Tactic 40: Be Friendly Being polite. so her neighbor’s barking dog came as an unpleasant surprise. and I just moved in next door. incident was usual or unusual.
(Joan’s sleep was disturbed by another night of barking. I’ve only got my Social Security.Joan: Mrs. I guess that would be okay. No. sure. no.) Hi. Well. Well. How long have you had him? Almost eight years now. I’d like to introduce you to my new baby. I’ll see you. Lonely: Joan: Mrs. too. not at all. then. The barking at night has been mentioned to me. by the way. Lonely: Joan: Mrs. I might have to talk to you about Rocky. it’s probably because they just haven’t had the time to get to know him. but she took her baby and went to visit Mrs. Making Progress 159 . I guess so. Here’s my little angel. I can’t pay for something like that. Lonely: Joan: Mrs. I stopped by and visited with him over the fence this morning. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Why. I’ve got a friend who is a veterinarian. though. Lonely: Joan: No. I know that some of these people around here don’t like him. When he does. I need to get the baby home. Lonely: Joan: Mrs. Who. I just wanted to come by and introduce myself. don’t worry about that. He’s a real comfort to me. I sure hope he starts sleeping through the night soon. He’s been keeping me up at night. Lonely again. Do you think his age has contributed to some of that? You know. is a really sweet dog. Mikey. isn’t he cute! He’s a handful. Maybe I could come back tomorrow and bring him? Oh. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice.
Lonely didn’t have to pay for the medicine she could not afford. overseeing a factory in Mexico and selling products in the states. its 150 management and sales employees could continue to work in Happy City. Lonely and Rocky. When he heard the news on the radio. I think that if you could have let me know ahead of time. of course. After Joan’s veterinarian friend visited with Mrs. Here’s how the meeting went: Company ZZZ: We’re very sorry. he prescribed medicine that gave Rocky a more regular sleep schedule. recognizing that the layoffs would be an issue in upcoming local elections. U. 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. Joan took up contributions from the neighbors. Lonely’s needs and arrive at a workable solution to the problem. agreed to meet with the mayor. Company ZZZ: (surprised) Well. and Mrs. Hearing about this from the press obviously puts you in a very embarrassing situation. that’s very understanding of you.S.Conclusion Joan’s friendly approach enabled her to understand Mrs. you would have. the mayor called and asked for a meeting with Company ZZZ officials. that the press got hold of the story of our company’s activities before we could call you to let you know. 160 50 Practical Negotiation Tactics .. It’s very difficult to make a move of this type without having it leak out. Under its new corporate structure. Company ZZZ. The barking all but stopped. Mayor: (very friendly) I understand how these things happen. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. They anticipated that it would be an unpleasant meeting.A.
Company ZZZ: I’m not sure what to tell you on that. the city has a potential buyer for your plant building. the 150 management/sales jobs did end up moving to Mexico. and I want them to know that. so we need to understand how we can affect their decision on keeping an office here. You’ve been very understanding about this. We just haven’t heard anything yet. and the mayor was reelected. 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. because I’d hate for us not to make an appropriate pitch to them. By the way. 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. This strategy worked. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. They need a really good deal on the plant price.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. Making Progress 161 . or would we need to involve the Malaysia group? Company ZZZ: Certainly. Mayor: Please let me know as soon as you can. Unfortunately. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. Would you be in a position to talk to me about such a deal. Mayor: Great! Let me know when we can talk again. The buyer is a “disadvantaged business” we have been working with for some time. 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.
Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Susan understood the impact a tape recording can have when it reveals a lie. Alexis agreed. Then he played the tape. age 14. are talking about a possible settlement of the issue. Alexis knew this was not fair. the accused. Jones’s supervisor. Somehow. The two sisters had saved up a little money so that they could buy souvenirs. Alexis then played the tape for her father. Example 1 Susan. Susan repeated her demand. but Susan had only $20. until Susan said they would evenly split what they bought. They might worry that the tapes will be made public or given to others. had $40. or simply “bad faith” methods have been used by the other party. Fred Adams. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. Conclusion For the first time in her life. and Alexis. this time in front of a hidden recorder. were on vacation with their parents in Myrtle Beach. South Carolina. He asked his elder daughter about the arrangement. The effect on the other party might be even more substantial if lies. thus becoming a source of embarrassment. and Jones. Susan denied it. or used to pressure the other side to agree to certain demands.00. 162 50 Practical Negotiation Tactics . She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. age 15. threats. the investigator.00 to spend. the younger sister.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. Michael Wood. She borrowed a tape recorder so she could ask her father if this was a fair deal. who was disappointed to hear that she might propose such a deal. Alexis.
