50 Practical Negotiation Tactics | Negotiation | Employment

SECTION I: INTRODUCTION

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

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

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50 Practical Negotiation Tactics

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

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

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

6 50 Practical Negotiation Tactics .” To a neighbor you can say. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. Keep this book handy when preparing for any type of negotiation. and use the forms in the back to identify the issues.time to look over this performance review and respond point-by-point. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. negotiations can be concluded with a written or oral agreement. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. Once a settlement is reached. and meet with you again. 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 facts. the other party will realize that you intend to negotiate and do not accept the situation. “I see why you want to cut down the tree. the parties and their interests. and the tactics that might move the negotiations along.

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

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

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

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and general circumstances under which negotiations take place can substantially impact the outcome. say. my name is Bob Hillard. Bob followed the man home.000? No. but money doesn’t mean anything to me at this point in my life … Well. Prepare carefully. and do your homework. I love this car—restored it myself. Not even for. day. 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. time of day. He stopped and knocked on the door. on Briarwood Road. as he left the supermarket. just out of curiosity. thanks. I live a few blocks from here. One day. Would you possibly be interested in selling it? No. $12. The external pressures put on the parties involved (which might not be related to the issues under negotiation) can sometimes be used to advantage if you know about them. he noticed a FOR SALE sign in the yard. which turned out to be only a few blocks from his own house.) Preparation 29 . One day. he saw an elderly man get in his dream car and drive away. As the man got out of his car. That’s a generous offer. It was nice meeting you.Tactic 6: Timing Is Everything The exact month. 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. Hi! What can I do for you? I’ve admired your ‘63 Impala for years.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The owner told the employees that he was worried that during the overtime shifts. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. they would become dissatisfied with their pay and want their base pay increased. lesssenior employees might be at greater risk of injury because they have to handle explosives. 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. that’s just not fair. I’ve got to have the employees with the most experience to protect this place. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . and you just can’t be too careful. and it’s not what we’re even talking about. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. and it’s getting old. Working with fireworks is working with explosives. 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. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. Owner: Now.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. The employees’ negotiator finally decided to use “indignation” to break the stalemate. and that they should be asking for a fairer base wage for the work they do for you. On those overtime shifts. They will be putting the plant AND their fellow workers at risk by not being here.

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

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

(sixty days later) 48 50 Practical Negotiation Tactics . Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. I’ll pick it up tonight. Thanks for making this last step as easy as possible. in writing. Lectures on Negotiation Analysis. and then decide how much more “emotional value” it held. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). You will both agree. Here is my check for $800. I choose to buy it. I suggest a slight modification to the process. They accepted his suggestion to use the “reciprocal buy-sell strategy. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book.” Howard: Since in this case you are talking about a multi-million-dollar business. 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. Two business partners had been working together for ten years to build a successful business. 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.Susan: Mike: Well. Both came to Raiffa to help negotiate a settlement. which will bind us to the outcome. After I open the bids. 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.

I will arrange to sell him my half-interest for $180 million. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. Bobby. and to close within ninety days. you agree to sell your half-interest to Bobby for $180 million. Conclusion Both parties wanted to keep the business. but only if they could become the sole owner. Bobby was willing to pay more than Abe to remain sole owner. Abe. your bid is $190 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. Agreed. your bid is $170 million. and we close by July 1st. And I will arrange financing to pay you $180 million to become sole owner.Howard: Abe: Bobby: Abe.

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

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

Example 1 When Russ and Bill got home from school. you both want to complete negotiations by a certain date. particularly when things seem to be at a standstill. When they boys returned. the last piece of cake will get thrown away. neither of you want to be embarrassed at the outcome. because I am so conscientious about my paper route. Be clear on what you have in common at the start. That simply rewards your continual squabbling. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. These positive things are part of your goals and objectives. and so on. point them out at the very beginning of negotiations and refer to them throughout the process. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. she made them share whatever it was. like we usually have. Usually. you want to reach an agreement that is favorable to an outside party. and neither boy was very happy. I also took out the garbage last week without being asked twice. I missed dessert the other night because I had to get to baseball practice. They immediately began to fight over it. If this was chocolate icing. and I really love the banana/butternut/ sour cream frosting on this cake. here’s what they said to her: I think I should be rewarded with the piece of cake. and then asked their mom for a chance to negotiate with each other. she decided to try something different. Russ: 52 50 Practical Negotiation Tactics . and their mother was tired of it.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. they saw that there was one piece of cake left over from their mom’s bridge party. The two boys fought over the last piece of everything. Unless you can convince me otherwise. The boys quickly huddled. I wouldn’t care so much. This time.

