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



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

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

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

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

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

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

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




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


50 Practical Negotiation Tactics

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

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



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For weeks.. timing was everything.m. Both sides caucused: The leaders on each side met to negotiate a compromise. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage... When the meeting resumed at 4:00 p. Then. in the end. the project had been stalled by 6–6 votes.m. The measure passed 6–5 at 5:45 p. That effort failed.m. and it worked. during an hour break in the meeting. At 5:30 p.m.. as predicted. He planned for it accordingly. and the meeting was adjourned. a member of the anti-project group left the room. A member of the pro-project group quickly called for a vote after the leader gave a signal. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. Preparation 31 .deadlock. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years. the pro-project leader told his members to filibuster until he gave a signal and called for another vote.

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

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

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

but they have no idea what the value of their firm’s name might be in this nearby city. were still alive. enjoying a statewide reputation for quality representation. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites.000? Carol: We really can’t take less than $160. The other law firm was prepared to pay $100. as to how you think the name is going to benefit you. 36 50 Practical Negotiation Tactics . Example 2 The law firm of Bits & Bites was a Sioux City institution.000 immediately. and then $10.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. Neither Edward Bits nor Edmund Bites.000. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. the founders of the firm. Inquiries to other law firms were not very helpful because in almost all of the instances. When Carol refused to budge. In any event. the buyer took it as a signal that either Carol didn’t want to sell. Carol drove off a potential buyer by setting an asking price that was just too high. We’re curious. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. Here’s how the initial negotiations went: Partners: Well. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. though. The partners are interested in selling the name.000 offer by coming down in price at least a little. or she has unreal expectations.Buyer: What if we offered you $100. we are certainly interested in your request to “buy” our firm name to use in your city.

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

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

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

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

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

and might even harden your opponent into an unfavorable position (for you or for both of you). Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. I have a problem with my recent bill and my billing rate. he was very unhappy. but I recently was sold a $. He had.10 a minute rate at my office location. 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.00 a minute. because we have had a sick relative out of town and we used long distance a lot this past month. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. in fact. How may I help you? Hello. He decided that the best approach was to act indignant when he spoke to the company representative. made some very good purchase decisions for his small business.Tactic 9: Control Your Emotions Stay cool. The fault was partly his because he did not stay on top of changes. A display of temper or frustration can indicate to your opponent that you are uncomfortable with your side’s negotiating position and they will assume that it is weak. So. such as deals on computer packages and phone services. 42 50 Practical Negotiation Tactics . I noticed this. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. It seems that the rate you are charging me on my home phone is $1. This will put you at a distinct disadvantage from this point on. Your opponent might conclude that they have made a serious misjudgment and want to make a conciliatory move to get you back to the bargaining table.

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

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

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

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

Then Susan. since this one is in perfect shape and it was Mother’s. Both sisters covet it. I’m willing to pay or let it go for $800. called the “Reciprocal Buy-Sell Offer. Mike. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. I’ll give you 48 hours to decide the price. However. Planning a Strategy 47 . with winner taking all. The second party then decides to either buy it at that price and pay the first party. the executor of the estate.” is the recommendation of Howard Raiffa. and split the proceeds. 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. Mike: Mary Anne. so you set a price at which you agree to buy or sell the coffee grinder. The first party decides on a price for which he or she will either buy or sell the object to the second party. you’re the oldest. A fourth option. a well-known negotiations professor from Harvard University. 3) They can agree to sell the object to a third party. All the rest of the estate has been divided among the family.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. 2) They can flip a coin. (two days later) Mary Anne: Well. Susan. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). with the highest bidder paying the amount to the other side in compensation for their loss.

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

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

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

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

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

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

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

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

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

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

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

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

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

None is as important as the first one. for example. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Another common strategy is to start with the status quo.000) Target Point ($23. Adapted from Labor Relations and Collective Bargaining.500) Fig. This is a practical starting point that will not anger the other side (and might even be expected).000) Settlement Range ($22.750) Target Point ($24. by Michael R.000 22 23 24 25 26 27 Initial Offer $28. The negotiator firmly states that it is their best offer in an attempt to gain a nice.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. quick agreement.000 Buyer Initial Offer ($21. 190–192.500) Resistance Point ($25. 2: Distributive Bargaining Process. (2004).750–$25. Carrell and Christina Heavrin. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. “Distributive” bargaining (“win-lose” or “zero sum”) is used. Exchanging Initial Offers 61 . 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. such as proposing to continue at the current rate or price. 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. 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.500) M $21. as illustrated in the following figure: Seller Resistance Point ($22.

When the two parties agree to a price within the range. the other side does not agree to this value). Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. yet is positioned well above or below what the party believes to be the opponent’s resistance point (thus avoiding the so-called winner’s curse). After initial offers are exchanged. these points have set the outer limits.000 and $28. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). The settlement range is the distance between the resistance points. the process quickly narrows to the range between the initial offers. A target point is the desired settlement value a party has set as a goal when negotiations begin. 62 50 Practical Negotiation Tactics .000. In the example. See Tactic #18: Agree on Something As Soon As You Can. thus starting out on a positive note. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. usually. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. if the buyer’s initial offer was $25.000) is reasonable.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. it is termed the settlement point – not the “right price” or “fair price. each initial offer ($21.” but the settlement price. and is the range in which most negotiations actually occur. 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). Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. thus producing a true “win-win” negotiation. 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