Making Progress 163 . Well. And please describe your general manner. But by refusing to repeat his answers. I simply asked her to make copies for me as quickly as possible. No one could have possibly misunderstood your intentions? No reasonable person. you are aware that the next step in this process is to ask witnesses to come forth.” meaning something other than copies? No. Stuart. exactly what you said to Ms. Jones. Mr. I’ve brought a tape recorder with me. (a long pause) I want to see my lawyer. Your request.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. So. “Do what I want. Mr. stares. Appleton both claim they saw the incident and will testify. I think I can write my recommendation. He failed to think about what might be the next step. Ruiz and Ms. he also lost his negotiating position. When Adams set the tape recorder on the table and revealed that he had witnesses. to quote you. And you did not threaten her job if she did not. You never touched any part of her body? Not even accidentally? No. Jones suddenly realized that his strategy would not work. Conclusion Jones had knowingly lied when he denied the charges. and gestures did not have a single hint of sexual implication or innuendo? None at all. So you refuse to repeat the answers you just gave us? Yes. and now I’ll ask you to repeat your answers—on tape. Starr.
Many of us learned this one from our parents: After two people agree to the strategy. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . Oh. Realizing the potential of getting the “smaller half.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. Maria. take this knife and slice the Snickers into two halves. because you did the cutting. Roberto will get to choose which half he wants. the classic “split and choose” tactic might be the best way to settle the issue.” the divider. of course. Maria and Roberto: No. Their dad instructed them to share the candy bar.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. is usually careful about dividing the object into two equal parts. The second person then chooses which of the two parts they will receive. with the remaining part going to the person who did the dividing. one person is given the task of dividing the object(s) into two parts. which certainly is large enough (he naively thought) for two young children to easily share.
Conclusion When two people desire the same object and it is something that can be divided in some way. even children. That makes them more desirable. Archie is ready to build a retirement home on the property. according to county deed restrictions. Give me the map and a pencil. but is not sure how to arrive at a fair split. Archie: I really don’t care either. and wants to divide it into two separate parcels.000. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. Clarence and Archie. both parties. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. I don’t really care which lakefront lots I keep. quickly recognize the fairness of the divideand-choose method. Then I will choose which parcel I want. I propose that you divide the fourteen acres into two parcels that you believe are about equally desirable: one parcel with three lakefront lots and the other with four lakefront lots. Archie: That’s true. Archie: Here is the map. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. so we should be able to divide the property fairly. They have a recent appraisal that values the property at $150. They all have a great view and are equally desirable to build on. Deal? Clarence: Sure. Making Progress 165 . jointly purchased fourteen acres of lakefront property several years ago. Lots must be at least one acre to be developed. that sounds fair. The problem is that one of us will get four lakefront lots and the other will only get three lots. Example 2 Two friends and business partners. There is only one place for an access road that must serve all lots. Clarence agrees to divide it. Clarence: Right.
and the second parcel with four lakefront lots and one other lot. and both men were happy with the arrangement.Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. Which would you have chosen? 166 50 Practical Negotiation Tactics . Archie chose the parcel with the three lakefront lots.
attach legs. His tactic was to throw in a “nickel” in order to make lots of “dollars. With a great deal of effort. What started out as a single issue is now a combination of a major issue and a much smaller issue. delivery was limited to a small geographical area.” Many people have witnessed or used this effective negotiating tactic. so the salesperson delivered the suite himself. “Okay. we’ll take the suite if you’ll throw in free delivery and set up the furniture.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. 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 . etc. Conclusion The amount the couple spent was fairly large.” Under store policy. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). and the delivery carrier doesn’t set up mirrors. Jason was having a hard time getting the salesman to lower the price. miles from their home. Her husband Jason. However. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town.” thus extending the scope of the negotiations. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. is expected to dicker over the price. he also set up all of the furniture in a second-floor bedroom. Brenda did her part when she said.
we’ll agree to Health Plan A with another ½ cent on the pension fund. In one case.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. so be prepared to withdraw the nickel and dime item at the hint of trouble. 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. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.important item. it can be a dealbreaker. This experienced bargainer said. “Okay.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. 168 50 Practical Negotiation Tactics . If one party misjudges the situation. At the end of negotiations.
