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SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. Who. few people understand that normal interactions represent bargaining opportunities. practical tactics useful in real-life situations at work or at home. such as these: • You receive the wrong order at a restaurant. 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. they pay the sticker price. or engage in an unproductive argument. Unfortunately. But if you scored 8 or less. Most readers will no doubt recognize some of these strategies. • A child wants a new toy now. with family members. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. but many of us miss the opportunity to bargain in other situations. Instead. at a flea market.negotiator! Pass this book on to someone else who needs it. accept what is given. some will in retrospect even remember being the victim of one or two of them. 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. 4 50 Practical Negotiation Tactics . with neighbors. • A co-worker asks for volunteers for a new project. exactly.
Mutual goals.” When you recognize that something can be negotiated. For example. time. Multiple parties. you must advise the other party of your intention to negotiate. be prepared to bargain. Flexibility. and each side can involve one person or several people (each representing one “side” of the issue).• • • • • • • A hotel clerk tells you that your reservation was lost. “Well. A neighbor wants to remove an old tree on your property line. Decision-making ability. Therefore. A teenager wants to buy his/her first car. All of these situations are opportunities to negotiate. There must be a conflict in the sense that what one wants is not what the other wants. Both sides want a settlement. There are flexible elements to the situation. The parties involved can make a decision by themselves. 3. perhaps you can say to a hotel clerk. What are my alternatives?” During an employee evaluation. Two or more sides are involved. “I’d like Introduction 5 . that can be negotiated. and I don’t have time to wait for another. In some circumstances. 2. The parties are interdependent: what one party does affects the other. Each one has the five key characteristics necessary for bargaining: 1. 4. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. Interdependency. Your spouse wants to buy new furniture. or items of value. The parties involved are interested in reaching a common goal. 5. Your boss reviews your past year’s performance. In some situations. condition. such as price. some resolution must be negotiated. A service repair person gives you an estimate on some work. one party is only allowed to follow policy or must wait “until the manager arrives. since you lost my reservation. A friend is about to select the movie he/she wants everyone else to see. perhaps the employee can say.
“I see why you want to cut down the tree. Keep this book handy when preparing for any type of negotiation.time to look over this performance review and respond point-by-point. 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.” To a neighbor you can say. but I believe it adds value to our house. the facts. and the tactics that might move the negotiations along. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. negotiations can be concluded with a written or oral agreement. and use the forms in the back to identify the issues. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. the other party will realize that you intend to negotiate and do not accept the situation. and meet with you again. the parties and their interests. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. 6 50 Practical Negotiation Tactics .
did you request appropriate compensation? 6.How good are your negotiation skills? Place a check in the box that applies to you. Do you routinely negotiate for better accommodations when you check into a hotel? 3. etc. When you purchased your last home or car. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. do you routinely negotiate a last add-on before you close the deal? 9. allowance. spouse. The last time you received sub-par service or food in a restaurant. do you believe that you negotiated the best possible deal? 4. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. have you ever required a written agreement covering chores. but you did not? 8. or child. As a parent. 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 . Do you wish you could negotiate a change in your job duties or salary? 7. In the past. In the past. Yes No Self-Assessment Quiz 1.? 10. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. When making a major purchase.
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They’re referred to as “win-win” because each side can achieve their goal. If it is a relatively informal situation.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. thus allowing each side to achieve one of their goals. Examples: • office location (city. the process will probably take several weeks or months as the parties move through all the stages. including those that are less obvious. The Negotiation Process 9 . The “Quick Model” approach outlined below is good for simple negotiations. the process will be fairly straightforward. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. etc. decide how complicated the issue is. state.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. one for another. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). On the other hand.
Examples: • an item sold by one party and bought by the other • wage increases won by one side. 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. the other side loses. 10 50 Practical Negotiation Tactics . What one side gains. stages can be combined. Depending on the situation and the parties involved.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. rearranged. The Comprehensive Model Negotiation is more of an art than a science. or even skipped altogether. but feel free to try them when they seem most appropriate to your specific circumstance.
The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 . Information.
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. For the past two months. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. inventory. The threatened strike became a reality. and final offer. was a power play. The union is demanding wage and benefit increases. In this case. When negotiations with the union became hopeless. as Harvey had for many years. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. his BATNA was not to hold out for more money.” which was refused. notified all the employees of their intentions. With only two weeks remaining before a threatened strike.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. and it now employs 230 craftsmen. Conclusion Selling their business was the Jaggers’ BATNA. 16 50 Practical Negotiation Tactics . but rather what the buyer planned to do with the car. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. the Jaggers decided to seek buyers for their land. best. 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. and equipment. They learned that their assets would be easy to sell and were worth more than originally estimated. providing them with a very good income for life. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. The $56 million dollar business took them 30 years to grow. The Jaggers gave the union their “last. The owners. The union negotiators thought the Jaggers were bluffing. The union negotiators convinced the employees that this too. selling became an attractive alternative to a strike or prolonged battle. as a last resort.
you still interested in my rifle? Of course.000? That’s more than I planned. It is extremely rare—one of only 100 made with that bore and handle. John assured Tom that this would never happen. Make me an offer. Example 1 Tom had always admired John’s 1861 Confederate rifle. Are you finally ready to sell it? Yes. What changed your mind about getting rid of it? It is still in perfect condition. 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. for example. what the other party’s desired outcome is. Just as important is the why. If you are the party making the offer on the house. it’s still perfect. This is a good thing to know. A person who has to sell her home because her company is relocating her. John: Tom: John: Tom: Tom. Just running out of space. she might have to take a lower offer just to be able to move. 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. How much are you thinking it’s worth? John: Well.000. Preparation 17 . so Tom was surprised when John called him out of the blue one day with a proposal.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. at some point. I’ve been thinking of getting rid of it for a while. I guess I couldn’t take less than $20. Tom: $20. and told John several times to let him know if he ever wanted to get rid of it. because if the company does not provide relocation benefits. Gosh. sure. right? John: Sure. it’s to your advantage to know what is behind a seller’s decision to put it on the market. I think so. you know.
BigManu: Rick. Was Tom interested? Tom declined. Conclusion Tom entered into the negotiations suspicious of John’s motives. He is two years away from retiring and does not want his business to fail before he does. I don’t think I can go higher than $18. let’s do it. and now the two-year requirement has become a stumbling block in the negotiations. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. Tom now felt comfortable negotiating the price. we really want to buy your company. if you could come up a little—say $18.Tom: Okay. However. No longer worried about John’s motives. When Tom found out why John decided to sell his rifle. it made the negotiations easier.500—we’d have a deal.000. let me think about it and I’ll get back to you. Without some trust. The sale price for the company has not yet been agreed to.500 had an 1861 for sale. I’ve been thinking about your offer. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. Example 2 Rick. parties to a negotiation are not likely to reach agreement.) Tom: John. and we’re committed to keeping it open as a major division of our company. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. has begun negotiations to sell his firm to BigManu Company. but I could get the money to you right away. Well. fearing that this will put all of his employees out of work. John: Well. Rick needs to remain president of the company for the next two years. Tom: Okay. we 18 50 Practical Negotiation Tactics . but then he will be happy to retire. but thought this might explain John’s sudden interest in selling the rifle. the owner of a small manufacturing company.
(Between negotiating sessions. In hopes of pushing the deal forward. I just want them to have a real chance to show you how good they are. Within the parameters of efficiency and effectiveness. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. my employees will prove to you that they are uniquely able to run this place. and I hired every one of these people. Let’s talk later. they decided to put their price on the table and revisit the issue after a price was agreed upon. Without this commitment. I just don’t want it to change after I’m gone. Rick: I built this business from the ground up. We just can’t make good operational decisions with our hands tied.cannot guarantee to you that ALL of your employees will be retained for two years. You’ll be in place to participate in our employment decisions. 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 . Rick: These people are the best at what they do. Working as a division of your company. We still can’t find a way to do it. BigManu: We just don’t see a way to give you what you want on this. you will have a say in how the employees are treated.) BigManu: Okay. I just can’t go through with this sale. I need to give them some sense of comfort if this deal goes through. The price they gave Rick was actually more than he had expected. and he accepted it subject to agreement on the two-year employment guarantee clause. BigManu: You know we want you to stay on and manage this division for us. and we think it’s an odd request anyway. let’s talk about the job guarantee you wanted.
I certainly want to do all I can until then to protect my people. but we won’t be completely tied to operations as they are now.BigManu: We intend for you to stay and become a big part of our company. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. 20 50 Practical Negotiation Tactics . Rich almost lost the deal. This wouldn’t have anything to do with your own plans for the future. Conclusion By masking his real objective (giving himself two more years as president before retiring). Let me get back to you. I’m hoping to retire in two years. Rick: Well. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. that might work. to tell you the truth. Surely you’ll be able to “protect” your people if they are as good as you say. would it? Rick: Well. you’ll have a guaranteed “in” to protect your people.
the frog is everybody’s favorite. and go play somewhere! Cybil: Well … Okay. Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. Make up your minds. girls. and so on.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. I like the frog. it’s a deal. (thirty minutes later) Bailey: So. Mother: Hush. Cybil. too. (Think of the showroom tactics used by car dealers. they control the breaks and environmental factors. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. they have the information they need at their fingertips. Bailey: Cybil: Preparation 21 .) Let’s take all our Beanie Babies to my house to trade! Okay. such as a hotel conference room.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. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking.
until we have a settlement. Team B had clearly used its home turf to gain a substantial advantage. Team A agreed to a settlement almost identical to the one rejected days before. Team A agreed to change the meeting place. That’s why she wanted to go to her house.Conclusion Bailey. About thirty-six hours later. They were blamed for accepting the same deal that had been rejected only days earlier. around the clock. not one member of Team A was chosen to return to the table. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. After forty hours of negotiating. non-stop negotiations wore down the members of Team A. having set up beds. as long as they met in the boardroom of Team B. in their own familiar setting. 22 50 Practical Negotiation Tactics . The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. The firm deadline was only four days away. Team A was whipped physically and emotionally. Both sides desperately needed to settle a property dispute. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. while members of Team B were able to stay fresh. was still going strong. meals. and other conveniences in the adjoining room. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. When negotiations resumed in two months over another piece of property.” The chief negotiator for Team B agreed. although only ten years old. The physical and emotional demands of 24-hour. Team B. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom.
Larry: Just make sure you’re comparing apples to apples. This uncomfortable negotiation followed: Larry: Will. and he and Larry have always gotten along. Larry was thrilled. rather than give them the “advantage. I was kind of surprised at how high it was. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. though. If they tell us that they either Preparation 23 . I would have charged anyone else much more. Larry had expected to pay him for his time. I anticipated much less work. Larry: But Will. I gave you my “family” rate. and show them the actual work that got done.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. I did get some estimates from plumbers. If you think that the other party knows more than you do. and they were much lower than this. When we got into it. when Will presented Larry with his bill. it became clear that all of those pipes had to be pulled and new ones put in. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. It was twice as high as the estimates Larry received from other plumbers before they started the project. Let’s get the guys back in who gave you estimates. After all. Larry: Well. Will: Larry. Will is a licensed plumber. about your bill. you are likely to resent them for it and hold out.” This can hold up an agreement and cost you in the end. When you first told me about your project. Believe me. based on objective criteria (think property appraisals in real estate). but was shocked at the amount of the bill. Things turned sour. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom.
I’ll revise my bill to meet the lowest estimate you get. Example 2 After Stuart was appointed to the college’s Board of Trustees. Budget Officer: I don’t know what your problem is. they said. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. 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. Had they actually prepared bids on the work. I certainly didn’t mean to offend you. Comparing the estimates to Will’s actual costs would have been counterproductive. they would have had to revise the figures. The college’s budget officer was understandably offended. 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 . 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. because (as Will pointed out) it wasn’t an apples-to-apples comparison. 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. Larry: That sounds fair. From a look at the portfolio. Conclusion When the other plumbers looked at the work.disagree on the need for that work or that they would have done it for less. he used his financial expertise to analyze the investments of the college’s endowment fund. and no one had ever questioned her performance. He was disappointed in the performance of the fund. and decided to bring the matter up at a Board meeting. The estimates would have been higher than what cousin Will charged.
but we can ask them to plan and cost out each move. In this situation. but I want to be involved in the discussions with them about what we’re asking. As you know. 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. Okay? Budget Officer: Okay. and its resources are limited. At the end of two months. then you and I can talk about changing our investment strategy. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. Stuart realized that the budget officer needed very-specific “criteria” (such as the actual experience of investing the school’s endowment fund) rather than relying on an investor’s experience. if both of them demonstrate a similar strategy and produce better results after expenses. the college is a private institution. I don’t question that they were sound at one time. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. there might be increased risk and some expenses for commissions. I don’t want you directing how they’re going to go. Preparation 25 .were stale. Budget Officer: Yes. Stuart: No problem. I find that a more aggressive investment strategy produces a better return. but some of these stocks have really lost their value. Now. considering commissions and all. I have a suggestion. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. but such a strategy also increases risk and costs more money to administer. but I think they more than offset the gains. because she did not have the background in investments necessary to trust such advice. Stuart: Yes.
It will cost me more than $10—about $35 per week. what else can I do. if I give you an increase. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. baby-sit your sisters. Shari: Well. 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. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. a sixteen-year-old who lives with her parents and three younger sisters.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. wash the cars. not just an allowance increase! There is: (1) a $10 increase. You can’t treat me the same! Mother: Well—so we’re talking about several issues. your little sisters will want equal treatment. Once you both agree on the list of things to be negotiated. and ask the other party to add to the list. (3) more chores. (2) a later curfew. Mother: That’s a large increase—and we just raised it last year! Shari: Well. Mother: But your allowance is based on what you earn in your weekly chores. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . has asked her mother for a $10/week increase in her allowance. Example 1 Shari. not on what you want to spend. I need more money for clothes and CDs. cut the grass. This strategy can build trust in the negotiation process itself. and for going out with my friends. Shari: I’m four years older than the next-oldest.
you get to stay out an hour later that night. Now we have a package deal to propose … Preparation 27 . and item #23 (the wellness program voucher). And if you clean the whole house on Saturday.Shari: Right! Mother: So … I suggest no allowance increase. An allowance increase. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. since all of their items were included as requested. Then a “win-win” solution could be determined. in the first session. which the other children would have requested as well. but unlike your sisters. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. I’ll pay you $10 to babysit every Wednesday night. The trading of items (where initial demands are discussed and agreed upon) begins. item #11 (the clothing allowance). was avoided. Management agrees. Shari got the $10 she wanted and a later curfew. while your Dad and I go out. if you agree to our proposals on item #3 (the paid vacation schedule). opens by proposing the list of items. while the mother won a Saturday house-cleaning and a night out each week. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). Now it is time for each side to list their desired outcome for each item. The union’s chief negotiator.
the two sides will at this point sign and date the list of proposed items. 28 50 Practical Negotiation Tactics .Conclusion In most labor negotiations. Then negotiations can resume on the remaining 43 items. other trade-offs are proposed and agreed to until only a few items remain. thus removing them from the discussion table.
and general circumstances under which negotiations take place can substantially impact the outcome. day. (For the next three years. which turned out to be only a few blocks from his own house. say. on Briarwood Road. Not even for. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. I love this car—restored it myself. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. time of day. 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. Bob made it a point about once a month to go out of his way and drive by the man’s house. Prepare carefully. he noticed a FOR SALE sign in the yard. He stopped and knocked on the door. One day. and do your homework. Bob followed the man home.) Preparation 29 . thanks. It was nice meeting you. That’s a generous offer. but money doesn’t mean anything to me at this point in my life … Well.Tactic 6: Timing Is Everything The exact month. $12. One day. my name is Bob Hillard. As the man got out of his car. as he left the supermarket. I live a few blocks from here. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. Would you possibly be interested in selling it? No. he saw an elderly man get in his dream car and drive away.000? No. just out of curiosity.
I’m moving to California to live with my daughter. for tax reasons. 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. Then it’s a deal? Yes. Follow me. as a matter of fact. The board members had met twice before. I can’t take it with me. Can I see it? Sure. Can you come back on Monday at 10:00 a. December 31st. (after a careful inspection) It’s a very nice car! I’ll give you $12. A majority was needed to pass the partnership agreement. that’s a fair price. had issued a deadline of December 31st. Example 2 It was Sunday.m. and the vote was a 6-6 tie each time.m. A third vote at 3:00 p. Conclusion While Bob did not achieve his goal during his first negotiation effort. the proposal would die at midnight. beyond which the project would have to be abandoned. The partner organization.000. if a seventh vote could not be found by the pro-agreement side. to seal the agreement at the courthouse? Sure. resulted in another 6-6 30 50 Practical Negotiation Tactics . the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. so I guess I will be selling it. I’ll see you on Monday. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. Well. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well.
the project had been stalled by 6–6 votes. 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. in the end. That effort failed. timing was everything. He planned for it accordingly. The measure passed 6–5 at 5:45 p. Preparation 31 . a member of the anti-project group left the room.. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years. the pro-project leader told his members to filibuster until he gave a signal and called for another vote... Both sides caucused: The leaders on each side met to negotiate a compromise.m.. When the meeting resumed at 4:00 p. as predicted. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. At 5:30 p. Then.deadlock.m. For weeks. A member of the pro-project group quickly called for a vote after the leader gave a signal.m. during an hour break in the meeting. and it worked.m.
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In some cases. if you want to begin in a friendly. such as a buyer and a seller or a city and its union. Tactic #43 (Nickel and Diming). or one-time-only. as it can substantially alter the negotiations between two primary parties. might step in and help settle negotiations between a union and administration negotiators. 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). Tactic #12: Find Common Interests can be helpful. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. uncaring approach (Tactic #9: Control Your Emotions. 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. a third party can serve as a mediator (a legislative body. decide whether the negotiations should be continuous. you must first evaluate your needs and those of your opponent. The overall strategy chosen does not limit the use of other tactics. 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. Tactic #33 (Bluff). After you have evaluated these factors.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. as well as their bargaining history and financial and political positions. If you prefer to take a firm and direct approach. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. Some of the tactics listed in this book are only suitable for single-session negotiations. For example. 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. Are there any outside people who might influence the process. cooperative manner. A neutral. Before you can do this. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). and Tactic #48 (Walk Away). Identify all outside influences and hidden agendas before you develop your strategy.
34 50 Practical Negotiation Tactics . half-serious. the seller’s agent called the buyer about the property. I offer half the asking price. The agent explained that the seller was desperate. and the buyer was able to completely renovate the house and still have a great deal. If there is a significant weakness in your position. The buyer loved the location. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). two people on the team will be more successful because they evoke different emotions from the other side.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. His teenage sons had “trashed” the house. 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). For example. By assuming opposing roles. The buyer said he wasn’t interested. but the inside was a complete turnoff.” The agent took the offer to the seller. with “All right. The desperate owner agreed. 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. “Please make any offer—they are motivated!” The buyer responded. Weeks later.
000. with no success. If you consider the demand ridiculous. as well. but the house has increased in value. and just refuses to reduce it. Your demand should be high enough to give you room to compromise. and then look at the demand from your opponent’s perspective. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.000.000. We also think that the neighborhood has improved over the last few years. Surely there’s some flexibility in your asking price. Planning a Strategy 35 . And I don’t see a lot of difference in the neighborhood. so do not underestimate what you might be able to achieve. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. one buyer shows some interest. Carol: We really want to sell. but not so high as to end the negotiations before they begin. Be realistic. so think this through well ahead of time. six years ago you bought it for $60. it is likely that your opponent will. Each time. but the redecorating is of little value. Buyer: The air conditioning might have increased the value of the house. your request must not be so low that the other party concludes that you are not negotiating in good faith. First. However. She has had it on and off the market for the last five years. It’s a good neighborhood.000 is very high. but we simply can’t take less than $160. Carol: Maybe not. You are not likely to get more than you request. Buyer: We really like the house. Carol wants $160. but certainly not exceptional in any way. we think $160. Anyone buying the house would want to change wall colors or add new carpets.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Finally. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. The market hasn’t gone up that much in six years. but quite frankly. After all.