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

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

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

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

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. Let’s continue. Conclusion Knowing the external deadline gave David a significant negotiating edge. and I don’t like it.Allan: (One hour later. Planning a Strategy 57 . Obviously.

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

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

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

750–$25. Exchanging Initial Offers 61 . (2004). Another common strategy is to start with the status quo. quick agreement. 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. for example. such as proposing to continue at the current rate or price. Adapted from Labor Relations and Collective Bargaining.000 22 23 24 25 26 27 Initial Offer $28.500) Fig. by Michael R.500) M $21. None is as important as the first one. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000 Buyer Initial Offer ($21.000) Settlement Range ($22. The negotiator firmly states that it is their best offer in an attempt to gain a nice. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse.000) Target Point ($23.750) Target Point ($24. 2: Distributive Bargaining Process. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. “Distributive” bargaining (“win-lose” or “zero sum”) is used.500) Resistance Point ($25.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. 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. 190–192. Carrell and Christina Heavrin. This is a practical starting point that will not anger the other side (and might even be expected). as illustrated in the following figure: Seller Resistance Point ($22.

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

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

Oh. (excited) That would be so cool. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. Dad. Jerry from down the street is in a really good band that all of the crowd likes. We could play records and you guys could dance.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. Shelly. Your dad and I already talked about this and agreed that 20 guests would be the limit. we could rent the VFW hall. I guess the VFW will work. we need to talk. alone. In fact. We’ll get a band—everyone does. Mom! This is my “Sweet Sixteen” party. And they can’t go home at 10:00 p. (with some irritation) I’m not sure.m. That sounds like too many for here at the house. Actually. I think the band would be fine. I’m sure we can ask them to tone it down a little. we’ll call you when we’re ready. I think we can handle a few more kids—how about 35? And midnight sounds okay. Time out! Dad. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics .” They would never expect a party to end before midnight. and then the number of kids won’t matter. That would be great! It would keep everyone entertained. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. okay. (During the caucus.—that’s so “baby. It’s special!!! Well. And midnight is definitely too late. 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. causing them to lose control and make compromises they hadn’t intended to make. but no Sweet Sixteen birthday party decorations. When they called Shelly back in. midnight. A DJ? I guess that’s okay. her mom presented the revised proposal.m. And we’re serving chips and sodas. but we’ll schedule the party for 8:00 p. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . and we will need to approve the list. please!! 11:00 p. Your mom and I agree—11:00 p.m. That way. to 11:00 p. But you are limited to 40. But we can have the band. can’t we? No band. this mom-and-dad negotiating team became unglued during the negotiations. and not a huge production. and you can invite more friends. All right. Dad. we will be better able to chaperone. Does that mean no presents. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. Agreed.) Okay.m. Example 2 The contract negotiations between the company and the union had been going on for days. but your dad and I agree on getting a DJ to play. sorry. Okay. That’s so lame. we’re going to rent the VFW hall.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. too? No way!! I want presents!! Conclusion In spite of their prior planning.m. is for little kids!! No.

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

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

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

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

27. 24. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. A second and third round produced the following allocation: Jenny: December 23. 70 50 Practical Negotiation Tactics . but that is a secondary consideration. 26 Miguel: November 25. They agree.November 25 (the day after Thanksgiving) December 23. January 1 Carolyn: December 24. 26. 2 Jenny: December 23. December 30. She proposes to work five days. December 27. She would actually prefer to work the extra days and get paid time-and-a half. They all agreed to their schedules. This would allow Jenny and Miguel to each work only two days. and each chooses their days to work: Carolyn: December 27. 30. They have decided to start over. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. each made a first choice of days they will work. 30. 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. in exchange for giving up earlier choices due to seniority. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. 31 January 1. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. December 26. December 31 Miguel: November 25. January 2 None of the three are totally happy with the results. January 1. 2 In the first round of negotiation. 31.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Avoid giving away too much at the outset. 86 50 Practical Negotiation Tactics . and you cannot withdraw it in good faith. which can be very useful). The other party will probably come back with an equally ridiculous offer. 2) Start out with an old number. 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. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. and that two similar ones on the same street sold for $330.. The sellers must be willing to come down a few thousand … Sue: Well. particularly if you don’t know the other party’s “settlement range. 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. before someone else does. because you have settled quickly. and houses in this area sell fast. offer $150. such as last year’s price.” (You have won a settlement. Sue: Let’s offer $325.000. Their realtor told them that it sold for $290.000 this year.) To prevent this from happening. at minimum cost. Jay: No.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. We don’t know how anxious they are to sell or if they know the market. never give them their asking price.000.000—what they paid for it. That’s a fair price.000 two years ago. then $320. thus requiring greater concessions on both sides.e.000 for a house that sold for $185. They found one they both like that lists for $325. think things through before you make or accept the first offer. but you feel cursed because you gave away too much. Jay: No. is the most (or least) the other side will accept.000. Let’s low-ball them and offer $290. of course. or 3) Make an unrealistic offer (i.000 three years ago).” The perfect first offer.000 and $337.