I’ll take the color TV. Kathy: Then I’ll take the couch and love seat.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Donna: No way! These are the last two pieces of furniture. You can go first. Donna: I’ll take the bar with stools. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. This creates what is called a “halo effect. but they are two pieces of furniture. 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. or knowledgeable. decision-making meetings. trustworthy.” 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. Kathy: But they are a matched set. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . Donna: Okay. and all the rest is small junk. Donna: They match. People tend to make an effort to put their best foot forward. Kathy: I suggest we take turns choosing which of these things we want.
The union negotiators. 170 50 Practical Negotiation Tactics . and ask him if the couch and chair should be one item or two. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. and if the bar and stools should be one item or two. What for? Tell him the situation. I trust his judgment. Example 2 During a heated labor negotiation. with a record of labor involvement that included three recent strikes. I want the love seat. He might or might not have also been a good arbitrator. (Pause) We’ve got to settle this today and get this stuff moved. I want the stools. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. He’s our cousin. Let’s call Johnny Ryan. what can we do? Give me the couch and love seat! No. Good idea. Johnny had the “halo” of an honest person. and he has always struck me as an honest person. 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.
They might have stretched his halo farther than his expertise and experience warranted. when negotiations again stalled on a retirement plan issue. the management team hired Sam Boston. and that he did. On Monday. the former union president. thus bringing the negotiations to a conclusion. Conclusion The union leaders gave Boston a great deal of respect (even in areas such as budgeting and actuarial tables) because of his former position. This time. The teams took a weekend break from the stalled negotiations. the city management again hired Boston. Two weeks later. but the power of the so-called halo effect was great. as a consultant to review their proposal. the consultant did not speak. even if the proposal appeared to be valid. During the break. Making Progress 171 . He said he believed that it would work as presented by management. but his mere presence caused the union leaders to accept a management point as valid. Boston was widely known as a totally honest man who speaks his mind. Boston went to the negotiation table with the management team. The union accepted the proposal. without any reservations. He solemnly told the union negotiators that he had been hired to review it.simply did not trust the management team.
The owner. This offer is for more money than any four-bedroom houses on this neighborhood list. but you’ve priced it way too high. They sold for: $225. but the right facts presented at the right time can chill or astound and completely turn things around. the other party will ignore or refuse to believe the information. $235.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000. $237. Here’s a list of the five that are about the same size as yours.000. Sometimes. but we feel that it’s a fair offer.000. but the key is to gather facts that you might need—not just the facts that you will need. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.000. 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. We love your house. has owned the house for 24 years and is downsizing to a condo. $229.000. (Next day) We’ve reviewed the records you’ve produced.500. and we are countering with an offer of $250. Sam Jones. They believe it is overpriced. I’ll get back to you. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000 under the listing price! We realize that. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . What? That’s $35. and $237.000.
000. The last 20 were over $2. He found facts that supported his position.400 each. You can’t pay more than $1. Here it is. Well… We have a written counter of $245. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. let’s not worry about it. Order the new computers.600 for a computer. and we know that only this model will meet our needs. Hatfield: While I was at purchasing. We accept. Supervisor: If I okay this purchase order.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. if other departments have ignored the policy.000 each. Example 2 Supervisor: You know the policy. That’s the bottom price. I asked for a list of all new PCs bought this year. and did his homework. No one can go over $1. Making Progress 173 . Supervisor: Well. We’ve talked with purchasing and we have the authority to buy seven for $2. who was not particularly knoledgeable about real estate.600 unless the company president approves. Conclusion The Joneses had based their asking price on the advice of a friend. I’ll be… Okay. and wisely chose exactly when to present them in order to make his point. Conclusion Hatfield had anticipated what his supervisor’s position would be. I’ll get called on the carpet. Hatfield: My staff has done a lot of research.
A maximum of three books can be checked out to a person at any one time. Would I do that? Jenny: Maureen. I can do that within the rules. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. some people would have forty or fifty books out at the same time. Maureen: So you trust me with the books. If you trust me. Maureen: Well. but you don’t want to jeopardize your job? Jenny: Yes. Maureen: Well. 174 50 Practical Negotiation Tactics . and they would all be unavailable to others. But I can’t break the limit rule—it is an absolute rule here. reveal misperceptions or lack of knowledge about positions that can be corrected. you know me. I can’t check out these four books? Jenny (Librarian): That’s the policy.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. They can help you identify or better understand what the other side really wants. and two are for my husband. yes. Maureen. The effective use of probing questions can help achieve a favorable settlement. I want two of these. can you check out two on a card for him? Jenny: Well. Example 1 Maureen: What. I trust you. but I don’t set the policy and I can’t make exceptions. Otherwise. I’m sure you would not.