We’re curious. Inquiries to other law firms were not very helpful because in almost all of the instances. the founders of the firm.000? Carol: We really can’t take less than $160. In any event. the buyer took it as a signal that either Carol didn’t want to sell. 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.000 offer by coming down in price at least a little. Here’s how the initial negotiations went: Partners: Well. as to how you think the name is going to benefit you. but they have no idea what the value of their firm’s name might be in this nearby city. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. The other law firm was prepared to pay $100.Buyer: What if we offered you $100. and then $10. Example 2 The law firm of Bits & Bites was a Sioux City institution. When Carol refused to budge. were still alive. though. The partners are interested in selling the name.000. 36 50 Practical Negotiation Tactics . Carol drove off a potential buyer by setting an asking price that was just too high.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. Neither Edward Bits nor Edmund Bites. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. or she has unreal expectations. enjoying a statewide reputation for quality representation. we are certainly interested in your request to “buy” our firm name to use in your city. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites.000 immediately.
that you anticipate to build a very profitable law firm. (concerned about loosing the opportunity) Wait. I guess this is just not something we’ll be able to pursue. Yes. I really don’t feel comfortable doing that now. then. one of these two attorneys carries the surname of the firm they are leaving. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . I’m kind of embarrassed now. and then 10% of your profits each year for as long as you use the name. Thanks so much for meeting with me.000 initially. that is a very high number. Let’s just pretend this didn’t happen.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. We weren’t really thinking about that amount of money. but we get to keep all of the money we’ve received up to that point. What number were you thinking about? Well. To offer it now would be an insult. And even though you don’t have an office in our city. expect to pay for that. because you are in the state capital and your firm has handled a lot of high-profile political cases. we do. (surprised) Well. of course. that’s just our initial figure. And we. we want $500. it would be impossible to create a new name out of the names of our key partners. We probably won’t be insulted. because we were not even close to that number. Using the Bits & Bites name can only enhance our profitability. Well. Give us some range. We should assume. If at any time we feel that you have “harmed” our name. In every instance. starting with the ten partners you describe. we reserve the right to withdraw our permission. you have a very solid reputation there. So.
Both parties were probably at a disadvantage. since they had initiated the contact.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. 38 50 Practical Negotiation Tactics . Either side could have asked for too much. It immediately dropped the idea. because there was no “objective” criteria available to help them set a reasonable price. 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. rather than negotiate. In this situation.
Paula: Go ahead and ride it home. They cost about $300. Andy and Paula. Peggy: I’m hearing one thing from Paula and another from Andy. and I know how you take care of things. I can use them. Peggy: So. I want to keep those. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Andy: I want them… Paula: Go ahead and take them. I’ll go home and you can call me if you two can reach an agreement.400 if the catcher and can are included. Peggy: Planning a Strategy 39 . etc. Andy: No. not for $1.200! We should get $1. I don’t know what the deal is now.200. And take the leaf-catcher attachment and the gas can. while another acts difficult. so I’ll take it. Peggy: I assumed they went with the mower. I heard that you want to sell your riding mower. Andy: No. since they are sitting out in the driveway with it. Peggy. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. only three years ago.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Half what it cost us new. (bad guy) and implies that his or her side will hold firm on their demands. Andy and Paula: Yes. Example 1 So. we won’t need it at the new condo. angry. Peggy: That’s fair. what’s your price? Andy: $1. you’re really moving! I hate to see you leave. threatening.
Sandy. Liz: But we still want to renew your contract. You are located outside our primary service area. and your training programs. Sandy. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). your account has taken too much time. We estimated that it has cost us more than $50.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Sandy: What? First of all. 40 50 Practical Negotiation Tactics . She very wisely recognized the routine and forced Andy and Paula to give her a clear. firm offer if they decided to continue negotiations. And we want to change the 24-hour service response time to 48 hours. Miguel: Well.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. causing our reps to spend hours on the road. And we need to add a clause that holds your company responsible for machine damages. Let’s talk. we’ve been fairly happy with your responsiveness.000 per month is one of the highest in town. the quality of the technicians’ work. we’re here to negotiate a new service agreement. For the past three years. And cut the training hours from 55 to 20. Miguel: But not at this ridiculous rate. your rate of $3.000 in service calls last year alone because your damn people don’t take care of the equipment. She realized that it put her in an impossible negotiating position. perhaps even unintentionally. Miguel: I’ve figured $4.
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. (Three hours later) I’m back. I’ll explain on the way back to the office. Our customer base has grown. I’m going on to lunch. Sandy. Sandy. Sandy. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Any luck. Planning a Strategy 41 .m. Miguel! We’ve worked out a deal I think you can live with.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. I want to keep you as a customer. these terms will put me out of business—I’m a small 20-person operation. you two? Good news. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. even though it was far above the previous contract. I’m afraid our relationship is over. I’ll stop back about 2:00 p. but Miguel’s right. If not. Liz. I hope you can meet my terms.
I noticed this. I have a problem with my recent bill and my billing rate. when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company. because we have had a sick relative out of town and we used long distance a lot this past month. The fault was partly his because he did not stay on top of changes. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance.Tactic 9: Control Your Emotions Stay cool. 42 50 Practical Negotiation Tactics . How may I help you? Hello. but I recently was sold a $. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. he was very unhappy. This will put you at a distinct disadvantage from this point on. in fact. and might even harden your opponent into an unfavorable position (for you or for both of you). It seems that the rate you are charging me on my home phone is $1.00 a minute. made some very good purchase decisions for his small business. such as deals on computer packages and phone services. He decided that the best approach was to act indignant when he spoke to the company representative. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. So. 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. He had. 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 company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. It hasn’t been increased at any time. I would think you would have given me the best rate you offer new customers. Customer representative: Let me pull up your account. But I am able to offer you a $. But as a very good customer of yours.I expected the bill to be higher than usual. to begin now. I would have known I was paying too much. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly.10 per minute rate on your long-distance service. Had you brought this to our attention before. (beginning to sound irritated. Well. how would anyone who might only have residential service even know to ask? Well. and I also realize that if I had examined my bill closely. I realize that that might be the rate I started paying when I first took your service over eight years ago. Mike. we certainly would have discussed your options. of course it is not always possible to give existing customers some of the “offers” we have out. I see that the rate you are being charged is the rate we offer for the type of service you have with us. but this was quite a shock. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 .
she kept Mike as a residential customer as well as a business customer. and I want to speak to someone in authority so I can terminate my service. I would hope that you would credit my account for this better rate for past service. But I’m looking at a $500 longdistance bill. which should rightly be $50. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. In doing so. but I can’t do that. Wait—I’ll get my supervisor. there’s no reason for this conversation to continue. a long-time customer of your company. We certainly don’t want to lose you as a customer. strategic anger and abusive behavior. The best we can do is fix the rate for the future. don’t think this is directed at you personally. Mike’s willingness to show a measured “flare of temper” brought results. after all. between controlled.10 per minute. controlled voice) I need to talk to someone who can do it immediately. and I should be treated with more respect! I’m sorry. He was walking a thin line. either. If you can’t get me someone to talk to. 44 50 Practical Negotiation Tactics .Mike: I would imagine so. The latter would not have produced the desired results. however. I … (interrupting and in a stern. (with a much angrier tone) Madam. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. I am. but I am very angry with Over-the-Air Company.
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. Working with fireworks is working with explosives. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. and it’s not what we’re even talking about. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. They will be putting the plant AND their fellow workers at risk by not being here. 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. they would become dissatisfied with their pay and want their base pay increased. and you just can’t be too careful. I’ve got to have the employees with the most experience to protect this place. The owner told the employees that he was worried that during the overtime shifts. lesssenior employees might be at greater risk of injury because they have to handle explosives. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . and that they should be asking for a fairer base wage for the work they do for you. On those overtime shifts. and it’s getting old. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. that’s just not fair. The employees’ negotiator finally decided to use “indignation” to break the stalemate. Owner: Now.
Sit down. don’t be so hasty.) Now. 46 50 Practical Negotiation Tactics . The safety of the plant demands it! (standing up to leave) This is just ridiculous. After the employees’ negotiator threatened to walk out. You are not addressing the real issue for you: money. The end result was that the most-senior employees did win the right to refuse overtime. No one who takes a job with us can be unaware of that. sit down. The negotiator was also running a risk with his flare of temper. now. most of them continued to take all the overtime they could get. (He begins to walk out. but not all? Conclusion The owner was on shaky ground with this one. But we protect our people. Either they are properly protected.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. In practice. But the fireworks business is a business that involves risk. or they’re not. Then you can’t have it both ways. That’s all. though. 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. the negotiator would have had to find a way back into the negotiations without losing ground. he became more reasonable. What if we were to agree that the senior employees could refuse half of the overtime offered to them. not at all. either the employees are properly trained. or they’re not. I’m not coming back. Had the owner let him leave.
Then Susan. and split the proceeds. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate.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. Mike. I’ll give you 48 hours to decide the price.” is the recommendation of Howard Raiffa. with winner taking all. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). Planning a Strategy 47 . (two days later) Mary Anne: Well. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. A fourth option. you’re the oldest. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. Mike: Mary Anne. 3) They can agree to sell the object to a third party. The second party then decides to either buy it at that price and pay the first party. I’m willing to pay or let it go for $800. 2) They can flip a coin. All the rest of the estate has been divided among the family. so you set a price at which you agree to buy or sell the coffee grinder. a well-known negotiations professor from Harvard University. with the highest bidder paying the amount to the other side in compensation for their loss. The first party decides on a price for which he or she will either buy or sell the object to the second party. called the “Reciprocal Buy-Sell Offer. Susan. Both sisters covet it. However. the executor of the estate. since this one is in perfect shape and it was Mother’s.
and then decide how much more “emotional value” it held. Both sisters felt that the process enabled them to resolve the issue fairly. They accepted his suggestion to use the “reciprocal buy-sell strategy. After I open the bids. I’ll pick it up tonight. Lectures on Negotiation Analysis. Both came to Raiffa to help negotiate a settlement. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. I choose to buy it. I suggest a slight modification to the process. You will both agree. 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. (sixty days later) 48 50 Practical Negotiation Tactics .” Howard: Since in this case you are talking about a multi-million-dollar business. Thanks for making this last step as easy as possible.Susan: Mike: Well. They thus were able to determine the highest price each was willing to pay for it or receive for it. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). to submit a sealed offer to buy/sell the business sixty days from today. which will bind us to the outcome. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. in writing. Here is my check for $800.
Conclusion Both parties wanted to keep the business. Abe. but only if they could become the sole owner. and we close by July 1st. Agreed. Planning a Strategy 49 . Bobby. your bid is $190 million. you agree to sell your half-interest to Bobby for $180 million. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. and to close within ninety days.Howard: Abe: Bobby: Abe. And I will arrange financing to pay you $180 million to become sole owner. 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. your bid is $170 million. and both men had carefully estimated the market value of half the business. Bobby was willing to pay more than Abe to remain sole owner. I will arrange to sell him my half-interest for $180 million.
This approach can also be reversed: The wife in this situation is a banker. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. The husband found the dimensions of the couches in the brochures and Web sites. and created a spreadsheet to compare the five best-rated couches on their list.” but there were substantial differences in price—differences that the wife did not see as a problem. It can also work in reverse: establishing the other person as the expert. He thus ended up having greater negotiating power. she glanced at it and immediately deferred to his opinion.” and then argue for the frugal alternative. Looking at these statistics. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . Example 1 A young couple were discussing a possible purchase of new furniture for their living room. and forcing him or her to control the discussion of the issue. Based on seating capacity. They both expressed an interest in finding a couch that offered the most “interior” space. When he showed his wife the detailed spreadsheet. The couple decided to limit their selection to those rated “excellent. This strategy worked. he decided upon a strategy: First establish himself as the “dimension expert. Conclusion The husband became the “expert” in this situation by doing the homework. the one that was the most expensive was superior. When it came to comfort. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. the one he wanted (one of the least-expensive) was superior. and the husband felt like he saved them hundreds of dollars.
and should therefore handle the problem. Preferred Provider Organizations (PPOs). he argues that she is the expert. you gain an edge when negotiating a new plan for your company.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 . and Point of Service (POS) plans. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. 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).
I wouldn’t care so much. Russ: 52 50 Practical Negotiation Tactics . Usually. and their mother was tired of it. because I am so conscientious about my paper route. the last piece of cake will get thrown away. you both want to complete negotiations by a certain date. you want to reach an agreement that is favorable to an outside party. and then asked their mom for a chance to negotiate with each other. here’s what they said to her: I think I should be rewarded with the piece of cake. These positive things are part of your goals and objectives. like we usually have. she decided to try something different. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. They immediately began to fight over it. That simply rewards your continual squabbling. This time.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. If this was chocolate icing. Example 1 When Russ and Bill got home from school. they saw that there was one piece of cake left over from their mom’s bridge party. Be clear on what you have in common at the start. particularly when things seem to be at a standstill. Unless you can convince me otherwise. and neither boy was very happy. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. I missed dessert the other night because I had to get to baseball practice. The boys quickly huddled. and so on. point them out at the very beginning of negotiations and refer to them throughout the process. and I really love the banana/butternut/ sour cream frosting on this cake. The two boys fought over the last piece of everything. I also took out the garbage last week without being asked twice. When they boys returned. she made them share whatever it was. neither of you want to be embarrassed at the outcome.
I helped with the bags without being asked twice. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. and that’s not my favorite either. and her children were in school. Customers have started to park in nearby apartment lots. and better than a fast-food restaurant with late-night hours and a drive-through window. We really want you to go back to your original times. I can have the part with the icing and Bill can have the part with the cake and filling. she got a visit from some of the residents. One day. Residents: Marilyn. That sounds like a wonderful solution. so these hours worked out well.m.m. and keeps it open longer so she can attract customers on their way to and from work. Now that her children are in college.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. because there is no parking along the street during morning and evening rush hours.m. and I really like white cake. Marilyn originally set her shop’s hours for 10:00 a. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. Planning a Strategy 53 . 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. your new shop hours have caused your customers to park in our parking spaces. This cake is white cake. she opens her shop at 7:30 a. to 3:00 p. It was the type of shop the nearby residents preferred. The last cake we had was chocolate cake. so that your customers can park on the street. We realized that if we cut the cake lengthwise.
54 50 Practical Negotiation Tactics . Most of our residents are gone by 8:00 a. Marilyn: Conclusion Marilyn needed the extra parking.m... Do you? Marilyn: No. Lets try it. Identifying their shared interests caused the nearby residents and the customers to reach agreement. we have to be willing to tow the cars that violate it. and usually the car is gone by the time a tow truck shows up anyway.m.? Residents: We certainly want you to stay in business here. Can’t you post signs that tell non-residents not to park in the lots? Residents: The problem is that for the signs to be very effective. and 6:00 p. Between 7:30 a. and 9:00 a. let’s see what the options are. I have to convince them to come before work. The shared parking arrangement did work out for Marilyn.m.m. And we don’t think you want your customers’ cars towed. or so anyway. if residents haven’t left for work yet. and 9:00 a. But in order to keep my new customers.00 a. then we’ll try and accommodate you.m.. Okay. and I close at 4:00 p. if I go ahead and open the shop at 7:30 a.m. The parking lot used for apartment residents is probably full from 7:30– 9. So. But I really am increasing my sales by being open longer hours. and between 4:00 p. We think they’ll be agreeable to the morning parking.m. and see if it works.m.m. I don’t think that would be very good for business. I really need that extra income to stay in business. the off-street lots probably won’t be used by my customers. and the residents needed Marilyn’s shop. my customers can’t park on the street.I’m sorry this is happening. If you need to have the shop open more hours. and is probably empty in the afternoon if they haven’t gotten home yet. It is very costly to have cars towed. rather than after work. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a.m.
but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. A few hours? I can’t—I’ve got to leave shortly for the drive home. How can I do that? You all live in this town and you know this house. let’s all take two hours to look around and make a list of things we might want. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. I don’t. the first. A deadline can help you make the best possible agreement in the shortest amount of time. how should we go about dividing up the furniture and possessions? I can’t talk about it. Example 1 Four adult children have gathered at the home of their recently deceased mother. one at a time: the youngest. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. and start choosing things. That will take days! I haven’t been in this house for twelve years. let’s all take a few hours to look around. we can each take turns selecting things … Like each tool or dish. 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). etc. But at Planning a Strategy 55 . Then we can sit down at this table at 3:00 p. 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. Well. Well.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations.m. We just don’t have the time … We’ve got to do this—the house is sold! Okay.
we all leave. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. However. being the oldest. David: I understand your concern.Sue: Mary: Jenny: 5:00 p.. And besides. 56 50 Practical Negotiation Tactics . Allan: Let me confer with the city attorneys. December 31. Agreed. can sell or give away what is left. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. if we are not finished. Okay. Example 2 Allan: As the negotiating team for the city. Sue.m. this is December 29. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. if I cannot carry a negotiated and signed deal to my board by noon on December 31. and I appreciate your interest in the historic structure. your attorneys know the tax laws. All of us must come back before Saturday to take what is ours—agreed? Okay.
Obviously. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. and I don’t like it.) I understand the December 31 deadline.Allan: (One hour later. Planning a Strategy 57 . Conclusion Knowing the external deadline gave David a significant negotiating edge. Let’s continue. we can’t get the reports we wanted in 48 hours.
His mother disapproves of his study habits. while watching TV. He knows that a D will mean that he will have to change the way he studies. There will be times during a negotiation when you will want to catch your opponent off-guard. but remember that both sides have weaknesses. and you can neutralize its effect on the negotiations. But don’t lose it again. so he was able to prevail upon her to let him continue. 58 50 Practical Negotiation Tactics . Mom: All right. but I have a problem in my Spanish class. first-quarter grades are coming out at the end of the week. Control the use of the information. Did you buy it? Jason: Yes. Now. The objective is to negotiate from a position of strength. Jason: Mom. we need to talk. I’ll give you money for it. and I missed some assignments. and one of the ways to do that is to reveal a weakness at the beginning. Then the teacher went back to the first one. We had one at the beginning of the semester that we were using pretty often. He decided to preempt the discussion in order to make the best deal. as well as strengths. Mom: What’s that? Jason: A few weeks ago I lost my workbook. Have a clear goal in mind AND all the information you need to make your points. One day mine disappeared. and this usually means having all the right information. Mom: I gave you money to buy a workbook a few weeks ago. Unfortunately. before your opponent tries to catch you off-guard.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. and Jason knows he is getting a D in Spanish. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. as well as those of the other side. but his grades are good. but that was actually a different workbook. I’ll need to buy it again. and we used it a couple of times. don’t get mad. I bought the second one.
and the D is directly related to my losing the book. I don’t think you’re taking your schoolwork seriously enough. Its owners found out that at least three other buyers had been in contact with Jane. Mom: Well. Mom. she trusted it more. Jason: Spanish is just one class. Mom: Well. All of my other classes are A. I’m sorry. Pizza Boy was interested and had even made inquiries about the property. Although his Spanish grade was only a C+. my study habits are okay.Jason: Another thing. I’ll give you more time. But that Spanish grade needs to come up to a B!! Jason: Okay. all right. so there’s no reason to think I need to change my study habits. Thanks. Since I missed some assignments. B. If I don’t pull the D up to a C or better. The work I did turn in was fine.(maybe C+). Conclusion All of Jason’s grades did improve over the next quarter. And I know I have to be better about getting in all of my assignments. English. but all three deals Planning a Strategy 59 . And those are hard classes—Algebra. he was able to continue to study the way he wanted to. I think I can do that. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. The location was ideal for a convenience store or a fast-food restaurant. or borderline B. 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. then I’ll agree to make changes. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. Obviously. Environmental Science. His explanation made sense. but I think you do need to change your study habits. It’s because I didn’t have the book. and since he offered her the information up front. Example 2 Jane once owned a piece of property she wanted very much to sell.
we’re not interested in neighborhood fights. Pizza Boy: Well. Pizza Boy: Well. there were no unpleasant surprises to stop the deal. she will want you to think it’s the whole neighborhood. really. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. which was way below the price they were actually willing to pay. let’s assume that you are right. and it’s zoned for commercial use. What are you asking for the property? Conclusion Jane told them her asking price. A tentative deal was signed. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. I’m very happy you’re interested in my property. either. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. What are her grounds for complaining? Jane: She doesn’t have any. however. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. since they were well aware of the negatives. Actually. When the neighbor heard about the new buyer. the other interested buyers already have businesses in the neighborhood. though. I think you’ll find that this is only one person. I know. They decided not to fight a disgruntled neighbor. Pizza Boy: We’ve checked the property out. When she contacts you. This is how the negotiations went: Jane: Pizza Boy. Furthermore. The real problem. You are a big enough corporation to withstand her objections. But unlike your company. Pizza Boy was prepared for her call. 60 50 Practical Negotiation Tactics .had fallen through. I’m sure. however. it’s only the neighbor to the right of the property who has a problem. and was able to politely ignore her. she started her campaign to keep them from closing the deal. Jane: Oh.