500—half the difference! Sue: Great.000 total. the company president. but who knows what they are planning on offering. Both parties felt that they made a good deal. Exchanging Initial Offers 87 . Give us your lowest price. since they had already bought another house. That’s an insult! Jay: Well. realizing they offered too much. (Bob and Frank meet privately to discuss the situation. The buyers were very motivated to sell. They outlined how they would develop a new employee performance-appraisal system. I can’t tell our realtor $290. If. Sue: Then you do it.000. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. as Sue had first suggested.) Bob: I’d do it for $3.000 for each of us—$6.Sue: Don’t be crazy. the sellers obviously would have accepted and Jay and Sue. 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. as requested by the human resource director. was very impressed with their presentation. and the offer was based on fact: the prior negotiated price. then let them make a counteroffer. they had offered $325. Lyle Foxworthy. Frank: Me too.000. (the next day …) Jay: They made us a counteroffer of $307.

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

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

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

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

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

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

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

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

Length of Contract 2. 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. 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. The combined lists total thirteen different items: Desired Outcome No. Profit-Sharing 5. management and union negotiators found that a “winwin” approach to negotiations worked well.Conclusion By taking the time to list all the items each person wanted and their cost estimates. Pension Increase 3. All items to be negotiated and their desired outcome for each item were put in writing for review. finally agreeing to split the difference on the remaining amount (distributive items). both sides exchanged lists of initial demands at their first meeting. Wage Increase 4. This year. During that time. Drug-Testing Program 96 50 Practical Negotiation Tactics . 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). even in difficult years.

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

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

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

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

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

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

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

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

Estimates for building a new orphan home ranged from $12–$15 million. depending on the cost of the land. a non-profit organization for orphaned children. Kids’ Home: That’s why we brought the foundation’s officials with us. The foundation has a substantial endowment fund. Kids’ Home hoped to get $500.5 million is available for distribution to numerous charities. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building.000 a year for operations. but we need some assurance that you will be able to build and operate the orphan home at that location. City officals: We can probably give you the land for free. City: Can’t you borrow the money from a bank to build the facility. the interest income of around $6. 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). but the principal of the fund can’t be touched. Kids’ Home: As you know. Foundation officals: Oh. They are meeting with the city to ask that the land be donated by the city for the project. we’re committed in theory. the foundation’s regular annual grants come to roughly half of their available funds.Example 2 Kids’ Home. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Each year. 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 . had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. but we can’t fund all of the $12 or $15 million. we hope to break ground early next year for the new orphan home. Unfortunately (for Kids’ Home).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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I’ll find a way to do without one part-time person. but I will cut your travel budget out completely. I’ll do it now. I can’t help. Clean it after your game. Conclusion At first. Example 2 Roberto: I can’t properly advertise this new program with a $5. she chose the one she most preferred. Take it or leave it. I have three hours. I’ll approve $15. Felipe: Well.000 for advertising. (long pause) Felipe: Let me give you three options: A. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . and clean it. I can accept B. Roberto: But I need to start the direct mail and newspaper ads within two weeks. I’m not going back to him again to discuss this program. Use the $5.000 for advertising.000. that is enough time. Felipe: (Roberto’s supervisor) Sorry. Amber resisted the chore she hated. Three.000 budget! I need at least $20. Roberto: But it will never generate enough interest if no one knows about it. but the company president does not share your optimism on this program. Roberto: Well. but I will cut your staff by one part-time person (or $15.000). or C.000 in the budget. keeping her Saturday free.Amber: row before your basketball game. Felipe: Sorry. or we lose a whole year. But when her mother laid out the schedule and gave her alternatives. I’ll approve $15. B. but no TV or anything until it’s done! (pause) Okay.

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

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

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

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

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

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

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

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

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

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

you can get the Disney channel for only $5. and payout slices to reach the total price she wanted.” she had him—she worked around the $300 slices. I can afford $6. Let’s see. But my neighbor pays $39.00 per month. Instead of a three-year lease. Great! So. but what else must I buy? Only the basic service for $8. as promised.000 price into “slices” the buyer thought reasonable. down payment.00 per month.Buyer: I don’t see how you can do that. I can’t afford that much.00 per month for your service. I can’t discuss another client’s account. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. but let me see the numbers. do you want HBO? How much? $5. it will be a five-year lease.” She decided to cut the $45. Once the buyer volunteered that $300 was an affordable “slice.000 down. (looks at the numbers) That looks good. Making Counteroffers (The “Give and Take”) 127 . and added the trade-in. can’t you? Buyer: Yes. with your car and $6. You can do that. Saleswoman: Simple. do you want Disney? Yes.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock.99 per month. Sure.