I couldn’t find anyone who knew it. Why? Some policy? Yes. Can you get me the number? Sure. Babu. Who does have access clearance? Mike. and they don’t even have a use for the sales data. What’s the policy number or date of approval? I don’t know. but it’s because you don’t have access clearance. If that data ended up in the wrong hands. Brooks. we can’t do that. Making Progress 175 . it could kill us. Mary and Kenzie? They are 2-3 pay grades below us. They say it’s a security issue. Sue. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. But this forces us to make decisions without complete information! Yes. are you sure I can’t get your information technology people to give us direct information on product sales? No. Mary.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. Jay. (Next day) Do you have the policy about giving out product sales information? No. Security? Right. and Kenzie.
I’ll sign now. When can I get the data? Mark: Today.P.Mark: Well. Jack: Can you ask your V. Once he discovered that employees in lower pay grades had access clearance.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. 176 50 Practical Negotiation Tactics . His probing questions turned up a critical fact. if we can have access? Mark: I guess so. Jack was able to receive clearance as well. that’s been the policy since I’ve been here. I’ll get it for you ASAP.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. Jack: Here. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy.
and the classic Walk Away (Tactic #48). If friends or neighbors need to settle something but prefer to avoid the negotiation process. 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. In this process. hours. this process can easily result in a final settlement. this tactic can produce an agreement. When two parties believe they have an oral agreement. They bring it out when a dispute arises. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. and the child learns an important lesson about life. T Reaching Agreement 177 . 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). 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. 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. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. or even months after the first offer is presented. When multiple issues are at stake and most have been agreed upon during negotiations. days.Stage 7: Reaching Agreement he final stage! It might come minutes. 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.
Larry Snyder gets bored staying in any one place for many days. 3) and adds one last key demand to the congratulation sentence. They both have stressful jobs and look forward to their annual vacation together.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. D. off-again discussions. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. She said. 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. “I’m thinking of agreeing to your plans for vacation. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. His wife had carefully planned her exact “premature” vacation agreement.C.C. As he hugged her.” Conclusion The husband was so excited about visiting Washington. After days and weeks of on-again. 2) allows the other side to feel the release that comes with completing the bargain. but his wife Nancy likes to stay put and relax. Let’s do go to Virginia Beach and Washington D. Example 2 Negotiations can take a long time and incorporate many issues.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. Nancy brought up the subject of vacation again after dinner.
” Bob: Ted timed this perfectly. symbolizing that he was agreeing to the entire final offer. Ted said. My team had convinced me that doubling the time frame would create a real problem on the shop floor. (This is a bad position to be in. but also that they sensed the weariness of my team. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. One operating issue involved the probation period for new employees. Reaching Agreement 179 . and rested. There were grins and handshakes coming from the other side. but we agree to everything in your final proposal…” Members of my team shouted hooray. I felt the tension in the room. We all knew that it could come down to agreement or strike. The celebration had begun. he turned on a large warm smile and extended his hand to shake. but the other side continued to ask for 60 days. When the chief negotiator emerged with his team and headed toward my team. we made some small concessions on financial matters. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. but acceptable. but held firm on remaining operating principles. My team was afraid we would not even come to an agreement. fit.almost willing to accept any deal. One of the best pieces of negotiation advice is to remain fresh. The old agreement specified a 30-day period. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes.) Here’s what happened: Bob: I knew that the other side was similarly harried. However. as the negotiator came closer. Therefore. It was so close. “…as long as you give us a 45-day probation period. In our last offer. “It was hard for us. because it makes you pretty vulnerable.
knowing that it will probably be agreed to in order to continue in the euphoria of the moment. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. However. 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. 180 50 Practical Negotiation Tactics .
I like it. Sue: I remember you. how did you like it? Jay: Okay. and he can simply buy it when the lease expires. Jay.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. (Vahaly drives the new Highlander home. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. Whether you are really bluffing or you are serious.) Jay: Sue. right? Jay: Yes. The next morning. My name is Jay Vahaly. here are your keys. You had time to assess my car. Sue: Well. the following exchange occurs. He stopped by Pembroke one day to look at the new models. but I thought I might want to try a new Highlander. all from Sue Wilson. if I roll over the lease to a Highlander. a veteran salesperson. I’ve worked with you before. I don’t want to negotiate. but my Avalon is a good car. be sure you think this through beforehand. You bought your wife a new van just last year. Your opponent will have to either let you go and run the risk that things are really over. too. and the lease on my Avalon is about to expire. Jay. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. Jay: Hi. or go after you and perhaps make a new concession in order to get you back to the table. He really likes it. but his Avalon has been a good car. what can you do on a 36-month lease? Reaching Agreement 181 .