Adapted from Labor Relations and Collective Bargaining. 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. This is a practical starting point that will not anger the other side (and might even be expected). by Michael R. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party.500) Fig.000) Settlement Range ($22. 190–192. (2004).000 22 23 24 25 26 27 Initial Offer $28. 2: Distributive Bargaining Process. Exchanging Initial Offers 61 . “Distributive” bargaining (“win-lose” or “zero sum”) is used. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. as illustrated in the following figure: Seller Resistance Point ($22. None is as important as the first one. 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.750–$25.000) Target Point ($23. The negotiator firmly states that it is their best offer in an attempt to gain a nice. such as proposing to continue at the current rate or price. quick agreement.000 Buyer Initial Offer ($21. Another common strategy is to start with the status quo. Carrell and Christina Heavrin.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.750) Target Point ($24. for example.500) M $21.500) Resistance Point ($25. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.
these points have set the outer limits. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. the process quickly narrows to the range between the initial offers. 62 50 Practical Negotiation Tactics . the other side does not agree to this value). In the example.In this example. A target point is the desired settlement value a party has set as a goal when negotiations begin. thus producing a true “win-win” negotiation. When the two parties agree to a price within the range. 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). See Tactic #18: Agree on Something As Soon As You Can. usually.” but the settlement price. 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. each initial offer ($21.000. 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. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. 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). if the buyer’s initial offer was $25. After initial offers are exchanged. You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. The settlement range is the distance between the resistance points. 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). and is the range in which most negotiations actually occur. it is termed the settlement point – not the “right price” or “fair price.000 and $28.000) is reasonable.
m. so we’ll have the party from 7:00 p. There are many ways to use this strategy. and presumably had an agreement.m. A caucus gives you an opportunity to work out problems with your own team in private. Her mom and dad had already talked about it privately. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. or if a member takes on a role in the negotiations that has not been assigned to them. Mom: We’re planning on having your party here on Saturday night. If the negotiations have suddenly gone in an unanticipated direction. We don’t want it to be a late evening. make use of the opportunity to call for a caucus. and I already have 25 names. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . the negotiations got out of hand when Shelly’s dad forgot what had been decided. Shelly. so her parents sat down with their daughter to discuss the details. You can invite up to 20 of your friends. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. 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. without revealing their ideas to the other side. because it might disturb the neighbors. Example 1 Shelly’s “Sweet Sixteen” party was coming up. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. Unfortunately.–10:00 p. If negotiations seem stalled. Shelly: Twenty friends? You’re kidding! I’ve just started on my list.Tactic 15: Caucus If you are part of a negotiating team. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. If the negotiations are heated. We’ll just have chips and soda. If the team is feeling pressure to concede on certain items. a caucus can be used as a break to calm the situation down.
Time out! Dad.Dad: Mom: Dad: Shelly: Mom: Shelly: Mom: Shelly: Dad: Mom: Dad: Shelly: Dad: Mom: on the friends I’ve made over the summer at the pool. (excited) That would be so cool. Mom! This is my “Sweet Sixteen” party. Shelly. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. And midnight is definitely too late. I’m sure we can ask them to tone it down a little.m. Oh. I guess the VFW will work. I think we can handle a few more kids—how about 35? And midnight sounds okay. and then the number of kids won’t matter. okay. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . we need to talk. In fact. Actually. we’ll call you when we’re ready. Jerry from down the street is in a really good band that all of the crowd likes. That would be great! It would keep everyone entertained. Dad. (with some irritation) I’m not sure. We’ll get a band—everyone does. (During the caucus. It’s special!!! Well. we could rent the VFW hall. And they can’t go home at 10:00 p. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds.” They would never expect a party to end before midnight.—that’s so “baby. I think the band would be fine. We could play records and you guys could dance. Your dad and I already talked about this and agreed that 20 guests would be the limit. alone. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. That sounds like too many for here at the house.
we will be better able to chaperone.m. But you are limited to 40. and you can invite more friends. but no Sweet Sixteen birthday party decorations. Okay. A DJ? I guess that’s okay. too? No way!! I want presents!! Conclusion In spite of their prior planning. And we’re serving chips and sodas. please!! 11:00 p. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. midnight. When they called Shelly back in. Agreed. Does that mean no presents. causing them to lose control and make compromises they hadn’t intended to make. Dad. this mom-and-dad negotiating team became unglued during the negotiations. Your mom and I agree—11:00 p. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening.) Okay.m. That way. can’t we? No band. is for little kids!! No. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . sorry. Example 2 The contract negotiations between the company and the union had been going on for days. to 11:00 p. and we will need to approve the list. That’s so lame.m. her mom presented the revised proposal. All right. but we’ll schedule the party for 8:00 p. but your dad and I agree on getting a DJ to play. But we can have the band. we’re going to rent the VFW hall.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided.m. and not a huge production.
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.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 tuition benefits will encourage the workers to be prepared for new job opportunities. 66 50 Practical Negotiation Tactics . Tuition in place of health insurances? They’ll think I’ve lost my mind. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. What is this. Union negotiator #2: Please—just a moment outside. it’s a good proposal. The company’s negotiator didn’t recognize the misunderstanding. and the following conversation occurred. A lot of employees have spouses who can get health insurance coverage through their work. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. many will want to use it for their children’s education. The union’s lead negotiator misunderstood the proposal. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. With the cost of college educations so high. Union: (angrily) I’m not presenting this proposal to my people.
I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. Good. Negotiator #1 regained his footing. the parties returned to the room. and the parties were able to complete their negotiations.Union: Union: Company: Okay. Exchanging Initial Offers 67 . let’s move on. Now. I thought that the contract would cover one or the other for everyone. and I apologize for explaining it poorly. I think that what you’re proposing is a really good idea. we’ll be back in 5 minutes. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session.) I’m sorry.
” Party B thinks that A has sacrificed one important objective to gain another. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . Mr. Hobbs: Yes. but he makes a mental note to use color as a “throwaway” item. and noticed that none of the vehicles have a green exterior. but in reality. quickly checked the dealer’s inventory of sport utility vehicles in stock. it’s a great car and a fair deal. but the key to making it work is to include the throwaways in an initial list of demands OR add it in at a strategic time. But for this price. Here’s how it works: Party A exchanges the item for something of true value. so be sure you present them in a way that suggests importance.” Throwaway items are those things that hold little or no value to you. this conversation takes place: Hobbs: Yes. At a point late in the negotiations. It is a useful tactic in any negotiations.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. according to the Consumer Reports listing of the cost of the vehicle. I can go to another dealer and get a green exterior—the color I like best. but … Salesman: But what? Hobbs: Well. I know. you are making $200 profit over the true dealer’s cost. Salesman: Let me talk to my manager. Salesman: Well. when the two sides are only a few dollars apart. according to my figures. you don’t want your opponent to know what these things are. He doesn’t really care about the color of the new vehicle. A has gained something of true value and given up nothing he values in return. not revealing that the item exchanged is a “throwaway. Hobbs. However. I’ll go get him. we’ve got expenses and we need to make some profit. Example 1 The buyer.
Miguel. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I . Employees will be paid time-and-a half for each of these days. Example 2 The office supervisor told the three internal sales representatives (Jenny. I’ll take the red one for $100 less. The days in question are: Exchanging Initial Offers 69 . and seniority will be used to determine who gets to choose the first day.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. 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. Then we have a deal. Hobbs successfully chose color as a throwaway item. The three are sitting at a lunch table to discuss the schedule. All three employees must agree to the schedule. Conclusion Mr. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth).... The manager was convinced enough to sacrifice a final $100 for the throwaway. At the very end of the negotiations.no it’s not.
January 2 None of the three are totally happy with the results. December 30. 24. January 1 Carolyn: December 24. December 26. They agree. She proposes to work five days. 30. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children.November 25 (the day after Thanksgiving) December 23. December 31 Miguel: November 25. but that is a secondary consideration. 31. and each chooses their days to work: Carolyn: December 27. 27. She would actually prefer to work the extra days and get paid time-and-a half. 26. each made a first choice of days they will work. 31 January 1. 26 Miguel: November 25. They all agreed to their schedules. 2 Jenny: December 23. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. 70 50 Practical Negotiation Tactics . Carolyn has decided to use as a “throwaway” the number of days she will work (previously. They have decided to start over. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. 30. December 27. A second and third round produced the following allocation: Jenny: December 23. January 1. 2 In the first round of negotiation. if they let her choose the two days she will be off and the five days she will work. She got what she wanted by giving up something she did not value: the two other days. This would allow Jenny and Miguel to each work only two days. in exchange for giving up earlier choices due to seniority.
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.000 with no mortgage on it.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. Autumn and Angela. and the stock and distribute the proceeds. and a collection of antique furniture. along with the cash.000. one might package all of the financial issues in one group and negotiate on that package as one issue. can indicate that something you think is minor is really a major concern to your opponent. three ways. When the girls decided it was time to talk about the estate. Anne and her sisters. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. a house valued at $250. A reluctance to include one particular financial item with other financial issues. The estate’s assets included a checking and savings account totaling $450. their mom left specific pieces of jewelry and art in the will to each of the girls. Example 1 When their mother died at age 82. In addition. we need to sell the house. The house and much of the furniture has been in the Exchanging Initial Offers 71 . Anne: As I see it. but I’d like to talk about the house and the furniture. 300 shares of stock in a pharmaceutical company. for example. they met at the house. were faced with the task of selling the house and disposing of their mom’s personal belongings. realizing that the total cost of a deal might make or break the agreement. For example. the antiques. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. it is often helpful to package the items in distinct groups and then deal with each package separately. 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.
If Angela wants to hold on to her stock. and letting everything else wait for another discussion. What would you think about agreeing today to distribute the cash and stock three ways. It’s a buyer’s market now. and now that we have them. and if we wait a couple of years. Frankly. Anne: Okay. Anne: But that means we have to continue to take care of the house and its contents. Autumn: I think its awfully soon to be making these kinds of decisions. we’d get a lot more for them. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. so I will be able to keep tabs on it. we will have a more valuable asset. Mother was born here and grew up here.” She gave those things to us. we’ll discuss again what happens to the house and the antiques. With no one living here. There was a reason why she gave us what she did. and use it to fix the house up? Then when we make a decision. don’t you think? Angela: Maybe. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . we can sell ours. she’s free to do so. Angela: Now’s not a good time to sell either the stock or the house and antiques. Why don’t we leave some of the cash in the bank. we’re really free to do with them what we want. Autumn: Sounds good to me. Soon. Angela: I live close by. And we’ll fix the house up. I’d really be interested in talking a trade for some of them. but the operative word is “give. I’d like to talk about the art works Mom left each of us.family for years.000 in the bank and distribute the remainder three ways. I’d like it all to stay in the family. 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. If we want. it’s a magnet for vandals. So we agree: We’ll leave $30. We’ll split the stock three ways. In fact.
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. etc. Several issues also needed to be addressed: the ability of employees to move up through the organization. and establishing a work schedule to accommodate evening and weekend clients. the jewelry. The negotiations on the other items—the house. what kind of paid leaves there will be (personal. Anne: Same with me. May I suggest that we divide the items into three areas. Angela: That’s fine. vacation. The following tasks needed to be a accomplished: establishing basic pay schedules. sick. including benefits for partners in non-traditional relationships. health benefits. Employees: We’ve got a lot of items to cover. and the art works—will be more difficult. The second: working conditions (work schedules and promotional opportunities). deciding whether there would be annual wage increases as well as merit increases. funeral. The third: Ben- Exchanging Initial Offers 73 . tuition benefits. but I’m making no commitment to trade. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director.). the antiques. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. and the assignment of the limited number of parking spaces.
so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. to be honest with you. Wages should not include merit pay raises. Executive Director: Sounds like a good agenda. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. I think it also makes sense to include tuition benefits in the Working Conditions category. but the parties were able to come to agreement because the wage issue had been resolved. Executive Director: Well. paid leave times. 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. Let’s get started. that makes sense. tuition benefits. Employees: Okay. 74 50 Practical Negotiation Tactics . 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. but I’d change your list.efits (health insurance. Also. the paid leave categories are pretty clearly defined. as well. we are an agency supported generally by public funding. because they’re really an incentive for better performance. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. So I’d like to see us get through the wage issues quickly and then move on. I would include that under the Working Conditions category. and the parking spaces). Later negotiations were difficult. Executive Director: I think it’s a good idea to group items together.
They had also furnished their house on credit. and that you are entering into the negotiations with the intent to reach agreement. and she agreed. Exchanging Initial Offers 75 . Kathy borrowed more money to go to graduate school full-time. Their “property division” was mostly about dividing their debts. with her promotion sending her out of town. too. The couple hoped to do the divorce without involving lawyers in order to save money. It was her idea to buy the house and go into debt to furnish it. They met and married in college. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. It indicates to your opponent that you are a reasonable negotiator. Now. Tim began working right after graduation. rather than disposing of assets.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. The discussion might become very heated. Tim worried that he would be stuck with all of the debt. and might not even be able to keep the house. are divorcing. without suggesting any changes or modifications. sets the stage for mutual respect and communication. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. You can also make an effort to agree on something your opponent offers early in the negotiations. after a brief marriage. and both have good jobs. An initial agreement. because Tim felt that Kathy had taken advantage of him during the marriage. You signed those papers. Example 1 Tim and Kathy. They were in the middle of buying a house. no matter how insignificant. Kathy’s first job paid more than Tim’s because she had a graduate degree. They have no children. Tim: You might be leaving town. Kathy was asked by her employer to relocate to another city.
about the house and furnishings. yes. Tim: Okay. Kathy: I suppose we should look at the school loans next.Kathy: Hey. Example 2 ABC Company. hold on. a wholesale art dealer. I can hardly argue with that. I think it only fair that I take over repayment of all the school loans. If both of us had been working the year I went to graduate school. as you remember. and he could pay it in annual installments over a five-year period. an art gallery. The monthly payments are about the same. What do you want to do about them? Conclusion Having agreed to two items very quickly. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. When we bought them two years ago. Kathy: Now. 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. as long as the cost was approximately the same. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan.. I got my convertible. I think that makes sense. Frankly. we would have paid down our school loans more. Okay. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. Kathy and Tim were able to agree that Tim would take over paying for the house and furnishings and Kathy would get 50% of the equity accrued by the time of the divorce. I don’t intend to “stick” you with anything. and XYZ Co. ABC usually uses UPS 76 50 Practical Negotiation Tactics . Tim: Well. 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. They also agreed that Tim wouldn’t have to pay her that amount for five years.
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. and began preparing to return all of the artwork to ABC. However. 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 refused to pay WeCanShipArt until it received payment from XYZ. and arrived on time and apparently in good condition. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. 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. XYZ decided to cancel the promotional sale that was to start on Wednesday. Unfortunately. when the boxes were opened on Monday. The other times this happened. The artworks filled four boxes. but only if you let us ship it UPS. XYZ: ABC: Exchanging Initial Offers 77 . ABC’s position was that the artwork was fine when it left their location. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute.to ship artwork. and the boxes showed no external damage. XYZ’s manager failed to open the boxes or remove the artworks. and put the company on notice that it was not going to accept the order because the planned sale needed a dozen works of art to make it profitable. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. XYZ contacted ABC immediately. and we will continue to discuss who is liable for the three water-damaged works. ABC: Before we begin. We’ll expect you to pay for the 12 works that will be in your show. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. or else the box was damaged in XYZ’s warehouse. They arrived right before the holiday weekend began. There was no indication that the gallery’s electricity had gone out over the weekend.
the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. they will split the cost of the three damaged pieces three ways. You can’t just ignore us. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. we’re ruined. and if word gets out that you think it was. Having reached an amiable solution to the immediate problem. that’s okay with me if it’s okay with XYZ. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. I can’t see how I can refuse that. generated a like offer from WeCanShipArt and a reasonable response from XYZ. 78 50 Practical Negotiation Tactics . at its financial risk. WeCanShipArt: Wait a minute. If we don’t make the deadline. The artwork was not damaged while in our control. They also agreed that if the investigations are not conclusive.m. XYZ: Okay. And we’ll eat the cost of shipping. Now. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. regardless of where the original three artworks were damaged.XYZ: Agreed. ABC: Well. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem.
We plan to put an ad in the paper next week.000 for it six years ago. period. Exchanging Initial Offers 79 . 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. and it came with the bush hog and the leaf pick-up. and even more hours in the fall picking up leaves. 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. I don’t want to quibble. 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.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. but if you’re interested. Why don’t you give me a price? Colleen: Oh. consider using the “First and Best” tactic. 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. Ann: That sounds great! I don’t want this to affect our friendship. Okay? No quibbling. You must mean what you say and be prepared to walk away from an unacceptable offer. Example 1 Colleen: Ann. I don’t have any idea. What do you want for it? Colleen: Well. no hard feelings either way. we paid $5. The “first and best” tactic enabled them to settle the matter easily. we’ll sell it to you. Ann: Well. we plan on selling our Ford tractor when we move. I know you and Jeff said you’d like one because you have about five acres.
Example 2 Archie: Well. I expect a fair increase. on this slip of paper. who admired the way Archie negotiated his starting salary. but we have internal budget considerations and we must consider equity with other employees. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. I think we have agreed to all aspects of the job offer. Archie: Thanks. I want the job. He also started the job with a positive working relationship with Vernon. Here it is. except salary. I came up with the best salary offer I can make. but I don’t want to start off in a new job by negotiating with my boss! So. (three days later) Vernon: Archie. and you know my current salary. Conclusion Archie accepted the job offer. as we agreed. I’ll discuss it with my wife and get back to you in 48 hours. We want you. I’ll get back to you in three days. no questions asked. I’ll either accept it or reject it. Okay? Vernon: That sounds good. 80 50 Practical Negotiation Tactics . and I’ll take 48 hours to consider it. I don’t like negotiating over salary either. how about you making your first salary offer your best one. So.
