SECTION I: INTRODUCTION

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

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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.The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time.

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. it’s a deal.) Let’s take all our Beanie Babies to my house to trade! Okay. 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. and go play somewhere! Cybil: Well … Okay. I like the frog. such as a hotel conference room. girls. and so on. Cybil. 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. they have the information they need at their fingertips. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. Mother: Hush. Bailey: Cybil: Preparation 21 . too. Make up your minds. (thirty minutes later) Bailey: So. (Think of the showroom tactics used by car dealers. they control the breaks and environmental factors. the frog is everybody’s favorite.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Let’s talk. For the past three years. your rate of $3. And cut the training hours from 55 to 20.000 per month is one of the highest in town. we’ve been fairly happy with your responsiveness. causing our reps to spend hours on the road. You are located outside our primary service area. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). firm offer if they decided to continue negotiations. Miguel: Well. Sandy. Sandy. we’re here to negotiate a new service agreement. We estimated that it has cost us more than $50. She very wisely recognized the routine and forced Andy and Paula to give her a clear.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. And we need to add a clause that holds your company responsible for machine damages. Liz: But we still want to renew your contract. Miguel: But not at this ridiculous rate.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. perhaps even unintentionally.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. Sandy: What? First of all. And we want to change the 24-hour service response time to 48 hours. your account has taken too much time. 40 50 Practical Negotiation Tactics . the quality of the technicians’ work. Miguel: I’ve figured $4. and your training programs.

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

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

But I am able to offer you a $. (beginning to sound irritated. 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. Customer representative: Let me pull up your account. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . how would anyone who might only have residential service even know to ask? Well. I would have known I was paying too much. to begin now. but this was quite a shock. But as a very good customer of yours. I would think you would have given me the best rate you offer new customers. 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. and I also realize that if I had examined my bill closely. Well. I realize that that might be the rate I started paying when I first took your service over eight years ago.10 per minute rate on your long-distance service. It hasn’t been increased at any time. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. Mike.I expected the bill to be higher than usual. Had you brought this to our attention before. I see that the rate you are being charged is the rate we offer for the type of service you have with us.

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

The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. Working with fireworks is working with explosives. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. and that they should be asking for a fairer base wage for the work they do for you. 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.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. and it’s getting old. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . they would become dissatisfied with their pay and want their base pay increased. and you just can’t be too careful. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. I’ve got to have the employees with the most experience to protect this place. Owner: Now. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. On those overtime shifts. that’s just not fair. They will be putting the plant AND their fellow workers at risk by not being here. The owner told the employees that he was worried that during the overtime shifts. The employees’ negotiator finally decided to use “indignation” to break the stalemate. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. and it’s not what we’re even talking about. lesssenior employees might be at greater risk of injury because they have to handle explosives.

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

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

which will bind us to the outcome. to submit a sealed offer to buy/sell the business sixty days from today. Both came to Raiffa to help negotiate a settlement. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Thanks for making this last step as easy as possible. Two business partners had been working together for ten years to build a successful business. Both sisters felt that the process enabled them to resolve the issue fairly. I choose to buy it. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. You will both agree. I’ll pick it up tonight. They accepted his suggestion to use the “reciprocal buy-sell strategy.Susan: Mike: Well. in writing. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder.” Howard: Since in this case you are talking about a multi-million-dollar business. and then decide how much more “emotional value” it held. Here is my check for $800. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). the lower bidder must agree to sell his half-interest to the higher bidder at a price that evenly splits the difference between the two bids. After I open the bids. They thus were able to determine the highest price each was willing to pay for it or receive for it. Lectures on Negotiation Analysis. I suggest a slight modification to the process. (sixty days later) 48 50 Practical Negotiation Tactics .