Jay accepted. (Jay got in his car and drove home. They’ve talked about retiring in recent months. but 182 50 Practical Negotiation Tactics . Jay. I thought I’d get a fair deal.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. That was the figure he was looking for.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. they came down to $199 more on a thirty-six month lease. Let me try again. at most. Sue: I’ll try. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Jay—wait. Jay. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. These Highlanders are hot items! Jay: Well. Jay: What? I was thinking the lease payment would be. He effectively used the walk-away tactic to let Sue know that he was firm on the price. I’m disappointed. Sue: Sorry. (He walks away) Sue: No. Please go back and work out a lower lease payment. $100 more. He was prepared to keep his Avalon if the lease was even $1 more than his limit. Sue called him as soon as he walked in the door and offered another $50 break on the lease. (15 minutes later) Sue: Well. a successful musical instrument sales and rental store.
5 million. but their continued walkout convinced Michael that they would hold firm. You rejected it. our accountant said it’s worth $6 million. and I only need your building to own it.both of them love their store. today. Larry: Judy. and we gave you our price. Reaching Agreement 183 . which the Bizannes accept. visited their store.0 million. Larry. Michael calls on them again with a check for $5. a local developer. Larry: Yes. Judy: Larry. let’s eat lunch. Two months later.) 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. they were prepared to accept $5.) Larry: Michael is here again. What do you think? Judy: Larry. you’ve already told us that. and I’m not interested in less.5 million. Larry: Michael. go back to your office. In reality. after no contact from Larry or Judy. so why are you here? Michael: I’ve discussed it with my partners.5 million for the building. (Judy and Larry walk into the back room and close the door. Michael: Good morning. How’s business? Larry: Great! I’m surprised to see you again. and I’m prepared to offer you $4. He met with Bizannes twice before. come out here! (Judy comes out from the back room. Larry. Michael: Well.5 million. I still want to develop this block. Michael: I have a check right here for 4. with a certified check. Michael Roberts. One day. and he is offering us $4.
Jenny: No.000. I offered it to you for nothing. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. In ﬁnal offer arbitration. Both involve the use of third parties who are objective. In mediation. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. I won’t take it. Lynne: No. and would be able to restore hers as well. Jenny told them to sell it. Lynne responded that this was their intention. but they wanted to give Jenny $500 for her “share” of the machine. Jenny has an antique Singer sewing machine. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. 184 50 Practical Negotiation Tactics . both sides have agreed in writing to accept the arbitrator’s decision. Lynne and Gary bring the restored Singer to Jenny’s house. which is generally voluntary. In most arbitrations. which she has kept in a barn for over ten years. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. Example 1 Jenny and Lynne are sisters.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Keep the $1. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Six months later. They inform her that they put the machine on e-Bay and have an offer of $1. We have a few dollars invested in parts and we had fun working on it. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). That was the deal.000. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. In arbitration. Each party wants their offer chosen. Lynne told Jenny that she and her husband Gary have restored two other Singers. Let’s split the money. One day Lynne dropped by for a visit and the discussion turned to the old Singer. 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).
Ralph: I know. Tina: Good. Tina: Yes. Example 2 Ralph: Well.Jenny: Dad: Okay. The union’s position could have run into millions of dollars. we are down to only three unresolved items. Then we both submit our final offers to Judge Ryan within 48 hours. Any increase in value was due to the work of Gary and Lynne. I have chosen management’s offer to keep it as it is under the current contract. Tina. on Friday. I can’t see any way to reach an agreement. Their father found Jenny’s position to be the most reasonable. They should get the other $950. after six weeks of negotiating. (One week later) I think Jenny’s position is the most reasonable. and meet back here in 72 hours—3:00 p. first on the health insurance co-pay. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. so I am invoking the finaloffer arbitration ground rule we have in place.m. I’ll buy that. As a brief explanation. he did not need to “haggle” with them. My troops are getting restless.) Judge Ryan: Here is my written. the old machine was only worth $50 when Lynne hauled it away. but we’ve made no movement on any of them since we started. At best.m. Ralph: Right! (Friday at 3:00 p.” Lynne proposed a 50-50 split. binding decision on the three items. since he could only choose one offer. based Reaching Agreement 185 .