Kevin: Mom and Dad.” As you know. and in a favorable light.m. we’re not going to be dating exclusively after this summer. so he knew that he would have to sell them very quickly. He knew his parents would not agree to let him stay out all night. 17 years old and a junior in high school. we’re all meeting at Donna’s so we can share a limousine. I’m the only junior in the crowd. Posturing is indeed “acting. Sally’s Senior Prom is coming up. curfew would be okay. Exchanging Initial Offers 81 . and ignore or deny any weaknesses in it. look for indications from your opponent as to what he or she believes is their best position. you only have one Senior Prom in your life. since Sally is going away to college next year. Second. It might be your only opportunity to explain your position without interruption.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. Fourth. First we’re going to dinner. and then to breakfast at “Timothy’s.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion.m. Kevin had “negotiated” with his parents before. but he figured “all night” was relative. Third. so the prom is a pretty big deal to both of us. Present your position and demands as if yours is the only logical position. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. and we’ve made a lot of plans with our friends that I need to talk to you about.) During the posturing phase. a 4:00 a. This is called posturing—presenting your position strongly and completely. Example 1 Kevin. was dating a senior. then the prom. His girl friend’s Senior Prom was coming up and Kevin obviously wanted to stay out beyond his usual curfew time of 1:00 a. First. you will probably have to modify some of your positions if you are to reach agreement. (Once negotiations get underway. He and his date had decided that as long as they could join their friends for breakfast after the prom. you know that Sally is really looking forward to this.
m.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. for sure. and the crowd we hang with doesn’t either. the limousine will take us back to Donna’s house to spend the night. We’re just not convinced that your entire group has been alcohol. Finally. I don’t drink or do drugs. but because the owner’s daughter goes to Sally’s school. Fifth. Donna’s parents are not as strict as they could be when a bunch of you are there. You make some good points. we’ll have to get in our car and drive home very early in the morning. happy about your plans to use a limousine so you kids aren’t driving. we told you that we would not be changing our rules to accommodate that older group. I know you trust me and that I’ve earned the trust. remember that when you started dating Sally and hanging out with an older crowd. Second. you and Sally need to call it a night (or really a morning). this prom is a one-night thing—a dance that is dressier than you’re used to. 82 50 Practical Negotiation Tactics . That’s asking us to believe a lot. We think that after the breakfast. From where we sit. but to use that as a reason to stay overnight doesn’t make sense. I’ve never missed my curfew. so there will be plenty of chaperoning. of course. That’s the deal then? Okay. they will be open for the Prom crowd only. Sally’s parents trust us and have already said yes to her. Yes. You realize that this could be as late as 4:00 a. Donna’s parents will be there. 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. And if we don’t spend the night. I believe you can pay a little more and have the limousine bring you both home. Things can happen on a night like that that adversely affect you for the rest of your life.or drug-free. you have been fairly good about making your curfew—most of the time. We are. Also. but it should not be oversold. and we’re just not happy about that. We’ve heard that they allow kids to drink. we know. So. And. However. yes. I think I ought to be able to stay out all night. which could be dangerous.
Nevertheless. Tencro has approached the state’s Office for Business Incentives to see what. and a new. our Exchanging Initial Offers 83 . we’d be adding at least 500 new jobs. EDO: Well. The assembly plant is out-of-date. but it could easily add another 500 if it had the space on its assembly line. The company approached other states to see what incentives they might offer Tencro to locate in their state. Tencro is not going to leave the state. The spin-off business from our operations is huge. and it will grow—everything from sub-parts manufacturing to the shipping business we generate.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. we’re of course interested in keeping you here. Tencro: Let me just remind you of what our company means to this state. but was disappointed to learn that they offer very few incentives. We need to find out what you’re willing to do to keep us here. we are one of the largest employers in this county. and had this conversation: Tencro: We really want to keep our company here and expand it. With 800 employees. regardless of the incentives.m. but we’re getting a lot of interest from other states willing to help us relocate. Example 2 Tencro Company decided to modernize and expand its business. the state can do to help the company expand and rebuild. Also. It currently employs 800 people. one-floor operation would be very profitable. if anything. and it does not really need any help. but there are limited options available. Tencro approached the state’s Economic Development Officer. If we can expand here. because his parents could not disagree with such wellthought-out ideas. other companies have received incentives and Tencro certainly wants all it can get. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a.
We need a rebate on the local income taxes to help pay off the loan to build our new building. Just increasing the workforce by 500 will pull new people into the community and cause housing costs to rise—something our citizens on fixed incomes are very much against. We do want you to expand your plant. and we are willing to offer some training dollars for the new workers. if the new location is at the local industrial park. EDO: Well. Also. 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. and we’ve had to divert funds from business incentive programs over to basic services. while we value your company as a long-time corporate citizen. That might involve the state building housing for them at a reduced cost and providing them with some retraining. and traffic signals. or else it will not be cost-effective for us to stay here. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. so we’d have to have it free here. etc. And we’ve been offered land practically free in the neighboring state. There are more residents in the state demanding more public services: road improvements. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. EDO: The state has very limited resources to pay for economic development incentives.. additional police. Certainly. We can’t possibly give it away to other companies coming in behind them. And. paying taxes. We need certain incentives. We 84 50 Practical Negotiation Tactics . we will need the two-lane entrance expanded to four lanes. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. We need help in the cost of attracting and training the new 500 employees. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. schools.employees pump money into the economy by buying houses and cars. now that the economy has improved. etc.
borrowed money for the new building. Tencro: Well.agree that the road into the industrial park must be widened and a traffic light installed at our expense. However. Tencro was able to pay off the borrowed money in half the time. Tencro bought land in the industrial park. Future negotiations continued. Other than that. but for the fact that each party did its homework and was aware of the true facts. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. the training and the new road improvements were all the incentives offered to Tencro. we’re just not in a position to offer more than that at this time. Exchanging Initial Offers 85 . and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. and hired 500 new employees. EDO: Get back to us as soon as you can. The new set-up was so profitable. let us go back and take another look at our options.
think things through before you make or accept the first offer. That’s a fair price.” The perfect first offer.e. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure. Jay: No. offer $150. The sellers must be willing to come down a few thousand … Sue: Well. Jay: No. of course. 2) Start out with an old number. Avoid giving away too much at the outset.000 and $337.) To prevent this from happening. and you cannot withdraw it in good faith. but you feel cursed because you gave away too much. then $320. They found one they both like that lists for $325. The other party will probably come back with an equally ridiculous offer. 86 50 Practical Negotiation Tactics .000 three years ago). is the most (or least) the other side will accept. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. particularly if you don’t know the other party’s “settlement range. because you have settled quickly. thus requiring greater concessions on both sides. which can be very useful).. We don’t know how anxious they are to sell or if they know the market. before someone else does. 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.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.000.000 for a house that sold for $185. never give them their asking price.000.000.” (You have won a settlement. Their realtor told them that it sold for $290.000 two years ago.000 this year. such as last year’s price. at minimum cost. and houses in this area sell fast.000—what they paid for it. Let’s low-ball them and offer $290. or 3) Make an unrealistic offer (i. and that two similar ones on the same street sold for $330. Sue: Let’s offer $325.
and the offer was based on fact: the prior negotiated price.Sue: Don’t be crazy.000. as Sue had first suggested.000 for each of us—$6. I can’t tell our realtor $290. The buyers were very motivated to sell. That’s an insult! Jay: Well. was very impressed with their presentation. the sellers obviously would have accepted and Jay and Sue. 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. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. They outlined how they would develop a new employee performance-appraisal system. (Bob and Frank meet privately to discuss the situation. as requested by the human resource director.000 total. Exchanging Initial Offers 87 . they had offered $325. then let them make a counteroffer. (the next day …) Jay: They made us a counteroffer of $307.) Bob: I’d do it for $3. Lyle Foxworthy. since they had already bought another house. but who knows what they are planning on offering. the company president. If. Give us your lowest price. Frank: Me too. realizing they offered too much.000.500—half the difference! Sue: Great. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Sue: Then you do it. Both parties felt that they made a good deal.
Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. but we can’t pay more than $18. 88 50 Practical Negotiation Tactics .000) their minimum price of $6.) Lyle: Okay. We’ll do the job. Bob: That’s fair. I’m out of time. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. They also ended up getting three times ($18.000. We’ve waited long enough. and you two come highly recommended. What’s the cost? Bob: We want the job. but we know you must have an amount budgeted for this and we are willing to do it for that amount. Lyle: Okay. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer.000. That is all that’s left in this year’s training budget. and it would not apply.
It has often been said that the key to negotiations is to be flexible (see Tactic #25). and do not flatly reject it because it is not your offer. carefully evaluate an opponent’s offer. in fact. In some negotiation situations. Expect that the “total pie” will be different from what it was at the outset. 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. is likely to pull away from the table. be enlarged (see Tactic #27: Expanding the Pie). Instead. labor negotiators. T Making Counteroffers (The “Give and Take”) 89 . Also. seeing no common ground. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Experienced negotiators seldom reveal their exact priorities and objectives. 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. Skilled negotiators such as salespeople. One or more parts might be acceptable or indicate movement from their previous positions. because if you do not at least appear to be flexible. which is often the case. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. do not dismiss it because it is not all you want. which would most likely weaken their position (see Tactic #26: Keeping Secrets). the other party.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). but possibly of different values to your opponent. When the other party makes an offer. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). and attorneys use tried and true tactics in giving and receiving offers. what appears to be an outer limit of the settlement range when the process starts can.
His brother Sydney. Proposing multiple ways to reach your goal can get you to the same place. except when you’re negotiating. The week he would be home would be the first week of school for Sydney. He planned on being home for one last week before having to pack up and go back to college. and quicker. Option 1: No family vacation. Dad. Proposing only one solution to a problem. 90 50 Practical Negotiation Tactics . and I try to get to the South Carolina beach for a week in July? Sydney: I’m not going to the beach with my parents! I’ll just stay home. Sydney. 19. I don’t want to give up on a family vacation that quickly. In mid-June.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. Here’s the discussion that followed: Mom: Well. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. while it may be your best option. completed his first year of college and came home for the summer around the middle of May. Dad: Wait a minute. We have four options. 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. Option 2: Mom and I go before Jerry leaves on August 1. Jerry pointed out that he is expected to work until July 31st. 15. it looks like we can’t really plan a vacation for all four of us. gives your opponent little maneuvering room and might even prolong or damage the negotiations. Example 1 Jerry. finished his freshman year of high school at the beginning of June. so you can go without me. Jerry had already started his summer job. their parents began discussing a family summer vacation. what say you. Let’s see what we can work out. Jerry will be here. 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.
And I miss orientation and start school the next day? Dad: That’s an option. you have a half-day orientation on Wednesday. Classes don’t start until Friday. and Sydney go to South Carolina before his school starts. Jerry: My friends and I have plans through Saturday of that week. Sydney: Okay. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. By proposing numerous options. one paralegal. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals.Option 3: Mom. but it should work out all right. Then Jerry joins us until Thursday. 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. Sydney: Don’t I start school that week? I don’t want to miss school. but he can discharge employees for poor performance. if it’s okay with Jerry. actually. Mom: Well. we could return home on Thursday and still get a week’s vacation. Bob. and Carl). Conclusion The goal was to have a family vacation. If we started the vacation on a Thursday. Andrea considers Making Counteroffers (The “Give and Take”) 91 . It’s not perfect. so I won’t be able to meet up with you until Sunday. Joe has no say in who was hired by the corporate legal office to work in his unit. when we come home. we meet up with him that week for vacation. Jerry: Okay with me. me. and one secretary in his litigation unit. Mom? Mom: Let’s do it.
let me say that I’m handling the missed deadline on the pleading. she made a two glaring errors in judgment. 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. Andrea. I really see your options as follows: You can leave the corporation. Joe: Come on. Joe: That’s all well and good. 92 50 Practical Negotiation Tactics . however. but it doesn’t solve the problem—nor is it the only problem. You had no authority to agree to settle the Stites case without clearing it with me. you have a job-performance problem. Andrea: Well. The attorney for the other side has agreed to give me the additional time to file it. rather than to put it off on someone else or for some time in the future.herself to be a professional. or you can work out a “supervision” agreement with me so that I can better monitor your performance. isn’t it? But I don’t think just moving you really solves the problem. so Joe took a “hands off” approach. In the last month. It was just a comment. If you don’t like the way I do my job. It is to the corporation’s benefit to address that problem here and now. Andrea: Wait Joe. Her job performance was acceptable. Joe: That is certainly an option. Joe: Andrea. We have a formal procedure that you just don’t like to follow. and resents any attempt by Joe to supervise her work. you know that wasn’t an okay to settle. which forced Joe to take action. To put it as bluntly as I can. we have a very big problem. Before you start. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. Andrea: You didn’t list moving to another unit as an option. and I don’t see why we don’t have more independence. 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.
Believe it or not.Joe: That could be an option. improve her work performance. 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. Joe: That’s fine with me. Andrea: Well. I want to stay with the firm.) Making Counteroffers (The “Give and Take”) 93 . Andrea’s move and subsequent “approval” regime did. But in fairness to our mutual employer. and propose an acceptable alternative. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. in fact. I hope we can work it out. my goal is the same is yours: to create an environment where you can perform to your full potential. the needs of the corporation have to come first. If that option is okay with you. lets talk to Bill about the move. by Leigh Thompson. then it would save face for me if it comes with a move to another unit. (Adapted from The Mind and The Heart of the Negotiator. If you are convinced that I have to undertake an “approval” program. or I would advise your next supervisor to put you on a very formal approval program. rather than my staying here.
500. only those with polar-opposite interests that must be divided. 2) exchange items (those that can be easily traded off—one item for another item of equal value. Brooks: Right. Example 1 Brooks and Maureen Wilson have just finished building a new home. (She looks over the list. thus making it necessary to find a middle ground on each. etc. This approach is an important tactic. that’s $9. if a buyer negotiates a $500 reduction of a contractor’s bill. the fencing. Let’s agree to those things. because it can speed up negotiations and produce a more desirable outcome.) Yes. 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. one person’s gain is another’s loss—zero-sum. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. 94 50 Practical Negotiation Tactics . Wow! We are off to a good start. we both want the sod. Maureen: First. then those which can be easily traded. then the contractor has lost $500 in revenue. let’s see if there are any items we both want.). They both agreed that this is the maximum they will spend on “extras” before moving in.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. three strategies are used. 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). 3) distributive items (those items for which the two parties have exactly opposite interests. and finally. and a home theatre. It is used only when each side has several demands. Let’s see. They have a fixed amount of money—$14. For example. With distributive items. Exchange. In essence.000. These items often involve money). or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides.
000 $1.000 $3. which I’d like to keep in the bank.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. We have $1.200 $200–$2.# 1 Sod Item Cost $1.000 $5.500 left. and we both get things we want. Making Counteroffers (The “Give and Take”) 95 . I’ll trade your sidewalk and trees for my whirlpool bath. I’d like to spend some of it on lighting upgrades. $750 for lighting and $750 in the bank. that makes sense. which takes another $3.500 $2.500 $500 $1. These are all permanent immediate needs.000 $500 $1.500 $5. Can we split it evenly? Brooks: Okay.000! Brooks: Good.000 $2. Maureen: No.
Pension Increase 3. Drug-Testing Program 96 50 Practical Negotiation Tactics . All items to be negotiated and their desired outcome for each item were put in writing for review. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. even in difficult years. This year. finally agreeing to split the difference on the remaining amount (distributive items). 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). Profit-Sharing 5. management and union negotiators found that a “winwin” approach to negotiations worked well. both sides exchanged lists of initial demands at their first meeting.Conclusion By taking the time to list all the items each person wanted and their cost estimates. 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. The combined lists total thirteen different items: Desired Outcome No. Wage Increase 4. During that time.
Health Insurance Employees pay 20% Continue cur. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10).6.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. and (#9) to continue the often-discussed no strike/no lockout provision. Clothing Allowance Based on senior. 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 removed from the table. Overtime Assignment 8. signed. First. Next. Shift Differential 11. At this point. they began to trade off the exchange issues of similar value and nature. (#5) a new drug testing program. eleven of the thirteen original issues to be negotiated had been agreed to. Because they held opposite positions on these issues.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. No Strike/No Lockout 10.Distributive rent program co-pay Exchange Exchange 7. Next. one Making Counteroffers (The “Give and Take”) 97 . Finally. Job Security 13. Subcontracting 12. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). They proceeded to draft the language to settle these issues. Paid Funeral Leave 9. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8).
the most difficult issues (often involving price or some other economic measure) can be negotiated because you know that most items have been settled successfully and only a few remain. Conclusion This tactic is simple. Second. exchange. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle.side’s gain is the other’s loss. you can use the process to settle many of the other issues on the table. when you exchange items so that each party achieves their desired outcome on one of the two. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. or distributive so that the negotiations can begin in an organized manner. Third. when you agree on the items where both parties have similar desired outcomes. but a middle ground was eventually found on each and negotiations ended. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. The tactic offers several advantages: First. negotiations begin on a positive “win-win” note. They then identify each as compatible. 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. if both parties start from reasonable positions. 98 50 Practical Negotiation Tactics .
and studies late into the night. will make your opponent feel good about the process. last item: I’d like it quiet in the room at night. 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. they decided to establish “room rules” so that they would both be comfortable with the room assignment. so he wants a quiet room late at night. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Let me finish. Mutual respect must be part of the negotiation process. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. Here is how the last issue was handled: Okay. and can help you reach your goal. The final issue had to do with “lights out” and quiet times for studying. and from a strategic standpoint. Waiting a respectful amount of time to counter. Rob: Wait a minute. Jasper: Finish or not. This isn’t high school. even if you aren’t going to accept their offer. They agreed on which part of the room each would have. and refrigerator. so I can study. I’m not interested in a curfew.Tactic 24: Wait to Counter As the negotiations begin. It is especially important that you do two things: take your time before rejecting any offer from the other side. stereo. the location of the TV. Rob: Making Counteroffers (The “Give and Take”) 99 . do not offer a counterproposal right away. You can reject the offer and offer a counterproposal after it is obvious that you have taken the time to consider the merits of it. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. Since they didn’t know each other well. each side is expected to put an offer on the table. you know. Rob stays busy all day and evening with other activities. and looks like you are belittling them.
employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Rob: (there is no hesitation in this voice) No. and the union foreman would report directly to the plant manager. b) written complaint to a floor manager if the matter is not resolved in 5 days. Jasper: Midnight. The union contract required that management renegotiate this change in the grievance procedure with the union.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. but changed his mind when he saw Jasper’s attitude. The appeals procedure would have to be altered to reflect the restructuring.m. Under the restructuring. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days.m. Under ABC ‘s contract with the union. and d) a hearing with company owner if the matter is not resolved in 20 days. and that’s it. and that’s not negotiable. is all I’ll consider. the positions of non-union crew leader and floor manager would both be eliminated. curfew on TV and other noise every night. I want a 10:30 p. No agreement was reached. Jasper: (without taking a breath) At best. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. midnight during the week is the only thing I’ll consider. 10:30 p.) Listen.
any objection to the change. (Note: An attitude change sets in.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . In fact. no one can complain about that. and I’m certain your members will be okay with it. Company: (rather abruptly) Let’s not drag this out. the union arrived at the meeting prepared to support a streamlined process that called for the employee with a grievance to discuss it first with the union foreman. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. If the union foreman felt that the grievance had merit. After initial pleasantries were exchanged. The union was prepared to accept the plant manager’s position as final. Union: You obviously didn’t come here to negotiate. he/she can take the grievance to the plant owner for a hearing. 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. rather than as a judge on the merits of the grievance. and began the negotiation session concerning the grievance procedure. because those management layers are gone. Company: (no hesitating) Trust me. We’ve simply eliminated the first two steps. We’d like you to consider the plant manager’s role as a problem-solver. If in 20 days he/she has not been satisfied. An aggrieved employee can make a request for a meeting with the plant manager. the employee and the foreman would meet with the plant manager and attempt to resolve it. but to dictate. The redraft is simple and straightforward. Company: Here’s the new draft of the grievance procedure. We’ve got a couple of alternative models for you to consider. Union: Hold on. this redraft is a very simple change to the contract. Certainly. and everything else stays the same. rather than go on to appeal it to the company owner. our grievances often signal to management that there are real problems on the shop floor. ABC Company’s negotiator explained the management changes soon to be implemented. We just cut out two steps. Union: As you know.