00 per month. What about the music package? Yes. Disney is for the kids! The sports channels are for me.00! Why? Because he judged the per-slice price to be reasonable. we had that before. 2.00. 3. Great. Okay.00 per month was far too much. Conclusion The owner thought his neighbor’s service at $39. Yeah. and my wife wants the old movies.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. 2? How much? $8. I really want the sports channels. But that’s all! Then we’ll hook you up on Monday. and probably felt much better about the total negotiated package because it was presented in modest individual slices. That’s another $5. Thanks. instead of one total amount. but he agreed to six “salami slices” for a total of $38.00 a month. and SI 1. they asked about the Cartoon Network. That’s $5. 128 50 Practical Negotiation Tactics . Any other kids’ channels? Yes. The total is $38.99 per month.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. “Okay. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. If one party misjudges the situation.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. it can be a dealbreaker. In one case. At the end of negotiations.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. 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.important item. This experienced bargainer said. so be prepared to withdraw the nickel and dime item at the hint of trouble. 168 50 Practical Negotiation Tactics .

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

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

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

but the key is to gather facts that you might need—not just the facts that you will need. $229.000. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000. (Next day) We’ve reviewed the records you’ve produced. What? That’s $35.000.000. This offer is for more money than any four-bedroom houses on this neighborhood list. We love your house. The owner. but you’ve priced it way too high. $237. but we feel that it’s a fair offer. Here’s a list of the five that are about the same size as yours. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. Sam Jones. They believe it is overpriced. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.000.000 under the listing price! We realize that. They sold for: $225. the other party will ignore or refuse to believe the information.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . but the right facts presented at the right time can chill or astound and completely turn things around. has owned the house for 24 years and is downsizing to a condo. Sometimes.000. and we are countering with an offer of $250.000. I’ll get back to you.500. $235. and $237.

We’ve talked with purchasing and we have the authority to buy seven for $2. Conclusion Hatfield had anticipated what his supervisor’s position would be. I’ll get called on the carpet. let’s not worry about it.000 each. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Hatfield: My staff has done a lot of research. Here it is. Conclusion The Joneses had based their asking price on the advice of a friend. We accept. and did his homework. He found facts that supported his position. You can’t pay more than $1. Supervisor: Well. Order the new computers. That’s the bottom price. Hatfield: While I was at purchasing. who was not particularly knoledgeable about real estate. and we know that only this model will meet our needs. Supervisor: If I okay this purchase order. I asked for a list of all new PCs bought this year. Making Progress 173 . if other departments have ignored the policy. The last 20 were over $2. and wisely chose exactly when to present them in order to make his point.400 each.600 for a computer.600 unless the company president approves. Example 2 Supervisor: You know the policy. Well… We have a written counter of $245.000. I’ll be… Okay. No one can go over $1.

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

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

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

T Reaching Agreement 177 . days. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. and the child learns an important lesson about life. or even months after the first offer is presented. 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. If friends or neighbors need to settle something but prefer to avoid the negotiation process. hours. 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. 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. When multiple issues are at stake and most have been agreed upon during negotiations. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. When two parties believe they have an oral agreement. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. They bring it out when a dispute arises.Stage 7: Reaching Agreement he final stage! It might come minutes. and the classic Walk Away (Tactic #48). In this process. Tactic #49 (Final-Offer Arbitration) should bring about a settlement.

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

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

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

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

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

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

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

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

No increase has been given for six years. I’m not happy with your decisions. and peacefully finalize a contract that contained several important gains for both sides. money. on the merit pool distribution method issue. Well. At least we both saved time. and an item that large should have been negotiated at the table.Ralph: Tina: on last year’s data. Second. reasonable resolution to their last three unresolved issues. Ralph. nor why their method was superior. 186 50 Practical Negotiation Tactics . but we agreed to this process. and stress. It will only cost $120.000—less than 1 percent of the total package. Now let’s get a signed contract. Finally. on the clothing allowance. I’m sure you realize that we could have taken six more weeks to reach the same point. I have chosen the union’s final offer. I have chosen management’s offer because the union did not justify why the past practice should be changed. Conclusion The final-offer arbitration process enabled the parties to gain a fast.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the City and a for-profit hospital for guaranteed indigent health care services for city residents. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Jefferson County. Ms. 202 50 Practical Negotiation Tactics . 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. 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.park and a successful industrial park in the City’s enterprise zone. an agreement between the State of Kentucky. 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.

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