Second. I’m sure you realize that we could have taken six more weeks to reach the same point. but we agreed to this process. on the clothing allowance. At least we both saved time. and peacefully finalize a contract that contained several important gains for both sides. money. and an item that large should have been negotiated at the table. It will only cost $120. Finally. 186 50 Practical Negotiation Tactics . Ralph. nor why their method was superior. I’m not happy with your decisions. I have chosen management’s offer because the union did not justify why the past practice should be changed. No increase has been given for six years. reasonable resolution to their last three unresolved issues.000—less than 1 percent of the total package.Ralph: Tina: on last year’s data. I have chosen the union’s final offer. on the merit pool distribution method issue. Conclusion The final-offer arbitration process enabled the parties to gain a fast. Well. and stress. Now let’s get a signed contract.
however. Seller: Yes. Bill: Reaching Agreement 187 . Seller: We’re asking $152. They saw the “For Sale” and “Open House” signs. 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. they looked at this particular house on their own. At the very least. and while Bill and Paulette had been using an agent to help locate houses. They were not the only couple to come to the open house. and one of the other couples looked very interested.000. 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. Bill and Paulette fell in love with the house. Example 1 Bill and Paulette had been house-hunting for some time. and decided to stop by to see if they liked the house. not the furniture. 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. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. If we shake hands on it right now. They finally looked at a house they really liked.000. Obviously. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. everyone is busy grappling with the details of the negotiations. we won’t be involving our real estate agent. During a discussion. The owners were selling the house without a real estate agent. We’d like to make you an offer of $150. all the usual stuff in a sale. Bill pulled the seller aside.
Conclusion The seller had always intended to leave the garbage disposal. (The seller recorded the offer of $150. but I’d like to make sure there are no misunderstandings. the hutch. he listed an attached hutch in the kitchen. When he had the chance to put the deal in writing. then we have a deal. Bill: (pleasantly surprised to learn that the garbage disposal. The supervisor assured the employer that there was no basis for her complaint. he listed the stove. she said that her supervisor had repeatedly asked her out.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse.) Seller: So. In her complaint. Seller: Okay. he left the price at $150. Example 2 Monica brought a sex discrimination charge against her employer. In the section for fixtures and miscellaneous items to be left on the property. Under the section for appliances to be left on the property. the refrigerator. since he probably would have missed them) Yes. 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 that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination.000. and when she refused. and that the problems with her job performance were. the hutch. a public agency. Sign here. that’s what I meant. Let me just get the standard “offer of sale” form and fill out what I hear you saying. and the two area rugs. real. It worked. look this over. If it’s what you meant. and two area rugs. the house is yours. The supervisor pointed out that he had a staff of 20 or so women. I think we can work something out. and the garbage disposal. in fact.000. and the two area rugs were specifically included. and had been prepared to drop his price to $145.Seller: Just a minute. all window blinds and drapes.
Look. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. and expensive matter. by this time. It might be standard when there’s a settlement. But the employer doesn’t want to go through the expense and publicity of a trial. 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. And the confidentiality clause is standard.000.000. and must agree not to tell anyone about the $100. settling—What difference does it make to her? She’s getting her $100. You’re just trying to make it seem as if your supervisor did nothing wrong. 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. then Monica had to acknowledge that the supervisor did nothing wrong.000. drawn-out.there was little basis for the complaint. He’s happy to prove that in court.000. The supervisor insisted that if the employer felt he had to settle. even though you are paying Monica because we can prove he did do something wrong. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. even though we’re certain we would prevail. Why’s that? Well. I’m He: She: He: Reaching Agreement 189 . He offered to send settlement agreement papers to her. Withdrawing. my client is supposed to formally withdraw the complaint rather than just settle it. but said that fighting the charges would be a long. you didn’t mention in the agreement that in exchange for the $100. but it’s not standard when a complaint is formally withdrawn. Monica had.000 without actually having to prove anything.
000. There was a confidentiality agreement.000 just to get the employee to “withdraw” the complaint.000 and the conditions of the offer.000 when all that was asked for was $100. I’ll take your offer back to her and let you know. to his disadvantage. It was made clear that the employer had paid the additional $100.She: authorized to pay $200. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. 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. 190 50 Practical Negotiation Tactics . Monica accepted the $200.000. but word did get out that a public agency paid $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.