Union: We’re very serious. rather than in the 35 days the current system provides. We’ll see you on the picket line. 102 50 Practical Negotiation Tactics . You can’t be 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. After a cooling off period. and we’ll strike if we have to. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. This time.two-step grievance procedure instead of a four-step procedure. and actually accepted a three-step procedure. the company entertained the ideas the union had tried to propose before. the two parties did meet again.
Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. and identified the range of options they feel comfortable with negotiating. Be open minded. two sisters. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. Bill’s family (parents. and do not dismiss something said by your opponent just because it came from the opponent. two brothers. Mom says you. Example 1 Sue and Bill have been married four years. 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). But after the negotiation gets started. Bill’s family won.m. and we’re really not able to enjoy either one. their spouses. Arriving late at Bill’s family gathering caused him to miss the “traditional” pre-dinner pro-football game on TV (which he had grown up believing was the real reason for thanks at Thanksgiving). Bill. Even before the baby’s arrival. Making Counteroffers (The “Give and Take”) 103 . you can adjust your demands or goals to include such new ideas. it’s just too much to do both. They’ve done the research. and at least five aunts and uncles) ate around 7:00 p. one sister. Next year. and ten nieces and nephews) always ate around 5:00 p. If you are flexible. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year.m. we’ll get to our side. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. Nancy: Sue. Sue’s family (parents. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. Sue’s sister Nancy called her to talk her into coming anyway. The couple used to have Thanksgiving dinner at both families’ homes. Sue: Yes. They flipped a coin to see who “got” them and the new baby this year. four brothers. established goals. and now have a new baby girl.
By being flexible. Celebrating the next day seems odd. I thought of asking Mom if she could move dinner up to noon or so. 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. 104 50 Practical Negotiation Tactics . Sue: I don’t know. Nancy: We’d make it special by all of us being together. she suggested a unique alternative. 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. When that goal looked out of reach. but she won’t tell you. Nancy: I’ll let you know. So that doesn’t work. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. There’s nothing “special” about Friday. it’s okay with me if you can sell it to everyone else. some people have to work on the Friday after Thanksgiving.Nancy: It just won’t be right without you guys. Thanksgiving is Thursday.m. Nancy: If we keep the time at 5:00 p. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. I bet everyone could make it on Friday. either. Bill won the coin toss for this year. and it became the family’s new tradition. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. the holiday will be over. I know that I would rather not do two Thanksgiving dinners on Thursday. we’ll come to Mom’s. Mom’s very upset. I mean.. Sue: Next year. but then I realized that the rest of you already go to your in-laws earlier in the day.
but we can’t fund all of the $12 or $15 million. Estimates for building a new orphan home ranged from $12–$15 million. City: Can’t you borrow the money from a bank to build the facility. 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 . City officals: We can probably give you the land for free. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. the foundation’s regular annual grants come to roughly half of their available funds. Each year. We only have maybe $2 million a year to put toward this charity. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. we’re committed in theory. Kids’ Home hoped to get $500. The foundation has a substantial endowment fund. Unfortunately (for Kids’ Home). the interest income of around $6. depending on the cost of the land. but we need some assurance that you will be able to build and operate the orphan home at that location.Example 2 Kids’ Home. Kids’ Home: That’s why we brought the foundation’s officials with us.000 a year for operations. They are meeting with the city to ask that the land be donated by the city for the project. We need the city’s help by allowing us to get the city land donated to us (for free). Foundation officals: Oh. a non-profit organization for orphaned children. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. but the principal of the fund can’t be touched. we hope to break ground early next year for the new orphan home. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget.5 million is available for distribution to numerous charities. Kids’ Home: As you know.
Kids’ Home: Borrowing the money gets very expensive. We’re not familiar with that program. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. but we’re willing to look at it. I’ll contact the state tomorrow. We wouldn’t want to make such a commitment to a bank. and really taxes our ability to raise funds. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. We’re a nonprofit group. it could end up costing double that amount. 106 50 Practical Negotiation Tactics . Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. If we borrowed $15 million at 10% interest. We probably would not be able to participate. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. We’ve never committed our funds to pay back a bank loan. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city.
At the same time. and often took up all the space along the street in front of the two houses. the neighbors began to have problems. The Jones family suspected that the Smiths called the police. you might not want to reveal all of your priorities at first. yet not reveal all of your goals and objectives. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. it is not acceptable to lie. It is perfectly acceptable to say that you are not ready to reveal certain things. Smith: We don’t know what you’re talking about. Before the Jones family moved into the neighborhood. and we would very much like to talk about how we can resolve these issues. Jones: We’ve obviously gotten off on the wrong foot. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. However. These parties could get rather loud. The Smiths called the police to complain about a late-night party. and trust can only be established if all parties interact truthfully. In order for a negotiation to be successful.m. Example 1 Soon after the Jones family moved in next door to the Smiths. each side has to know generally what each other wants to accomplish. Successful negotiations depend on trust. But the Jones clan had four cars altogether. and often lasted until 2:00 or 3:00 a. and asked the officers to cite the Jones kids for parking too close to a corner. Mr. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. Making Counteroffers (The “Give and Take”) 107 . Mr. They asked to meet with the Smiths to talk about these disagreements. the Smiths could count on parking their car directly in front of their house. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog.
fine. they kept it. And we’ll make sure none of our cars are parked in front of your house. Mr. we’re good now? Mr. Mr. since you’ve asked. a lot of problems. Jones: We’ve already talked to the girls about the parties. Smith: You know that your boys are causing our dog. Smith: Well. then they’ll need to come in at midnight so that their talking doesn’t disturb you. It is really very disturbing. we have a problem walking long distances in bad weather. Jones: I wish you had mentioned that the last time we talked. (A week later. At our age.) 108 50 Practical Negotiation Tactics . they’re hitting baseballs into our yard.Mr. Smith: Yes. Jones: Well. that wasn’t us. but we do know that someone has complained. Jones: Okay. and not in the back yard. we’d like to be able to park our car in front of our house. Almost every day. I guess. the next time the boys were out playing and the ball came into the Smiths’ yard. In spite of the Smiths’ assurances. we thought you might have called the police about our kids’ party and our cars. Muffin. Also. Smith: Well. yes. Mr. Is that everything now? Mr. Mr. So. the Jones were visited by a city inspector because of a complaint from the Smiths about the tree branches hanging over the fence and brushing against the garage roof. In good weather. and they won’t be having friends over more than one night a weekend from now on. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. if they are outside. I’ll talk to the boys and we’ll make sure they play baseball in the park. the late-night parties are a problem. And the music is to be off at midnight. we would like to work out some solution. Jones came to see what the problem was. and was met with the following: Mr. Smith: No. Mr.
Why didn’t you tell us? We can’t read what’s on your mind! Mr.Mr. Unless Neno can get the Union members back to work on Monday. but Neno cannot tell the union this. Jones: Sure. The Jones’ effort to sit down and negotiate the problems with the Smiths were thwarted by the Smiths’ reluctance to put all of their concerns on the table and their failure to admit that they were the ones who made the formal complaints. Example 2 Neno Enterprises is a shipping company with extensive global operations.S. or European companies do. Neno has been negotiating the sale of its business to a British company. or the deal is off. Its local headquarters has a union to handle its international shipping. The union laborers walked off the job on Friday. The union knows that the company is up for sale. the British firm will walk away from the deal. You obviously don’t want to be “good neighbors. Japanese companies often do not “recognize” labor unions the same way U. We would have fixed the tree if you had asked.S. Union officials are afraid that a Japanese company might purchase it. Mr. irate) I can’t believe you people called an inspector on us. the tree was clearly over the fence. Smith: Well. Jones: (at the Smiths’ door. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Neno’s president and the Union representative met to discuss the walkout. have labor unions. and the deal is close to being final. although none of the facilities outside the U. The British insist that a very strict confidentiality provision be part of the negotiating process.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. Making Counteroffers (The “Give and Take”) 109 . you’ve said that before. because they didn’t like a grievance decision. But we didn’t call the inspector. You could have seen that yourself.
But if your guys are out past Sunday. so the union won’t be hurt by the buyout. Have the guys back on Monday. And one company that is interested has a really good track record on expanding the businesses they buy. If they do come back. this is a legal strike under the contract. I’m certain that if we can sit down and talk next week. Our guys are prepared to stay out a lot longer than Monday. we will resolve it to your satisfaction by the end of the day. We’ve not had a labor shutdown in 20 years. I can’t really be more explicit than that at this time. Therefore. we don’t. Anyone who buys the company will have to honor the contract we have. and if the guys are back on Monday. But I have to have everyone back on Monday. We’ll meet with all of the parties on the grievance first thing Monday. You don’t want to mess up our negotiations. 110 50 Practical Negotiation Tactics . I think it already has. If everyone is back on Monday. Union: What aren’t you telling me? A labor shutdown. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. It’s not the time to have one. whether it’s for one weekend or a week. Neno: All I’m saying is that there is a difference. You really don’t want to do that. If that’s going to have a bad effect on your being able to sell the business. 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. I promise you. I know it’s not news to you that this business is up for sale. maybe by next Friday or the week after that we’ll have our guys back to work. Neno: Look. then there’s probably no harm done. Neno: Look. it will impact our marketability. We can’t put up with the kind of decision we got on our grievance. I need your guys to come back to work on Monday. no harm-no foul.Neno: You know this is a wildcat strike and that it is in violation of our contract. any interruption in our shipping could affect how these buyers look at our business. I’ll forget all about the strike. is still a labor shutdown. do you? Union: No.
Union: Okay. and it’s that important to you as well. But I need to tell my guys that this is important to them as well. the union was willing to trust Neno—even though he couldn’t tell them everything. But I can’t. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. rather than make up reasons. while the grievance was being resolved. Can you assure me of that? Neno: Yes. Making Counteroffers (The “Give and Take”) 111 . I would be more specific. I can. He told him that it would mean that the union would not only keep its jobs here. If I could. Because the parties had dealt honestly with each other in the past. Union: Okay. I’m going to go along with you because you’ve always dealt straight with me. was the right decision to make. Conclusion On Monday. the sale was finalized. Neno called the union negotiator in and briefed him on the sale.Union: It’s that important to you? Neno: Yes. as well. we’ll be back to work on Monday. but the British firm will allow them to organize at their foreign locations.
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
I can accept B.000 in the budget. but I will cut your travel budget out completely. that is enough time. Clean it after your game. Use the $5. or C. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . Take it or leave it. she chose the one she most preferred. or we lose a whole year. but the company president does not share your optimism on this program. I’m not going back to him again to discuss this program. B. I’ll do it now. keeping her Saturday free. (long pause) Felipe: Let me give you three options: A.000. Example 2 Roberto: I can’t properly advertise this new program with a $5. Felipe: Sorry. Roberto: But I need to start the direct mail and newspaper ads within two weeks.000 budget! I need at least $20. I can’t help.000 for advertising. Three.Amber: row before your basketball game. I have three hours. Roberto: Well. Conclusion At first. Amber resisted the chore she hated. Roberto: But it will never generate enough interest if no one knows about it. I’ll approve $15. I’ll approve $15. I’ll find a way to do without one part-time person.000). But when her mother laid out the schedule and gave her alternatives. but I will cut your staff by one part-time person (or $15.000 for advertising. but no TV or anything until it’s done! (pause) Okay. Felipe: Well. and clean it. Felipe: (Roberto’s supervisor) Sorry.
Conclusion Felipe was willing to think “outside the box. would enable him to adequately promote the program.” He offered Roberto three alternatives of equal cost. One alternative. which was his goal. thus achieving his goal of not having to ask for a larger budget. Roberto believed. Making Counteroffers (The “Give and Take”) 117 .
received a glowing report from her boss on her job performance. Example 1 Susan.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. Jones. After a few minutes of silence. 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. you are a valued employee. She was determined to hold her ground for at least a 13% pay increase and a promotion. I very much appreciated the fair job performance review you gave me. Susan: I hope so. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. but one side comes back with a non-negotiable demand. Susan: Mr. and 118 50 Practical Negotiation Tactics . Unfortunately. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. nearing her third year with the company. I have to tell you that while I appreciate what you have done for me. The negotiator for the other side says nothing. the promotion had not yet been approved. It was 16% less than she had been led to believe she would be getting. Here’s how the negotiations went. You know my commitment to this company. If his opponent cannot agree to the demand but does not want to end the negotiations. 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. he can make an open-ended statement. inviting a response. This should have resulted in an automatic promotion and a sizable pay increase. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. 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. Jones: I certainly do. I think you would agree with me that I have performed well above expectations this past year.
I really want you to stay with the company. I suppose I could get the promotion approved with the proper presentation. because I feel my future with the company might be at stake here. Susan’s silence prompted Mr. I must ask you to try to get both. 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. and sell it to management that way. maybe we can talk about the promotion later in the year. the company’s refusal to grant them now was a harder position to support. (says nothing) If I can’t get that pay increase approved right now.or three-year period. Conclusion Mr. If there is some flexibility in your request. if management can see their way to giving you the pay increase now. and I’m sure management will agree. Well. of course I will be glad to do that. Jones to continue to offer solutions. Once he acknowledged that both items might be awarded sometime in the future. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. I would very much appreciate it if you could ask the company to reconsider. and I think that I really haven’t been dealt with fairly. Making Counteroffers (The “Give and Take”) 119 . Okay? (says nothing) Let me check it out and I’ll get back to you. I could probably find a way to phase it in over a two. (says nothing) Or. it could help. but a pay increase of that size might be more difficult.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration.
and were trying to settle on new and expanded areas when one of the elected officials (Ms. Also. but now they’ve got to ask what Madame Mayor’s motivations are. Town Council Chair). The term of the original agreement was nearing its end. The parties agreed to continue the previous terms of the agreement. 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. The mayor. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. This is how the negotiations went: Town Council Representative: Well. Mayor’s representative: No. 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. her plans really don’t have any bearing on these negotiations. Mayor) said that she was considering running for office. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. by saying that she might run for Chair. He decided to push for a simple renewal of the original terms. The end of the agreement coincided with the election cycle for the two towns. She has not decided what she’s running for. I don’t think it’s a problem. has colored these negotiations. Town Council Representative: I think you’re wrong. My bosses might not have been inclined to expand the agreement anyway. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. and until she does. Mr.
I don’t know what her reaction will be. Conclusion By remaining silent. Making Counteroffers (The “Give and Take”) 121 . In the end. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. the Town Council’s representative left the mayor’s representative with no room to maneuver. the Town Council representative’s position prevailed. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. Mayor’s representative: Well.represents have to worry that her desire to switch governments might taint the negotiations. I hate not to attempt to add some additional areas to the agreement. and the agreement was renewed with no new provisions. He either had to end the session or figure out what to say to reengage the other side. I’ll go back and tell Madame Mayor your position. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items.
One day. had redirected the brook further into her property. She traced the brook back along its course to see why and where it had changed its path. As was sometimes the case in these parts.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. you should always enter the talks with a good idea of what you are willing to agree to. after the gazebo had been there for about five months. The reason I built it was so that I could protect my patio. or we will be at an impasse. Having an iron-clad demand probably won’t give you enough room to reach an agreement. 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. and began to renovate it as a home and a pottery shop. in a small clearing. 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. The brook 122 50 Practical Negotiation Tactics . she noticed that the brook came within 100 yards of it. Madeline: Hi. Madeline. Obviously. which an upstream neighbor had built. I have a problem. the brook and rock barrier are on my property. Neighbor: Well. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. The property came with three acres of forest alongside a meandering brook. She discovered that a rock barrier.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Joe. the brook was the property line separating her property from a neighboring farm. “I have to have this. Example 1 Madeline bought an old farmhouse outside of a small town. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. when one of you might say. Madeline built a gazebo about 500 yards from the brook. It calls for compromise. You will have to remove the rock barrier.
Making Counteroffers (The “Give and Take”) 123 . restore her property line. Neighbor: I can do both of these things. I couldn’t have that. what I need is to protect my property line and my gazebo. Madeline: But by diverting the brook. but you’ve changed the boundary line of my property. Neighbor: I’m sorry. I can’t have the brook in my house. She left room for a compromise. When she found out that this was not going to solve her neighbor’s problem. Madeline was able to protect her gazebo. My neighbor on the adjacent farm wants to sell part of his property for a housing development. By expanding the range of options available to resolve the dispute. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. I’ve lost 400 yards of property on my three acres. if the brook is redirected. This will put these houses right next to me.extended right up to my back door when the rain was heavy. What if you removed the barrier for a short time. and return everything as it was. and allow the neighbor to protect his home. you have not only threatened my gazebo. Then. Also. Madeline: Yes. I understand that. I won’t remove the rock barrier. Madeline: Well. at least I’ve maintained my property line. It might not be necessary to make such a dramatic change. she widened her range of options. 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. 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. but I don’t know what I can do about it. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. which enabled her to achieve her goals.
This would be a better benefit in the long run. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. 124 50 Practical Negotiation Tactics . the company can make your pensions much better. Pilots: Look. the airline paid a total of $200.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. Everyone was afraid that the dispute would cause an impasse and a possible strike. as it has always been. and the premiums for health care just keep going up.000. If we invest the $200.000.000 to cover the premiums for dependent coverage. The airline industry is in a slump.000.000.000. As best as we can tell. with all wage and operations issues resolved fairly early. then the pension benefits overall will increase by $10. The pilots want dependent coverage paid for by the company. And we cannot afford that $1.000 (which we reasonably should have expected to pay in premiums) in the pension account now. Over the last five years. But only a few of our people are close to retirement age. However. 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 a year over the next five years? Company: Yes.000.000. Over the next five years. that would be the minimum increase. This is just a cash-flow problem that your members have to understand. With long-term planning and investments. and we know that with this new contract term of five years.000 figure. what they really need is for you to cover the costs of dependent coverage. The company wants to trade paying for dependent coverage for better pension benefits. you are taking a risk on the costs increasing. Company: This could not come at a worst time for us. The projections for the next five years were that these costs would increase to about $1. and are willing to keep pension benefits the same. we know that health insurance premiums might skyrocket.
The $200. we are. or invest in the pension plan? Company: Yes. 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. and the pilots knew what to ask for when the contract expired. the company will not be expected to give us this benefit. Company: If the company spends the $200. however. by agreeing to let the company cap its exposure for dependent health coverage. can we agree to a year-to-year agreement on dependent coverage. The pilots expanded the range of options.Pilots: But you do have the $200.000.000 to either pay one year of the premiums.000? Once the cap is met. then those funds will not be available to invest in the pension plan. The health insurance market stabilized. that would be worth it. If we can get two or even three years out of the $200. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.000 available. so the decision to be flexible was a good one. if they were that high. with a cap of $200. It initially believed that the only option was to put that money into pension benefits.000 actually carried them through four years. Company: Then it’s okay with us.000 the first year on the premiums. Conclusion The company was committed to limiting its exposure to $200. Making Counteroffers (The “Give and Take”) 125 .
and compare it to your strategic objective. $45. what monthly payment did you have in mind? Buyer: More like $300 per month. I love this car. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. if I can give you this car with a $300 monthly payment. Buyer: Way too much! Saleswoman: Well. I recall the day you drove it out of here. do you want to look at something else? Buyer: No.000 for a Volvo? I bought the one I’m driving for $19. but that was several years ago.” and “low monthly rates” are examples of the salami tactic.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. Buyer: Yes. Example 1 Car buyer: What. Phrases such as “for only pennies a day.” “affordable weekly payments.500! Saleswoman: Yes. Saleswoman: I’ll be right back. be sure to add up the total cost. If you are on the receiving end of such a tactic.… (20 minutes later) Saleswoman: So.000 car. it’s a deal? 126 50 Practical Negotiation Tactics . I just can’t imagine the monthly payment on a $45.” 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. Saleswoman: With your 740 in trade. I guess it would be around $600 per month.
Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. (looks at the numbers) That looks good. I can’t afford that much. down payment. and payout slices to reach the total price she wanted.” she had him—she worked around the $300 slices.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. do you want HBO? How much? $5. Saleswoman: Simple. but what else must I buy? Only the basic service for $8. Sure. with your car and $6. Great! So.00 per month. But my neighbor pays $39. do you want Disney? Yes. Instead of a three-year lease.000 price into “slices” the buyer thought reasonable. it will be a five-year lease.00 per month for your service. You can do that. as promised.” She decided to cut the $45. but let me see the numbers. and added the trade-in. I can’t discuss another client’s account.00 per month.Buyer: I don’t see how you can do that. can’t you? Buyer: Yes. I can afford $6.000 down. Making Counteroffers (The “Give and Take”) 127 .99 per month. you can get the Disney channel for only $5. Once the buyer volunteered that $300 was an affordable “slice. Let’s see.
Disney is for the kids! The sports channels are for me. Yeah. 3. they asked about the Cartoon Network. 2? How much? $8.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. we had that before. But that’s all! Then we’ll hook you up on Monday. That’s $5. Any other kids’ channels? Yes. and SI 1. and my wife wants the old movies.99 per month. What about the music package? Yes.00 per month was far too much. instead of one total amount. Great.00 a month. I really want the sports channels. 128 50 Practical Negotiation Tactics .00. and probably felt much better about the total negotiated package because it was presented in modest individual slices. Okay.00 per month. The total is $38. 2. but he agreed to six “salami slices” for a total of $38.00! Why? Because he judged the per-slice price to be reasonable. That’s another $5. Conclusion The owner thought his neighbor’s service at $39. Thanks.
Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). It should be used with caution: It can end negotiations immediately. which can be successful if the opposing team has two or more members who hold different views of an issue. angry negotiations. the traditional car salesperson might tell the buyer. When both sides believe that each has equally strong positions. Humor might not look like pressure. For example. A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. pressure tactics should probably be avoided. but others will walk out the door. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution.m. but in tense. Tactic #33 (The Bluff) is a classic pressure tactic. and the use of humor. and it can destroy your credibility. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. however. it is effective. In some cases. today.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. “I can only guarantee this price until 6:00 p. but it can be used effectively when one party clearly has an edge. turned off by the tactic. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). so are you ready to make a deal? This might convince a few buyers. Applying Pressure 129 .
in fact. and we’ll be moving south in the next month or so. Lacey: Don. but it is not a good idea to exaggerate what you are offering or what you are giving up. together and separately. and we need to talk to you about how we can buy you guys out. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. Such exaggerations are easily revealed or uncovered. In the last couple of years. When Lacey found out that his employer was transferring him to another city farther down the coast. but Don. The two couples used the sailboat a lot the first couple of years. Although I do think there ought to be some consideration for the two years you had use of the boat. and they will weaken your credibility. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. We’d hate to give it up. he and Chloe wanted to buy out Don’s and Abby’s interest. Lacey: I know. Don: Absolutely. And we don’t want to be unfair. 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. Lacey and Chloe didn’t know that Don and Abby were. boat prices have really gone up. Lacey. Don and Abby now use it less and less. big news! I’ve been promoted. getting a divorce and each moving away (and would have no more use for the sailboat). Don: Wow.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. I think Chloe and I would be willing to pay more than just the money you guys put into it. Abby really loves that boat. I don’t know. Your opponent will consider you untrustworthy and might even be insulted by your attitude. It 130 50 Practical Negotiation Tactics . Chloe and I would like to take the sailboat with us.
Don. Abby told Chloe about the divorce and about how she never wants to see the boat again. Abby: Well. I’ve been thinking. (Around the same time. It’s about time now for some major investment. big news!! Don got his promotion. (After Lacey and Chloe had a chance to talk. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. which you would have to share if you want to retain half-ownership. Don: Lacey. Abby: That boat. Conclusion Don got a lot less than he could have from Lacey because he found out that Don exaggerated the importance of giving up the boat. and neither of us put much in for upkeep. I’ll be glad never to see it again. he likely would have found himself in a stronger negotiating position. but separately. After all. It just reminds me of how happy Don and I used to be.) Lacey: Don. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. We’ll be leaving here for the Midwest. Don and I are getting a divorce. though it’s not so happy. Lacey and Don’s negotiations changed considerably. and we’re moving farther south. I’m sorry. I have big news too. Chloe: Oh. and I’ll get back to you. I’m surprised by your attitude. Let me talk to her. the boat has depreciated. I was afraid something was going on when you all-butstopped joining us on the boat. I thought you understood how important this boat is to Abby. Applying Pressure 131 . Abby is having this conversation with Chloe) Chloe: Abby.is just about the most important thing we own. Lacey: Cut it out.
Here’s how these negotiations went: Company president: Well. I’m telling you the stock price is having a huge impact on us already.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. I read in the papers every day that the market is still strong. I think you’ll have to agree with me that wage increases in this next contract will not be available. And as you know. the situation in the stock market is not good. we will need to make drastic cuts in our operating costs just to survive. they will make their decision based on a review of the stock price that day. our production line changes at least three times a year. Company president: Well. Union negotiator: The stock price might be down right now. the company president decided to use the stock price as a negotiating tool during the current union contract talks. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. and that the economy is strong. I can’t see how today’s numbers really impact the long-term profitability of this company. but this has been such a crazy situation. And while these fluctuations have little to do with the health of the company itself. I’ll have to show them 132 50 Practical Negotiation Tactics . I’ll be looking to you to make some major wage concessions on this upcoming contract. I’ll be going back to them as soon as next week. in fact. 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. in this global market. The current stock price is the lowest it has ever been. I’m afraid that with this current information.
(In the interim. Give me your proposal for wage concessions. Union negotiator: Well. We think this company is very healthy and can withstand the temporary downturn. but your proposal to cut wages is just not going to fly. we’d like to reopen talks on next year’s pay increase. the union checked into the Letter of Credit transaction with some experts in banking. Union negotiator: I know that’s what you told me. When negotiations resumed. but I checked it out and it’s not totally true. and the union ended up with a substantial increase in their contract. no concessions! In fact. If you put it that way. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. Let’s get back together next week. here’s what happened.that we’ve cut expenses to counter the losses in the stock market. and I’ll have our people look at it. The union became hardened in its position that the employees needed wage increases in the new contract. let’s talk about it. okay. Company president: All right. When the market took a swing up during the negotiations. they would do a thorough analysis and look at the health of the company over the long haul. They told union officials that it would be very rare for a bank to make its decision solely on stock price.) Union negotiator: I’m sorry. Applying Pressure 133 . he lost the trust of the union. Conclusion Because the company’s president over-emphasized the impact of the market on the company. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. If the stock goes up next week. the company’s position was weakened even more. So.
Tom: Oh. Here’s how the discussion went: Christy: Tom. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. If you subsequently agree to begin talks again. and they really have no intentions of doing so. We don’t have that much free time together. and she didn’t think Tom had. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement.Tactic 33: Bluff! Bluff with caution. This can come back to haunt you. I guess I’m just surprised. are you? Christy: I don’t want to be. I really hate it that you chose to see the movie with Charlene. Both of them were still in graduate school and worked full-time. I knew you had a class. The couple had not discussed marriage. Sara said she saw you at the movies with Charlene yesterday. yeah. but Christy thought the relationship was heading in that direction. you will have lost credibility with your opponent. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. so their “free” time was very limited. it might backfire. She knew that if she made such a demand and threatened to leave him unless he made a commitment. Example 1 Christy and Tom had been dating for about a year. 134 50 Practical Negotiation Tactics . they are bluffing. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. You’re not upset about that. I called Charlene and she was available. Poker players know all-too-well-that bluffing can be very costly. and I really wanted to see the new Lenny Bruce movie. Charlene. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. either. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. but I really am.
It is. If that’s not possible. Christy: I just can’t see it that way. he had to make a commitment or risk losing her. Conclusion Tom didn’t want to lose Christy. if you can’t make that kind of commitment. He believed she was sincere. I certainly don’t want to lose you. Christy: What I’m saying is that I can’t accept that you are going out with a “friend” who is a woman—not at this stage of our relationship. The union negotiators. but very little progress had been made. I need to have your commitment that you won’t do that. then I’m afraid I want us to stop seeing each other. she paid her own way. I’m willing to risk losing you. and at first he thought she might bluffing. It really wasn’t a “date”—we just saw the same movie together. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. Since he wasn’t sure about that.Tom: She’s a friend who happens to be a girl. Tom: You’re serious? It’s that important to you? Christy: Yes. I just thought of her because I knew you weren’t available. Actually. Tom: Okay. It’s made me realize that I want us to have an exclusive relationship. She convinced Tom that her feelings were strong. I’m not “dating” anyone else. If Tom had “called” Christy’s bluff. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. Applying Pressure 135 . I won’t go out with any woman friend. so he didn’t call her bluff. Tom: I have friends of long standing who are women.
We need some agreement on this today. Second. We’re not going to reach agreement on this at all. This is a critical issue to us. Another bargaining session was scheduled. If we’re not able to reach agreement on this. Nexon: I’m just not prepared to give you one.believing that Nexon would not risk a strike. or else we’ll be asking the membership to strike. Union: You’re wrong. it will cost too much. This is something we just have to have. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. we want the part-time workers to apply for and fill fulltime positions as they become available.) 136 50 Practical Negotiation Tactics . (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. Nexon: I’m sorry. We need an answer today. First. but working without benefits is simply not acceptable. 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. Here is what happened at the next negotiations session: Nexon: I’m sorry. we’re really prepared to go the distance on this benefits issue. much less today. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. Union: You don’t seem to understand. 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. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. then all of our other demands will change. The union members ended up voting not to strike at this time. Why don’t we put this one aside for now. Nexon: We’ve got lots of issues to discuss.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
the guy was in no position to dicker over the price of the repair. The owners of professional sports Applying Pressure 141 . there were times when there was no pressure and no emergency. If the employer is a shipping and express mail company. he was able to successfully bargain for other services. his air-conditioning unit went out. Since his toilet had overflowed and water was continuing to run all over the floor. when one side has “leverage” over the other. and was forced to pay whatever they demanded. for example. Since the heating and air conditioning company held no leverage over him. such as the advantage of time. once had to call a plumber in for emergency repairs. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. not blessed with many household repair skills. It is sometimes referred to as “pressure bargaining. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. Unions can strike at any time to achieve their goals if they have some leverage. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. He was at the mercy of the company that could install an appropriate unit the fastest. because this is the busiest time for that industry. its union has the advantage in the weeks just before Christmas. On the other hand. while the other is not—that is. 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. The same kind of thing happened a couple of years before that: In the middle of August.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. Example 2 Let’s face it: Sometimes one party holds all the cards.
she has leverage and can more likely hold firm on her price. low employee motivation. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. If you have a special skill that an employer needs and few others have that skill. If so. and other undesired outcomes.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. When the employer proposed adding duties to the job classifications. benefits. will what goes around come around? 142 50 Practical Negotiation Tactics . What goes around comes around. unemployment is low and jobs are plentiful. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. however. Other employers find themselves in situations that actually reverse the leverage (when. then you are in a position where you can set reasonable demands on wages. (Team owners are notoriously unpredictable. despite strong resistance. for example. This gives it the upper hand in negotiating with employees. either individually or through collective bargaining. etc. The employees had no power to resist the demands of the employer. it is the union’s turn to hold firm on its demand). but they are less willing to negotiate several months ahead. When one side places undue pressure on the other side. A note of caution: Circumstances in one round of negotiations might give one side an advantage. consider whether or not the two parties will likely meet again in the future to negotiate. can suffer repercussions in the form of sabotage. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. he didn’t have to be flexible because the employees believed that they had no alternatives. On the other hand.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. there are likely to be long-term repercussions. the employer has the advantage: a supply of jobs. but before you choose such a tactic. if the unemployment rate is high and jobs are few.
and I can’t stand it. (Their dad pulls to the side of the road and turns to face them in the back seat. I can’t drive if you keep this up. and Susie hid them under the seat. This time. I took it out of the box. Just share the doll. but use this tactic judiciously. (In a few minutes.) Applying Pressure 143 . Why? A sudden surprise can disrupt the dynamics of a negotiation. You’re driving me nuts. Tell Susie to let me have it. the girls had been fussy. Just because you saw it first doesn’t make it yours. the little girls began to fight over the doll. Andrea had taken them off the doll. and here’s how the “negotiations” went: Dad: You two stop fighting. Almost from the beginning of the three-hour drive. Their dad tried to reason with them. The doll can be shared. Example 1 A father and his two daughters were on their way to visit the grandparents. About an hour into the drive.Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. you have it this part of the trip. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll.) Dad: Stop it right now. the argument is over the doll’s shoes. Andrea. Mom said so. and Susie. you have it when we drive home. We’ve got a long ride ahead of us. Consider making a suggestion or a proposal that completely surprises your opponent. Andrea: Okay. Andrea: The doll is mine. the fighting starts up again. because you will probably only get to use it once. Susie: Okay. Susie: The doll belongs to both of us.
Both Andrea and Susie were so shocked by their dad’s action. and reached back for the doll. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. in fact.Andrea: Give me the shoes back. he slowed down. The tactic was so successful. He grabbed it and threw it out the window. Susie: Daddy didn’t say anything about the shoes. I think I have acted properly. to no avail. The auditor asked to meet with the editor to explain his position. they didn’t say another word. Daddy said I got the doll on the way to Grandma’s house. The litigation itself had been going on for more than three years. and I hope I can convince you of that. He initiated the litigation against the local school board members and several banks that invested the money for the board. but nothing else up to that point was working.) Dad: Now there’s no more fighting over the doll. Dad tried correcting them a few more times. 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. Conclusion Dad’s use of a “surprise” tactic was extreme. 144 50 Practical Negotiation Tactics . Dolly has to have her shoes. The local newspaper was prepared to urge the auditor to end the litigation. I want the shoes. charging that they breached their duty in their handling these funds. at great expense to the auditor’s office and the school board. Finally. so it was worth the risk. The defendants contended that the auditor’s actions were politically motivated. She can have them later. and that they had invested and spent the tax dollars wisely. (They continued to argue and whine and pinch each other. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. Dolly doesn’t need shoes on in the car.
I guess we’re finished here. Obviously. Applying Pressure 145 . Editor: Well. Thank you for coming in. That’s really the reason this has gone on so long. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. Here are the papers. the bank would not have done that had we not proven our case. but actually superior to some other entities you supervise. as a matter of fact. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. Auditor: I appreciate their arguments. but I have to warn you that from what I’ve seen and heard so far. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. We believe the other defendants will soon follow suit. Your reporters will probably want to follow up on it. This morning. and it is costing your office money and good will. Editor: Well. rather than drop the case. but recommended that the parties reach a settlement.Editor: I’m certainly willing to listen. one of the banks settled with my office. I really think the community would be better off. Auditor: Well. there’s just nothing to back up your allegations. I think I have something here that will convince you otherwise. and a significant amount of money will go toward the tax fund. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. Conclusion The editor wrote an editorial urging a resolution for the good of the community. this case needs to be dropped. From what I can see. perhaps you should just cut your losses—and just drop the suit. They are very persuasive that this is just a political battle. They’ve been making that same argument from the beginning.
Tina and their son Kevin are against the idea. they’ll be mobile! The last thing I want is for them to be out cruising around. especially Kevin. Dad. night after night. Mike knows he needs to get either his wife or his son on his side. and a car is more important to him than a pool table. 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. Kevin: So am I.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. I’d 146 50 Practical Negotiation Tactics . Kevin: I don’t really care about a pool table. If the other side involves more than one person. but I think it will get a lot of use. Kevin is against it because he is turning 16 years-old soon. you might be able to dilute their power by identifying their different interests and addressing them separately. I can remember spending hours playing with my friends and family when I was growing up. I know we’ll all enjoy it. Tina: I’m really against this pool table idea. I want to talk about a car! Mike: It’s really not one or the other. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. although getting your license and getting a pool table are connected. Mike: I know.
I thought we were making real progress. and Kevin and his friends use it often. the head of the union negotiating team. Once Mike convinced Tina of the idea’s merits. the chief negotiator for the company. They bought the pool table. Mike: I really do. 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. only Kevin did. Conclusion Mike found an argument that divided Tina and Kevin. she joined his side of the debate. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. A pool table could attract them here. Kevin. Here’s how the negotiations went. And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. Tom. But I’m not going to hang out here all the time. I’m surprised. She noticed that Jim (another member of the union’s negotiating team. then maybe it’s not such a bad idea. What happened? Applying Pressure 147 . has just presented the company’s initial wage offer. some. don’t you think you guys would use it? Kevin: I guess so.like them to hang out here more. A number of contract changes have already been worked out and Wylma. Instead of both opposing the idea. received it without comment. Wylma: Tom. Tina: Well.
these are accurate. Tom: We don’t think so. Wylma: Jim. Let’s start again tomorrow morning.) Wylma: Now Tom. 148 50 Practical Negotiation Tactics . Tom had reduced his wage demand significantly. you certainly are aware of our financial situation. forcing them to reconsider their demand. as Jim can point out to you. Do you think this is reasonable? Jim: (looking uncomfortable) Well.Tom: Wylma: Nothing happened. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. these are our actual accounting figures. When the negotiations began again. Jim? Jim: Yes. Your demand is totally unreasonable. But Tom. you’ve seen our sales projections and production costs. Wylma: Tom. Right. Wylma: Let’s take a break. (When they resumed. Wylma distributed copies of financial data that showed the company’s current condition. I think you need to rethink your demand. you’ve heard our demand. but he added some workplace changes that Wylma was comfortable negotiating. This is just what we think is fair.
Humor often works to break the tension of the room. the oldest and youngest Jones children. Example 1 The four Jones kids grew up.Tactic 38: Break the Tension Tension is inevitable in most negotiations. 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. Tempers flare and people say things they shouldn’t out of anger or frustration. and had children. so you can find a way to quickly neutralize it. but it is really important to me. Applying Pressure 149 . some of the siblings decided they liked giving presents to one another. especially between Madison and Cory. You are almost 40 years old. We can’t afford to buy each other things we really need. but it should never be at anybody’s personal expense. Stay alert and watch for clues that a negotiation is about to get out of hand. Ever since Mom and Dad died. it was easy to agree on just giving presents to the children. but as the children grew up and had families of their own. married. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. I don’t feel Christmas in the way I used to. Sometimes the argument got heated. I want to say something. get over it. Madison: Okay. so pressure grew to draw names and exchange gifts. Cory: Madison. but the thought that matters. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. so what’s the point? I don’t need another tie! Madison: It’s not the gift. and it makes me very sad. That will just make a bad situation worse. When all of their children were small.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.