before someone else does. The other party will probably come back with an equally ridiculous offer.000. think things through before you make or accept the first offer.” (You have won a settlement. which can be very useful). then $320.000. 2) Start out with an old number. Let’s low-ball them and offer $290. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. offer $150.000 for a house that sold for $185. particularly if you don’t know the other party’s “settlement range.000 this year. Jay: No.000 and $337.000. We don’t know how anxious they are to sell or if they know the market. and houses in this area sell fast.000—what they paid for it. That’s a fair price.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. is the most (or least) the other side will accept. of course. and you cannot withdraw it in good faith. Their realtor told them that it sold for $290. but you feel cursed because you gave away too much. thus requiring greater concessions on both sides. such as last year’s price.e. 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. at minimum cost. never give them their asking price. because you have settled quickly. and that two similar ones on the same street sold for $330. or 3) Make an unrealistic offer (i.000 two years ago. 86 50 Practical Negotiation Tactics .” The perfect first offer. Sue: Let’s offer $325. The sellers must be willing to come down a few thousand … Sue: Well. Avoid giving away too much at the outset. They found one they both like that lists for $325.. Jay: No.) To prevent this from happening. 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 three years ago).

Sue: Then you do it.000. They outlined how they would develop a new employee performance-appraisal system. the company president. The buyers were very motivated to sell. as requested by the human resource director. was very impressed with their presentation. then let them make a counteroffer. the sellers obviously would have accepted and Jay and Sue. Exchanging Initial Offers 87 . as Sue had first suggested.) Bob: I’d do it for $3. they had offered $325.000.000 for each of us—$6.Sue: Don’t be crazy. I can’t tell our realtor $290. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. 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 $307.500—half the difference! Sue: Great. Give us your lowest price.000 total. Lyle Foxworthy. Both parties felt that they made a good deal. (Bob and Frank meet privately to discuss the situation. realizing they offered too much. Frank: Me too. If. since they had already bought another house. and the offer was based on fact: the prior negotiated price. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. That’s an insult! Jay: Well. but who knows what they are planning on offering.

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

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

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

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

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

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

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

Can we split it evenly? Brooks: Okay. $750 for lighting and $750 in the bank.000 $5. Maureen: No.000! Brooks: Good. I’ll trade your sidewalk and trees for my whirlpool bath.500 left.500 $2.000 $2. and we both get things we want. which I’d like to keep in the bank. that makes sense.200 $200–$2. I’d like to spend some of it on lighting upgrades. Making Counteroffers (The “Give and Take”) 95 . which takes another $3.000 $3.500 $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.500 $500 $1.000 $1. We have $1.# 1 Sod Item Cost $1. These are all permanent immediate needs.000 $500 $1.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


50 Practical Negotiation Tactics

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

Making Counteroffers (The “Give and Take”)


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


50 Practical Negotiation Tactics

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

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

Making Counteroffers (The “Give and Take”)


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

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

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

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

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

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

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

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

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

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

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

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

Conclusion The owner thought his neighbor’s service at $39.00 per month was far too much. Yeah. That’s another $5. The total is $38. What about the music package? Yes.00. they asked about the Cartoon Network. Disney is for the kids! The sports channels are for me. and my wife wants the old movies. 3. Okay. That’s $5. But that’s all! Then we’ll hook you up on Monday. Great.00 per month.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. instead of one total amount.99 per month. but he agreed to six “salami slices” for a total of $38. and SI 1. Thanks. and probably felt much better about the total negotiated package because it was presented in modest individual slices. Any other kids’ channels? Yes. I really want the sports channels.00 a month.00! Why? Because he judged the per-slice price to be reasonable. 2? How much? $8. 2. 128 50 Practical Negotiation Tactics . we had that before.

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

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

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

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

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

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

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

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

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

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

Applying Pressure


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

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


50 Practical Negotiation Tactics

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

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

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

Applying Pressure


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

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


50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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


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

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

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


50 Practical Negotiation Tactics

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

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

Applying Pressure


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


Making Progress


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What? That’s $35.000. has owned the house for 24 years and is downsizing to a condo. (Next day) We’ve reviewed the records you’ve produced. We love your house. This offer is for more money than any four-bedroom houses on this neighborhood list. but you’ve priced it way too high. $229.000. 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.500. $237. but the key is to gather facts that you might need—not just the facts that you will need. $235.000. They believe it is overpriced.000. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. Sometimes. The owner.000 under the listing price! We realize that. but the right facts presented at the right time can chill or astound and completely turn things around. and we are countering with an offer of $250. Here’s a list of the five that are about the same size as yours. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000. and $237. Sam Jones. the other party will ignore or refuse to believe the information.000.000. but we feel that it’s a fair offer.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. They sold for: $225. I’ll get back to you. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

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 . the negotiator skillfully finishes his words of congratulations by inserting one last key demand. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. However.

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

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

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

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

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

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

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

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

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

but word did get out that a public agency paid $200. I’ll take your offer back to her and let you know. to his disadvantage.000 and the conditions of the offer.000 just to get the employee to “withdraw” the complaint. 190 50 Practical Negotiation Tactics . 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.000 when all that was asked for was $100. Monica accepted the $200. It was made clear that the employer had paid the additional $100. There was a confidentiality agreement.She: authorized to pay $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000.000.

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

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

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

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

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 .

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

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

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

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

Ms. Jefferson County. the City and a for-profit hospital for guaranteed indigent health care services for city residents. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. 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 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. 202 50 Practical Negotiation Tactics . an agreement between the State of Kentucky. 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.