In Tactic #17 (Package Items). “That may be what I said. when they engage in honest “give and take” negotiations. most certainly needs to be in written form. reaching an agreement is sometimes a long and difficult process. it is much more effective in the long run when the parties enter into “win-win” agreements. Certainly someone has said to you. As these examples of personal and business negotiations show. Unfortunately. However. “Oh. Think of how often you have said to someone. but it was not what I meant. I thought you said something else. operating under an agreement after it has been reached can be even more difficult. rather than attack each other. and when they agree to solve problems together. it would have been easier to resume negotiations at a later date. of course. depend on the kind of negotiations in which you are involved. a written document is hardly necessary. then the parties have to abide by the agreement.” By the same token. When two friends agree on what movie to see.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see.” Clear communication is essential if you want to reach an agreement and have it abided by. The degree of detail and formality of a written document will. commitment. Putting the Agreement in Writing 191 . even an informal agreement benefits from some type of written documentation. If the agreement reached at the time had been put into writing with all three sisters signing it. however. One way to help the parties abide by an agreement is to put it into written form. Reaching an agreement is the first step. talking is not always the same thing as communicating. and contract. A union contract. but some of the decisions were put off for a couple of months. the three sisters reached an amiable agreement. Putting an agreement into writing serves three purposes: communication. A Communication Hearing is not necessarily the same as listening.
Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. or express a thought or emotion through words. If Jason fails to live up to his side of the deal. a couple of months away. or movements. or movements being used by the sender. 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. And because the sender and the receiver are two unique individuals.Communication is a process that involves a sender and a receiver. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. The receiver has to decode the message being sent by trying to understand and interpret the words. When you create a written record of the details of an agreement.” In Tactic #14 (Don’t Always Hide Your Weaknesses). The sender wishes to convey an idea. 192 50 Practical Negotiation Tactics . Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. he can be reminded of the details because it’s all there in black and white. His mom could more easily enforce the agreement if she had it in writing. Who isn’t excited about buying a brand new SUV or truck? Until. you have created something tangible that can be referred to in the future when memories become fuzzy. sounds. sounds. pictures. pictures. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. the price is spelled out in the loan document as “twenty-two thousand. seek information. that is. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. In Tactic #4 (Use Objective Criteria). the message being conveyed and received might be understood differently.944. nine hundred and forty-four dollars—$22. When communication is limited to the spoken word only. 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.
which. as many people learn when they purchase a home. Your spouse will share some responsibility for failing to make that duty clear in the agreement if.Contract Finally. one party will work if the other party pays for the work. say. If you have agreed to pay someone to house-sit while your family is on vacation. and getting all the parties to sign it usually creates an enforceable contract. Putting the Agreement in Writing 193 . leading to misunderstandings and contract disputes. Generally. protect yourself by having a written. or it isn’t an agreement—it’s merely the conveying of a gift. Carefully and completely describe the subject matter of the agreement. WHY? 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. how many. ask yourself the basic questions of who. the address and description of the real property. what. in writing. and how much. where. When you are ready to commit yourself in writing. One party wishes to buy what the other wishes to sell. your plants die because the house-sitter wasn’t told to water them. However. before the trip. You can do this more formally by taking them to court (perhaps as a last resort). and dated agreement. Failure to do so can lead to big problems. have your spouse also agree to the details of the agreement. Both parties must receive a benefit or something they personally consider of value. when. and put that information into the document. why. signed. WHAT? The written document should clearly describe the item(s) covered by the agreement. You can informally enforce an agreement just by showing the individual(s) the signed copy as a reminder of the substance of the agreement and their commitment to it. In either case. which kind of. WHO? Provide of the full names the parties necessary to the agreement. one party will change behavior in exchange for something of value from the party who wants the behavior changed. the real estate contract includes information about the buyer and seller. Here’s what we mean. dating it. details such as what fixtures stay or what appliances go can be easily overlooked. and so on in standard contract form. pulling an agreement in writing.
in fact. how much or how many. Putting an agreement in writing. 194 50 Practical Negotiation Tactics . It gives the parties an opportunity to really buy into the deal. dating it. which one or which kind of. the better. if that becomes necessary).The remaining questions fill in the details of the agreement. agreed to the same thing. The more-specific and clear these details are. depending upon the deal: when or where. And it can create a tangible reminder of the deal (or an enforceable agreement. and having all parties sign it ensures that the parties have.
Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .
Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: 196 50 Practical Negotiation Tactics .
________________ 10. ________________ 9. ________________ 2. ________________ 4. ________________ 6.Name of Negotiation Tactic 1. ________________ 8. ________________ 7. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 3. ________________ 5.
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New York: Penguin Books. 1991. W. McKay. and S. You Can Negotiate Anything. 2001. Labor Relations and Collective Bargaining: Cases. Eshelman. Prospect Heights. Gotbaum. Negotiation Skills. Upper Saddle River.REFERENCES Carrell. Oakland. J. Ury. Roger. References 199 . 1997. Inc. Domenici. Herb. 1991. Heavrin. 1988. 1987. K. Irwin. Pocket Negotiator. Upper Saddle River. Roger. Patrick J. 1980. 2004. R. Gavin.: New Harbinger Publications. Getting to Yes: Negotiating Agreement Without Giving In.. Inc.. M. Lewicki. and M. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Los Altos. and B. University of Missouri: Columbia Press. 1989. Inc. Inc. Sharpe. Fisher. R. 2nd ed. Inc.: Crisp Publications. Getting Together: Building Relationships As We Negotiate. W. Cohen. D. M. Minton. 1988. Clark. Calif. Practice. 7th ed. Fiske.E. New Jersey: Prentice-Hall. New York: M. and J. The Essentials of Negotiation. New York: Simon and Schuster. 1996. Cleary. New York: Penguin Books. New Jersey: Prentice-Hall. Brown. The Negotiator’s Handbook. Maddux. 1999. and Law. Calif. LittleJohn. Patton. and J. E. Ill. Kennedy. New York: Basil Blackwell. R. Negotiating in the Real World. Fisher. Inc.: Waveland Press. The Relaxation and Stress Reduction Workbook. Saunders. 2nd ed. C. New York: Bantam Books. Mediation. Chicago: Richard D. Victor. George. M. David. Inc. and C. Fuller. The Negotiation Handbook. and S. 2001.
Raiffa. The Mind and Heart of a Negotiator. www. R. Howard. Heath and Company. Labor Relations in a Global Economy. 1981.negotiationsources. Massachusetts: D. 1987. Lectures on Negotiation Analysis.Nierenberg. New York: Simon and Schuster. 1996. 1999. New Jersey: PrenticeHall. Howard. B. New York: Bantam Books. Inc. Weeks. Sharpe. L. Massachusetts: Harvard University Press. J. Upper Saddle River. New York: Viking Press. The Art and Science of Negotiation. 1991. Gerald I. Dudley. Inc. Massachusetts: PON Books. Bargaining for Advantage. 1994. Stulberg. George. New York: Penguin Putnam. G. Inc. Shell. Cambridge. William.org 200 50 Practical Negotiation Tactics . Lexington. Tsogas. The Art of Negotiating. New York: M. Ury. 1998. 1982. Raiffa. Thompson. C. The Eight Essential Steps to Conflict Resolution. 2001. Cambridge. Getting Past No: Negotiating with Difficult People. Inc.E. Taking Charge/Managing Conflict.
and Public Personnel Management. Personnel. Carrell are in the fields of collective bargaining and labor relations. The University of Nebraska-Omaha. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Labor Law Journal. Personnel Journal. he was elected to the City of Louisville Board of Aldermen for five terms. Organizational Behavior and Human Performance. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. organizational behavior. Business Forum. and served as President of the Board and Mayor Pro-tem for three terms. and the University of Louisville. Bakersfield. The Personnel Administrator. During his academic career he has received awards for both outstanding research and teaching. He received his doctorate from the University of Kentucky. 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 . in Economics from the University of Louisville. HR Magazine. Morehead State University. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator.ABOUT THE AUTHORS ichael R.A. and MBA and B. which is located in the greater Cincinnati area. The Academy of Management Review. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. Human Resource Management. In addition. Carrell is Dean of the College of Business at Northern Kentucky University. Carrell has held academic positions at California State University. M Christina Heavrin J. Dr. Books published by Dr. and negotiations.D. The Journal of Accountancy Training. In addition to negotiating numerous litigation settlements and contracts. Marshall University.
the City and a for-profit hospital for guaranteed indigent health care services for city residents. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. 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. Ms. Jefferson County. Recently voters approved the merger of the City of Louisville and Jefferson County Governments.park and a successful industrial park in the City’s enterprise zone. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. 202 50 Practical Negotiation Tactics .
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