One day. I want to play “Prince and Princess. Example 1 Julie and Dara both attend a local preschool. however. who was outside with older children. If I can be the Princess. how about going out to the yard for a while? You can swing or play ball. I want to play “Princess” and I want Dara to be the “Prince.” Can I color now? You said we would color later. don’t you want to play? We could color before your mom comes. Both of the little girls liked to play ball when they were outside. C. they would have to play ball with older children. If there is resistance to compromise. Mr. 154 50 Practical Negotiation Tactics . was ready to color. the exchange will be between things of equal value. and that doesn’t happen without compromise. not the Prince. the individual might be afraid that the exchange isn’t equitable). Isn’t it “later” yet? Right now would be a good time to go outside. Dara. Julie wanted to play “dress-up. When that point is reached. Okay. The day-care worker wanted to take them outside for a while so that he could visit with his friend.: Julie: Dara: Mr. C. but since the other children in their room were not there. Then we can color. each side must decide whether or not one more compromise will produce an agreement that they will later regret. At some point.” but she needed Dara to play with her. or maybe tomorrow.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with.: Julie: Dara: Julie: Girls. it is better not to compromise. (In a successful negotiation.” Dara. 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. they were the last children left in the playroom for the remaining two hours of the day.
” No. C. They did all the compromising they were willing to do. or apply for a variance. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. you can come back in and play “Prince and Princess. Conclusion The children stayed inside and played dress-up. C. According to the city’s zoning laws. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. The existing parking lot didn’t meet the current parking standards for that size theater. the parking lot will start to look trashy. failed to offer the children something that was as important as the plans they had made. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. wouldn’t you like to go outside first? After you swing for a while or play ball. We want to play dress-up and then color. 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. 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. Mr. The owner and a small group of neighbors met to talk about these problems. the owner had to supply additional parking. The owner decided to try for a variance. and they still had time to color. When his variance application was made public. and teenagers attracted by Making Progress 155 .: Julie: Hey.Mr. however. We don’t want to go outside. neighbors became concerned about the changes to the mall.
not having direct access to the south lot from the street would be unworkable. if I agree to move the theater entrance to the south side. but it’s not ever full. What if I changed the entrance to the middle of the lot? That way. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. I could put a privacy fence along the east and west—at the backs of your yards. Right now. and break in his door. Right now. the north lot is used more. Many of our homes back up to that lot. the south parking lot has not been used much. driveways on the south side of the mall are along the east and west side of the parking lot. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. only when that lot is full would cars come around the mall and park on the south side. 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. In fact. lights in and out at night can be very annoying. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. And. We hope you’re right. We’d really like to block off that cut-through and have the theater face the south. I’m afraid. the closest parking to it is along Elm Street. We’re just not convinced. as you said. So. Not having in and out traffic to the south of the mall is just not very practical. We’d like you to prohibit cars from entering or leaving from the south lot. with your plans to put the entrance of the theater on the east side of the mall. The neighbors: Owner: 156 50 Practical Negotiation Tactics . All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. and we’d like to keep it that way. You could have all of the traffic enter from the north lot. even though I’m not adding any parking.
The compromises were what everybody could live with. then will you agree not to push for increased private security? Yes.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. If the fence was set back the width of a driveway onto your property. And a year after the theater opened. and they discouraged patrons from parking on neighborhood streets. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. the neighbors reported that they were very happy with the way it all worked out. set back a driveway width. Now you’re talking about considerable expense. Teens can form into gangs if left unwatched. there could still be access from the street to our garages—just not to the main parking area. put a privacy fence along both the east and west sides of the south lot. and make sure the parking lot is kept clean. But you’re going to have to have some kind of security as well. If I agree to move the theater entrance to the south. Making Progress 157 . Agreed. The fences created a buffer from the lights and noise. however. add a new entrance into the south lot. Conclusion Both sides had to give up something on certain items in order to reach agreement.
because you are the one to set the tone for agreement. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Lonely’s only companionship. If your opponent is aggressive or angry. Joan: Hi. She learned that everyone in the neighborhood had complained at least once. so her neighbor’s barking dog came as an unpleasant surprise. Lonely. and what kind of complaints might have already been made. thinking that you will be just as easy to work with on the sticky issues. Joan was already pretty tired. but going out of your way to be friendly is an especially helpful tactic. professional. Take advantage of any confusion about your friendliness to try to get them to agree to some of the easier things you have to work out. I’m Joan. Joan had a new baby. just forget it. they had gotten nowhere. 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 pleasant always enhances one’s ability to reach an agreement.m. Lonely: If you’re here to complain about my Rocky. respectful. Close your windows at night and don’t listen. The dog was Mrs. and I just moved in next door.Tactic 40: Be Friendly Being polite.m. Mrs. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a.. Present your position forcefully. and started to get upset. but be friendly. and that as angry as they were. and didn’t stop until 6:00 a. she just didn’t think it was a serious problem. Mrs. Example 1 Joan was new to the neighborhood.m. This gives you an advantage. 158 50 Practical Negotiation Tactics . incident was usual or unusual. and because she was hard of hearing. Joan decided to at least try and talk to the neighbor. They might even start to underestimate your negotiating skills. Your opponent might give in readily. She didn’t believe her neighbors ought to complain about the barking.
Why. I need to get the baby home. Here’s my little angel. The barking at night has been mentioned to me. is a really sweet dog. Lonely: Joan: Mrs.) Hi. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. then. I’ve only got my Social Security. Maybe I could come back tomorrow and bring him? Oh. Lonely: Joan: Mrs. Lonely again. by the way. not at all. I guess so. Making Progress 159 . I guess that would be okay. Well. but she took her baby and went to visit Mrs. don’t worry about that. too. How long have you had him? Almost eight years now. it’s probably because they just haven’t had the time to get to know him. I sure hope he starts sleeping through the night soon. I just wanted to come by and introduce myself. He’s been keeping me up at night. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. (Joan’s sleep was disturbed by another night of barking. He’s a real comfort to me. No. I’d like to introduce you to my new baby.Joan: Mrs. Do you think his age has contributed to some of that? You know. no. Lonely: Joan: Mrs. I might have to talk to you about Rocky. I know that some of these people around here don’t like him. Lonely: Joan: Mrs. Mikey. Who. Well. I can’t pay for something like that. I’ll see you. I’ve got a friend who is a veterinarian. I stopped by and visited with him over the fence this morning. isn’t he cute! He’s a handful. Lonely: Joan: No. sure. When he does. though.
A. 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.S. Lonely didn’t have to pay for the medicine she could not afford. its 150 management and sales employees could continue to work in Happy City. Company ZZZ: (surprised) Well. 160 50 Practical Negotiation Tactics . Lonely and Rocky. Joan took up contributions from the neighbors. Lonely’s needs and arrive at a workable solution to the problem. It’s very difficult to make a move of this type without having it leak out. U. you would have. recognizing that the layoffs would be an issue in upcoming local elections. Hearing about this from the press obviously puts you in a very embarrassing situation. of course. Mayor: (very friendly) I understand how these things happen. the mayor called and asked for a meeting with Company ZZZ officials. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. After Joan’s veterinarian friend visited with Mrs.. They anticipated that it would be an unpleasant meeting. I think that if you could have let me know ahead of time. Company ZZZ. and Mrs. Here’s how the meeting went: Company ZZZ: We’re very sorry. When he heard the news on the radio. The barking all but stopped. agreed to meet with the mayor. he prescribed medicine that gave Rocky a more regular sleep schedule. that’s very understanding of you. Under its new corporate structure. overseeing a factory in Mexico and selling products in the states. that the press got hold of the story of our company’s activities before we could call you to let you know.Conclusion Joan’s friendly approach enabled her to understand Mrs.
The buyer is a “disadvantaged business” we have been working with for some time. Mayor: Please let me know as soon as you can. the 150 management/sales jobs did end up moving to Mexico. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. You’ve been very understanding about this.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. because I’d hate for us not to make an appropriate pitch to them. the city has a potential buyer for your plant building. Mayor: Great! Let me know when we can talk again. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. Unfortunately. We recognize that your new corporate owner is a large company located in Malaysia. By the way. Would you be in a position to talk to me about such a deal. We just haven’t heard anything yet. Making Progress 161 . Many laid-off employees did indeed find new jobs at the plant. and the mayor was reelected. so we need to understand how we can affect their decision on keeping an office here. This strategy worked. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. or would we need to involve the Malaysia group? Company ZZZ: Certainly. They need a really good deal on the plant price. I think I can prevail upon the Malaysia group to let us handle the disposal of the property in such a way as to repair some of the damage our layoffs have created. and I want them to know that. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. Company ZZZ: I’m not sure what to tell you on that.
Susan denied it. Example 1 Susan. this time in front of a hidden recorder. 162 50 Practical Negotiation Tactics . She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Susan repeated her demand. Somehow. but Susan had only $20. or used to pressure the other side to agree to certain demands. Fred Adams. Michael Wood. who was disappointed to hear that she might propose such a deal. thus becoming a source of embarrassment. Alexis agreed. are talking about a possible settlement of the issue. Jones’s supervisor. Then he played the tape. She borrowed a tape recorder so she could ask her father if this was a fair deal. and Jones. age 15. The effect on the other party might be even more substantial if lies.00. the younger sister. and Alexis. the accused. until Susan said they would evenly split what they bought. or simply “bad faith” methods have been used by the other party.00 to spend. the investigator. South Carolina. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. were on vacation with their parents in Myrtle Beach. Conclusion For the first time in her life. Susan understood the impact a tape recording can have when it reveals a lie. Alexis. He asked his elder daughter about the arrangement. age 14. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Alexis knew this was not fair. threats. They might worry that the tapes will be made public or given to others. Alexis then played the tape for her father. The two sisters had saved up a little money so that they could buy souvenirs.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. had $40.
I think I can write my recommendation. And you did not threaten her job if she did not. stares. Mr. and now I’ll ask you to repeat your answers—on tape. Ruiz and Ms. he also lost his negotiating position. Stuart. When Adams set the tape recorder on the table and revealed that he had witnesses. Starr. Jones suddenly realized that his strategy would not work. Well. you are aware that the next step in this process is to ask witnesses to come forth. Your request. You never touched any part of her body? Not even accidentally? No. He failed to think about what might be the next step. I’ve brought a tape recorder with me. Conclusion Jones had knowingly lied when he denied the charges. (a long pause) I want to see my lawyer. and gestures did not have a single hint of sexual implication or innuendo? None at all.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. So you refuse to repeat the answers you just gave us? Yes. And please describe your general manner.” meaning something other than copies? No. Mr. I simply asked her to make copies for me as quickly as possible. No one could have possibly misunderstood your intentions? No reasonable person. Jones. Appleton both claim they saw the incident and will testify. Making Progress 163 . to quote you. exactly what you said to Ms. But by refusing to repeat his answers. So. “Do what I want.
the classic “split and choose” tactic might be the best way to settle the issue.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. one person is given the task of dividing the object(s) into two 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. which certainly is large enough (he naively thought) for two young children to easily share. Realizing the potential of getting the “smaller half. The second person then chooses which of the two parts they will receive. Maria and Roberto: No. Their dad instructed them to share the candy bar. of course. Many of us learned this one from our parents: After two people agree to the strategy. Roberto will get to choose which half he wants. is usually careful about dividing the object into two equal parts.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. because you did the cutting. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . with the remaining part going to the person who did the dividing.” the divider. take this knife and slice the Snickers into two halves. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. Maria. Oh.
Example 2 Two friends and business partners. I don’t really care which lakefront lots I keep. Clarence and Archie. Clarence: Right. Making Progress 165 . according to county deed restrictions. Deal? Clarence: Sure. Then I will choose which parcel I want.000. 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. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. so we should be able to divide the property fairly. Archie: That’s true. even children. They have a recent appraisal that values the property at $150. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. There is only one place for an access road that must serve all lots. The problem is that one of us will get four lakefront lots and the other will only get three lots. That makes them more desirable. Give me the map and a pencil. Lots must be at least one acre to be developed. and wants to divide it into two separate parcels. Archie is ready to build a retirement home on the property. that sounds fair. They all have a great view and are equally desirable to build on. but is not sure how to arrive at a fair split. Archie: Here is the map. both parties. jointly purchased fourteen acres of lakefront property several years ago.Conclusion When two people desire the same object and it is something that can be divided in some way. Archie: I really don’t care either. Clarence agrees to divide it. quickly recognize the fairness of the divideand-choose method. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others.
Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. Which would you have chosen? 166 50 Practical Negotiation Tactics . and both men were happy with the arrangement. and the second parcel with four lakefront lots and one other lot. Archie chose the parcel with the three lakefront lots.
What started out as a single issue is now a combination of a major issue and a much smaller issue. Brenda did her part when she said. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way. Jason was having a hard time getting the salesman to lower the price. However. Conclusion The amount the couple spent was fairly large. miles from their home. 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. delivery was limited to a small geographical area. With a great deal of effort. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . etc. he also set up all of the furniture in a second-floor bedroom.” Many people have witnessed or used this effective negotiating tactic. is expected to dicker over the price. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. “Okay.” thus extending the scope of the negotiations. attach legs. and the delivery carrier doesn’t set up mirrors. so the salesperson delivered the suite himself. supposedly the bargainer in the household. Her husband Jason. His tactic was to throw in a “nickel” in order to make lots of “dollars. we’ll take the suite if you’ll throw in free delivery and set up the furniture.” Under store policy.
important item. At the end of negotiations.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. 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.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. 168 50 Practical Negotiation Tactics . If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. This experienced bargainer said. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. In one case. we’ll agree to Health Plan A with another ½ cent on the pension fund. it can be a dealbreaker. “Okay. so be prepared to withdraw the nickel and dime item at the hint of trouble.
” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Donna: No way! These are the last two pieces of furniture. Donna: I’ll take the bar with stools. Donna: Okay. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. 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. but they are two pieces of furniture. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. You can go first. or knowledgeable. I’ll take the color TV. Donna: They match. People tend to make an effort to put their best foot forward. and performance evaluations for people to come across as likeable. Kathy: I suggest we take turns choosing which of these things we want. decision-making meetings. thus creating the impression in others that the good qualities they see are present all the time.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. trustworthy. and all the rest is small junk. This creates what is called a “halo effect. Kathy: Then I’ll take the couch and love seat.
Good idea. what can we do? Give me the couch and love seat! No. The union negotiators. Let’s call Johnny Ryan. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. and ask him if the couch and chair should be one item or two. with a record of labor involvement that included three recent strikes. He’s our cousin. 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. (Pause) We’ve got to settle this today and get this stuff moved. Example 2 During a heated labor negotiation. and he has always struck me as an honest person. 170 50 Practical Negotiation Tactics .Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. Johnny had the “halo” of an honest person. and if the bar and stools should be one item or two. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. He might or might not have also been a good arbitrator. I want the stools. I trust his judgment. What for? Tell him the situation. I want the love seat.
the former union president. Two weeks later. when negotiations again stalled on a retirement plan issue. the city management again hired Boston. but the power of the so-called halo effect was great. During the break.simply did not trust the management team. Boston was widely known as a totally honest man who speaks his mind. This time. thus bringing the negotiations to a conclusion. Boston went to the negotiation table with the management team. The teams took a weekend break from the stalled negotiations. They might have stretched his halo farther than his expertise and experience warranted. On Monday. 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 consultant did not speak. He said he believed that it would work as presented by management. The union accepted the proposal. as a consultant to review their proposal. He solemnly told the union negotiators that he had been hired to review it. the management team hired Sam Boston. but his mere presence caused the union leaders to accept a management point as valid. Making Progress 171 . without any reservations. and that he did.
$237.000 under the listing price! We realize that. They believe it is overpriced. Sam Jones. but you’ve priced it way too high. but the right facts presented at the right time can chill or astound and completely turn things around.000. (Next day) We’ve reviewed the records you’ve produced. They sold for: $225. $235. We love your house. The owner. Here’s a list of the five that are about the same size as yours.000. and $237. but the key is to gather facts that you might need—not just the facts that you will need. 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. $229. What? That’s $35.500.000. This offer is for more money than any four-bedroom houses on this neighborhood list. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Sometimes. has owned the house for 24 years and is downsizing to a condo. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. 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. and we are countering with an offer of $250. I’ll get back to you.000.000.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000. but we feel that it’s a fair offer.
We accept. The last 20 were over $2. Here it is. You can’t pay more than $1. and wisely chose exactly when to present them in order to make his point. Supervisor: If I okay this purchase order. We’ve talked with purchasing and we have the authority to buy seven for $2. Well… We have a written counter of $245.600 for a computer. Conclusion The Joneses had based their asking price on the advice of a friend. Conclusion Hatfield had anticipated what his supervisor’s position would be. if other departments have ignored the policy.000. I’ll get called on the carpet.000 each. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price.400 each. No one can go over $1. He found facts that supported his position. Order the new computers.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. and did his homework. let’s not worry about it. who was not particularly knoledgeable about real estate. Hatfield: While I was at purchasing. Making Progress 173 . Supervisor: Well. That’s the bottom price. I asked for a list of all new PCs bought this year. Hatfield: My staff has done a lot of research. and we know that only this model will meet our needs. I’ll be… Okay.600 unless the company president approves. Example 2 Supervisor: You know the policy.
Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. I want two of these. Example 1 Maureen: What. Maureen: Well. yes. some people would have forty or fifty books out at the same time. I’m sure you would not. Would I do that? Jenny: Maureen. can you check out two on a card for him? Jenny: Well. Otherwise. reveal misperceptions or lack of knowledge about positions that can be corrected. and they would all be unavailable to others. I can do that within the rules. Maureen: So you trust me with the books. They can help you identify or better understand what the other side really wants. I trust you. and two are for my husband. I can’t check out these four books? Jenny (Librarian): That’s the policy. Maureen. but I don’t set the policy and I can’t make exceptions. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. Maureen: Well. But I can’t break the limit rule—it is an absolute rule here. A maximum of three books can be checked out to a person at any one time. 174 50 Practical Negotiation Tactics . Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. but you don’t want to jeopardize your job? Jenny: Yes. The effective use of probing questions can help achieve a favorable settlement. If you trust me. you know me.
and Kenzie. it could kill us. Why? Some policy? Yes. (Next day) Do you have the policy about giving out product sales information? No. Can you get me the number? Sure. Brooks. What’s the policy number or date of approval? I don’t know. Who does have access clearance? Mike. Security? Right. Making Progress 175 . we can’t do that.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. They say it’s a security issue. Mary. Mary and Kenzie? They are 2-3 pay grades below us. are you sure I can’t get your information technology people to give us direct information on product sales? No. and they don’t even have a use for the sales data. I couldn’t find anyone who knew it. but it’s because you don’t have access clearance. Sue. Jay. If that data ended up in the wrong hands. Babu. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. But this forces us to make decisions without complete information! Yes.
that’s been the policy since I’ve been here.P. Once he discovered that employees in lower pay grades had access clearance. Jack: Here. When can I get the data? Mark: Today. I’ll get it for you ASAP.Mark: Well. 176 50 Practical Negotiation Tactics . if we can have access? Mark: I guess so. Jack was able to receive clearance as well.” He intended to do this until he hit a dead-end or was able to find a solution to his problem.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. Jack: Can you ask your V. His probing questions turned up a critical fact. I’ll sign now.
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. If friends or neighbors need to settle something but prefer to avoid the negotiation process. days. this tactic can produce an agreement. They bring it out when a dispute arises. When two parties believe they have an oral agreement. and the child learns an important lesson about life. In this process.Stage 7: Reaching Agreement he final stage! It might come minutes. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. 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. hours. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. 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. this process can easily result in a final settlement. and the classic Walk Away (Tactic #48). Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. When multiple issues are at stake and most have been agreed upon during negotiations. 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). T Reaching Agreement 177 . or even months after the first offer is presented.
one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics .…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. They both have stressful jobs and look forward to their annual vacation together. 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. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. Let’s do go to Virginia Beach and Washington D.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. Larry Snyder gets bored staying in any one place for many days. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. 2) allows the other side to feel the release that comes with completing the bargain. 3) and adds one last key demand to the congratulation sentence. Nancy brought up the subject of vacation again after dinner. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. His wife had carefully planned her exact “premature” vacation agreement. After days and weeks of on-again.C. off-again discussions. “I’m thinking of agreeing to your plans for vacation. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. but his wife Nancy likes to stay put and relax.” Conclusion The husband was so excited about visiting Washington. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. As he hugged her. Example 2 Negotiations can take a long time and incorporate many issues.C. She said. D.
(This is a bad position to be in. The celebration had begun. we made some small concessions on financial matters. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. “…as long as you give us a 45-day probation period. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. but acceptable. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with.) Here’s what happened: Bob: I knew that the other side was similarly harried. Therefore. he turned on a large warm smile and extended his hand to shake. Reaching Agreement 179 . There were grins and handshakes coming from the other side. One operating issue involved the probation period for new employees. My team was afraid we would not even come to an agreement. In our last offer. My team had convinced me that doubling the time frame would create a real problem on the shop floor. and rested. One of the best pieces of negotiation advice is to remain fresh. but we agree to everything in your final proposal…” Members of my team shouted hooray. but the other side continued to ask for 60 days. but held firm on remaining operating principles. It was so close. We all knew that it could come down to agreement or strike. When the chief negotiator emerged with his team and headed toward my team. “It was hard for us. However. but also that they sensed the weariness of my team. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. I felt the tension in the room. Ted said. as the negotiator came closer. fit.” Bob: Ted timed this perfectly.almost willing to accept any deal. The old agreement specified a 30-day period. because it makes you pretty vulnerable. symbolizing that he was agreeing to the entire final offer.
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. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. However. the negotiator skillfully finishes his words of congratulations by inserting one last key demand.
My name is Jay Vahaly. too. Jay. the following exchange occurs. I’ve worked with you before. The next morning. Whether you are really bluffing or you are serious. all from Sue Wilson. He stopped by Pembroke one day to look at the new models. Your opponent will have to either let you go and run the risk that things are really over. He really likes it. be sure you think this through beforehand. (Vahaly drives the new Highlander home. Sue: Well.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. I don’t want to negotiate. but his Avalon has been a good car. right? Jay: Yes. how did you like it? Jay: Okay. and he can simply buy it when the lease expires. here are your keys. Sue: I remember you. what can you do on a 36-month lease? Reaching Agreement 181 . You had time to assess my car.) Jay: Sue. a veteran salesperson. but my Avalon is a good car. Jay. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. but I thought I might want to try a new Highlander. or go after you and perhaps make a new concession in order to get you back to the table. Jay: Hi. and the lease on my Avalon is about to expire. if I roll over the lease to a Highlander. I like it. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. You bought your wife a new van just last year.
they came down to $199 more on a thirty-six month lease. $100 more.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Please go back and work out a lower lease payment. Sue called him as soon as he walked in the door and offered another $50 break on the lease. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. (15 minutes later) Sue: Well. Jay. These Highlanders are hot items! Jay: Well. He effectively used the walk-away tactic to let Sue know that he was firm on the price. I’m disappointed. They’ve talked about retiring in recent months. Jay—wait. Jay accepted. but 182 50 Practical Negotiation Tactics . He was prepared to keep his Avalon if the lease was even $1 more than his limit.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. That was the figure he was looking for. a successful musical instrument sales and rental store. Sue: I’ll try. Jay: What? I was thinking the lease payment would be. Sue: Sorry. Let me try again. Jay. (He walks away) Sue: No. (Jay got in his car and drove home. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. I thought I’d get a fair deal. at most.
Michael: Well. Larry: Judy. Michael calls on them again with a check for $5. How’s business? Larry: Great! I’m surprised to see you again.both of them love their store.5 million. Two months later.5 million. Michael: Good morning. visited their store. and I only need your building to own it. and I’m not interested in less. What do you think? Judy: Larry. go back to your office. He met with Bizannes twice before. Michael Roberts. Larry: Yes.0 million. Larry. but their continued walkout convinced Michael that they would hold firm. Reaching Agreement 183 . (Judy and Larry walk into the back room and close the door.) Larry: Michael is here again. Larry. In reality.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price. I still want to develop this block. One day. and we gave you our price. let’s eat lunch. which the Bizannes accept. Judy: Larry.5 million for the building.5 million. a local developer. come out here! (Judy comes out from the back room. with a certified check. and I’m prepared to offer you $4. after no contact from Larry or Judy. so why are you here? Michael: I’ve discussed it with my partners. they were prepared to accept $5. and he is offering us $4. today. Larry: Michael. our accountant said it’s worth $6 million. You rejected it. Michael: I have a check right here for 4. you’ve already told us that.
000. In ﬁnal offer arbitration. which she has kept in a barn for over ten years. Lynne told Jenny that she and her husband Gary have restored two other Singers. In most arbitrations.000. One day Lynne dropped by for a visit and the discussion turned to the old Singer. Let’s split the money. Jenny: No. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. That was the deal. Lynne responded that this was their intention. but they wanted to give Jenny $500 for her “share” of the machine. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. Jenny told them to sell it. 184 50 Practical Negotiation Tactics . In arbitration. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Lynne and Gary bring the restored Singer to Jenny’s house. We have a few dollars invested in parts and we had fun working on it. Jenny has an antique Singer sewing machine. Six months later. Example 1 Jenny and Lynne are sisters. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. In mediation. Each party wants their offer chosen. Lynne: No. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. both sides have agreed in writing to accept the arbitrator’s decision.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Both involve the use of third parties who are objective. 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). I offered it to you for nothing. Keep the $1. which is generally voluntary. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. They inform her that they put the machine on e-Bay and have an offer of $1. I won’t take it. and would be able to restore hers as well. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring).
Example 2 Ralph: Well. but we’ve made no movement on any of them since we started. he did not need to “haggle” with them. My troops are getting restless. They should get the other $950. Their father found Jenny’s position to be the most reasonable. so I am invoking the finaloffer arbitration ground rule we have in place. first on the health insurance co-pay. Any increase in value was due to the work of Gary and Lynne. after six weeks of negotiating. Tina: Good. on Friday. Ralph: I know. Ralph: Right! (Friday at 3:00 p. Tina: Yes. I can’t see any way to reach an agreement. since he could only choose one offer. (One week later) I think Jenny’s position is the most reasonable. and meet back here in 72 hours—3:00 p.” Lynne proposed a 50-50 split. As a brief explanation. based Reaching Agreement 185 .m. I have chosen management’s offer to keep it as it is under the current contract.Jenny: Dad: Okay.m. Tina. At best. Then we both submit our final offers to Judge Ryan within 48 hours. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. we are down to only three unresolved items. The union’s position could have run into millions of dollars. the old machine was only worth $50 when Lynne hauled it away.) Judge Ryan: Here is my written. I’ll buy that. binding decision on the three items.
money. Well. and an item that large should have been negotiated at the table.000—less than 1 percent of the total package. but we agreed to this process. nor why their method was superior. 186 50 Practical Negotiation Tactics . I have chosen management’s offer because the union did not justify why the past practice should be changed. I’m not happy with your decisions. I have chosen the union’s final offer. reasonable resolution to their last three unresolved issues. and peacefully finalize a contract that contained several important gains for both sides. Ralph. No increase has been given for six years. At least we both saved time. on the clothing allowance.Ralph: Tina: on last year’s data. I’m sure you realize that we could have taken six more weeks to reach the same point. It will only cost $120. and stress. Conclusion The final-offer arbitration process enabled the parties to gain a fast. Finally. Second. Now let’s get a signed contract. on the merit pool distribution method issue.
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. we won’t be involving our real estate agent. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. and felt that they would have to work fast to make an offer before someone else did. however. During a discussion. The owners were selling the house without a real estate agent. If we shake hands on it right now. Seller: We’re asking $152. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. They saw the “For Sale” and “Open House” signs. Example 1 Bill and Paulette had been house-hunting for some time. and while Bill and Paulette had been using an agent to help locate houses. and decided to stop by to see if they liked the house. They were not the only couple to come to the open house. They finally looked at a house they really liked.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.000. everyone is busy grappling with the details of the negotiations. Bill: Reaching Agreement 187 . At the very least. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. not the furniture. Bill and Paulette fell in love with the house. Seller: Yes.000. Bill pulled the seller aside. and one of the other couples looked very interested. We’d like to make you an offer of $150. Obviously. they looked at this particular house on their own. all the usual stuff in a sale.
a public agency. Seller: Okay. look this over. since he probably would have missed them) Yes.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. and had been prepared to drop his price to $145. Sign here. The supervisor pointed out that he had a staff of 20 or so women. and that the problems with her job performance were. he began to have “problems” with her job performance. the hutch. and the garbage disposal. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination.000. in fact.Seller: Just a minute. When he had the chance to put the deal in writing. the hutch. then we have a deal. Bill: (pleasantly surprised to learn that the garbage disposal.) Seller: So. the refrigerator. If it’s what you meant. real. but I’d like to make sure there are no misunderstandings. he listed an attached hutch in the kitchen. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . Conclusion The seller had always intended to leave the garbage disposal. and the two area rugs. I think we can work something out. Example 2 Monica brought a sex discrimination charge against her employer. she said that her supervisor had repeatedly asked her out. The supervisor assured the employer that there was no basis for her complaint. he listed the stove. he left the price at $150. (The seller recorded the offer of $150. all window blinds and drapes.000. In the section for fixtures and miscellaneous items to be left on the property. It worked. and two area rugs. the house is yours. that’s what I meant. Under the section for appliances to be left on the property. and the two area rugs were specifically included. Let me just get the standard “offer of sale” form and fill out what I hear you saying. and when she refused. In her complaint.
And the confidentiality clause is standard. and expensive matter. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100.000. Look. but said that fighting the charges would be a long. then Monica had to acknowledge that the supervisor did nothing wrong. by this time. You’re just trying to make it seem as if your supervisor did nothing wrong. you didn’t mention in the agreement that in exchange for the $100.000. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said.there was little basis for the complaint. But the employer doesn’t want to go through the expense and publicity of a trial. He’s happy to prove that in court. my client is supposed to formally withdraw the complaint rather than just settle it. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. but it’s not standard when a complaint is formally withdrawn. drawn-out. I’m He: She: He: Reaching Agreement 189 .000.000. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. Why’s that? Well. The supervisor insisted that if the employer felt he had to settle. settling—What difference does it make to her? She’s getting her $100. and must agree not to tell anyone about the $100. even though you are paying Monica because we can prove he did do something wrong. Withdrawing. It might be standard when there’s a settlement. He offered to send settlement agreement papers to her. even though we’re certain we would prevail.000 without actually having to prove anything. Monica had.
She: authorized to pay $200.000 just to get the employee to “withdraw” the complaint. but word did get out that a public agency paid $200.000. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. It was made clear that the employer had paid the additional $100. Monica accepted the $200.000.000 when all that was asked for was $100. There was a confidentiality agreement.000 and the conditions of the offer. I’ll take your offer back to her and let you know. to his disadvantage. 190 50 Practical Negotiation Tactics . Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.
Putting the Agreement in Writing 191 . when they engage in honest “give and take” negotiations. commitment. talking is not always the same thing as communicating. operating under an agreement after it has been reached can be even more difficult. Reaching an agreement is the first step. If the agreement reached at the time had been put into writing with all three sisters signing it. “Oh. A Communication Hearing is not necessarily the same as listening. a written document is hardly necessary.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. Certainly someone has said to you. and contract. but some of the decisions were put off for a couple of months. the three sisters reached an amiable agreement. rather than attack each other. but it was not what I meant. it would have been easier to resume negotiations at a later date. When two friends agree on what movie to see. and when they agree to solve problems together. One way to help the parties abide by an agreement is to put it into written form. “That may be what I said. however. Think of how often you have said to someone. A union contract. Putting an agreement into writing serves three purposes: communication.” Clear communication is essential if you want to reach an agreement and have it abided by. depend on the kind of negotiations in which you are involved. reaching an agreement is sometimes a long and difficult process. As these examples of personal and business negotiations show. I thought you said something else. In Tactic #17 (Package Items). even an informal agreement benefits from some type of written documentation. then the parties have to abide by the agreement. However.” By the same token. of course. Unfortunately. most certainly needs to be in written form. The degree of detail and formality of a written document will. it is much more effective in the long run when the parties enter into “win-win” agreements.
When you create a written record of the details of an agreement. or movements being used by the sender. or movements. that is. pictures. the price is spelled out in the loan document as “twenty-two thousand. The receiver has to decode the message being sent by trying to understand and interpret the words. Larry wouldn’t have had to argue over a bill for the plumbing work his cousin Will did if he had asked for Will’s estimate before accepting his offer to help.” In Tactic #14 (Don’t Always Hide Your Weaknesses). or express a thought or emotion through words. And because the sender and the receiver are two unique individuals. pictures. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. you have created something tangible that can be referred to in the future when memories become fuzzy. In Tactic #4 (Use Objective Criteria). a couple of months away. seek information. sounds. When communication is limited to the spoken word only. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. he can be reminded of the details because it’s all there in black and white.944. His mom could more easily enforce the agreement if she had it in writing. If Jason fails to live up to his side of the deal. the message being conveyed and received might be understood differently. 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.Communication is a process that involves a sender and a receiver. 192 50 Practical Negotiation Tactics . The sender wishes to convey an idea. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. sounds. Who isn’t excited about buying a brand new SUV or truck? Until. nine hundred and forty-four dollars—$22. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing.
If you have agreed to pay someone to house-sit while your family is on vacation. how many. pulling an agreement in writing. When you are ready to commit yourself in writing. what. Failure to do so can lead to big problems. which kind of. Putting the Agreement in Writing 193 . protect yourself by having a written. leading to misunderstandings and contract disputes. and dated agreement. one party will change behavior in exchange for something of value from the party who wants the behavior changed. as many people learn when they purchase a home. Generally. one party will work if the other party pays for the work. or it isn’t an agreement—it’s merely the conveying of a gift.Contract Finally. your plants die because the house-sitter wasn’t told to water them. and getting all the parties to sign it usually creates an enforceable contract. have your spouse also agree to the details of the agreement. and so on in standard contract form. the real estate contract includes information about the buyer and seller. and put that information into the document. why. in writing. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. Here’s what we mean. WHAT? The written document should clearly describe the item(s) covered by the agreement. the address and description of the real property. which. One party wishes to buy what the other wishes to sell. In either case. 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. dating it. details such as what fixtures stay or what appliances go can be easily overlooked. when. before the trip. Carefully and completely describe the subject matter of the agreement. ask yourself the basic questions of who. where. 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. say. However. You can do this more formally by taking them to court (perhaps as a last resort). WHO? Provide of the full names the parties necessary to the agreement. Both parties must receive a benefit or something they personally consider of value. and how much. signed.
dating it. in fact. which one or which kind of. how much or how many. And it can create a tangible reminder of the deal (or an enforceable agreement.The remaining questions fill in the details of the agreement. and having all parties sign it ensures that the parties have. depending upon the deal: when or where. if that becomes necessary). The more-specific and clear these details are. Putting an agreement in writing. 194 50 Practical Negotiation Tactics . agreed to the same thing. the better. It gives the parties an opportunity to really buy into the deal.
Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .
Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: 196 50 Practical Negotiation Tactics .
________________ 2. ________________ 10. ________________ 5. ________________ 6. ________________ 8.Name of Negotiation Tactic 1. ________________ 3. ________________ 7. ________________ 4. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 9.
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and Law. Kennedy. Negotiation Skills. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Inc. George.: New Harbinger Publications. 1988. Inc. Upper Saddle River. Patton. Irwin.: Crisp Publications. and J. M. The Essentials of Negotiation. McKay. Oakland. Heavrin.: Waveland Press. Calif. and M.E. Ury. Fuller. Chicago: Richard D. Getting to Yes: Negotiating Agreement Without Giving In. References 199 . New York: Simon and Schuster. 2001. and S. 2001. 2004. Labor Relations and Collective Bargaining: Cases. Los Altos. 1999. K. Mediation. Prospect Heights. and C. Getting Together: Building Relationships As We Negotiate. Practice. D. Cleary. 7th ed. New York: Penguin Books. Cohen.. Inc. 1987. 1996. Negotiating in the Real World. Clark. W. E. David. Inc. Fiske. The Negotiator’s Handbook. New Jersey: Prentice-Hall. and S. R.REFERENCES Carrell. The Negotiation Handbook. Victor. 1991. J. Pocket Negotiator. You Can Negotiate Anything. 1980. Lewicki. Calif. Brown. Ill. M. New Jersey: Prentice-Hall. Eshelman. New York: Bantam Books.. R. Inc. Minton. Fisher. Gavin. 2nd ed. 2nd ed. LittleJohn. C. Saunders. Domenici. 1997. Fisher. Inc. M. R. New York: Penguin Books. and B. 1991. 1989. The Relaxation and Stress Reduction Workbook. Gotbaum. Sharpe. 1988. W. New York: M. Patrick J. Inc. University of Missouri: Columbia Press. Roger. New York: Basil Blackwell. Upper Saddle River. and J. Roger. Maddux. Herb.
Howard. 1998.Nierenberg. Labor Relations in a Global Economy. Taking Charge/Managing Conflict. The Eight Essential Steps to Conflict Resolution. Getting Past No: Negotiating with Difficult People. Tsogas. Lexington. Inc. New York: Penguin Putnam. Cambridge. R.negotiationsources. Bargaining for Advantage. 1981. Inc. www. L. Cambridge. B. William. Raiffa. Upper Saddle River. Lectures on Negotiation Analysis. George. Sharpe. Heath and Company. Inc. New Jersey: PrenticeHall. Raiffa. Shell. New York: M. The Art and Science of Negotiation. 1996. Thompson. 1991. J. 2001. C. Weeks. Dudley. Stulberg. 1999. Inc. G. 1982.E. Gerald I. Howard. The Art of Negotiating. New York: Simon and Schuster. Ury. Massachusetts: D. New York: Viking Press. 1987. Massachusetts: Harvard University Press. The Mind and Heart of a Negotiator. New York: Bantam Books.org 200 50 Practical Negotiation Tactics . Massachusetts: PON Books. 1994.
she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . The University of Nebraska-Omaha. The Personnel Administrator. and the University of Louisville. and served as President of the Board and Mayor Pro-tem for three terms. During his academic career he has received awards for both outstanding research and teaching. and negotiations. Carrell are in the fields of collective bargaining and labor relations. The Journal of Accountancy Training. Marshall University. which is located in the greater Cincinnati area. HR Magazine. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. The Academy of Management Review. Bakersfield.A. Books published by Dr. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. M Christina Heavrin J. Labor Law Journal. He received his doctorate from the University of Kentucky. he was elected to the City of Louisville Board of Aldermen for five terms. and Public Personnel Management. organizational behavior. In addition. Personnel. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Organizational Behavior and Human Performance. Business Forum. Carrell has held academic positions at California State University. and MBA and B. Morehead State University. Human Resource Management. Personnel Journal. in Economics from the University of Louisville. Carrell is Dean of the College of Business at Northern Kentucky University.ABOUT THE AUTHORS ichael R.D. Dr. In addition to negotiating numerous litigation settlements and contracts. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky.
an agreement between the State of Kentucky. Jefferson County. the City and a for-profit hospital for guaranteed indigent health care services for city residents. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs.park and a successful industrial park in the City’s enterprise zone. Ms. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. 202 50 Practical Negotiation Tactics .
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