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

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

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

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

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

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

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

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

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

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

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

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

The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. 2: Distributive Bargaining Process. (2004). such as proposing to continue at the current rate or price.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. Adapted from Labor Relations and Collective Bargaining.750) Target Point ($24.500) Resistance Point ($25.500) M $21. Carrell and Christina Heavrin. by Michael R. as illustrated in the following figure: Seller Resistance Point ($22. None is as important as the first one.500) Fig. This is a practical starting point that will not anger the other side (and might even be expected). 190–192. quick agreement.000) Settlement Range ($22. 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. for example. “Distributive” bargaining (“win-lose” or “zero sum”) is used. Exchanging Initial Offers 61 . in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. Another common strategy is to start with the status quo. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party.000 Buyer Initial Offer ($21. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. The negotiator firmly states that it is their best offer in an attempt to gain a nice. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000 22 23 24 25 26 27 Initial Offer $28.000) Target Point ($23.750–$25.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 can hardly argue with that. The first thing I’d like to talk about is what we are going to do about the cars. ABC usually uses UPS 76 50 Practical Negotiation Tactics . and you got your sports car. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. The monthly payments are about the same. a wholesale art dealer. 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. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. Frankly. we would have paid down our school loans more.. Tim: Okay. yes. I think that makes sense. Tim: Well. I don’t intend to “stick” you with anything. an art gallery. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. They also agreed that Tim wouldn’t have to pay her that amount for five years. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. as you remember.Kathy: Hey. I got my convertible. and he could pay it in annual installments over a five-year period. and XYZ Co. Kathy: I suppose we should look at the school loans next. Example 2 ABC Company. hold on. When we bought them two years ago. Okay. What do you want to do about them? Conclusion Having agreed to two items very quickly. Kathy: Now. about the house and furnishings. as long as the cost was approximately the same.

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

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

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

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

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

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

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

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

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

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

Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. The buyers were very motivated to sell. Lyle Foxworthy. the company president.) Bob: I’d do it for $3. 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. Frank: Me too.000. They outlined how they would develop a new employee performance-appraisal system. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. they had offered $325. Sue: Then you do it.000 for each of us—$6. since they had already bought another house. If. then let them make a counteroffer. as Sue had first suggested.Sue: Don’t be crazy. Both parties felt that they made a good deal. Give us your lowest price. but who knows what they are planning on offering. realizing they offered too much.000 total. as requested by the human resource director. the sellers obviously would have accepted and Jay and Sue.500—half the difference! Sue: Great. and the offer was based on fact: the prior negotiated price. was very impressed with their presentation. Exchanging Initial Offers 87 . I can’t tell our realtor $290.000. (Bob and Frank meet privately to discuss the situation. That’s an insult! Jay: Well. (the next day …) Jay: They made us a counteroffer of $307.

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

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

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

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

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

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

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

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

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

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

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

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

10:30 p. midnight during the week is the only thing I’ll consider. and that’s not negotiable. The union contract required that management renegotiate this change in the grievance procedure with the union. Rob: (there is no hesitation in this voice) No. and d) a hearing with company owner if the matter is not resolved in 20 days. and the union foreman would report directly to the plant manager. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . Under ABC ‘s contract with the union. Jasper: Midnight. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Under the restructuring. and that’s it. Jasper: (without taking a breath) At best.m. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. b) written complaint to a floor manager if the matter is not resolved in 5 days. curfew on TV and other noise every night. No agreement was reached.m. the positions of non-union crew leader and floor manager would both be eliminated. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. I want a 10:30 p. The appeals procedure would have to be altered to reflect the restructuring. but changed his mind when he saw Jasper’s attitude. is all I’ll consider.) Listen.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

then the pension benefits overall will increase by $10. The airline industry is in a slump. The company wants to trade paying for dependent coverage for better pension benefits.000. 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. The pilots want dependent coverage paid for by the company.000 figure.000.000.000 a year over the next five years? Company: Yes. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.000. you are taking a risk on the costs increasing.000. If we invest the $200. Over the last five years. 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. that would be the minimum increase. as it has always been. and the premiums for health care just keep going up. Over the next five years. With long-term planning and investments.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. with all wage and operations issues resolved fairly early. and we know that with this new contract term of five years. However. and are willing to keep pension benefits the same. Pilots: Look. This is just a cash-flow problem that your members have to understand. the company can make your pensions much better. what they really need is for you to cover the costs of dependent coverage.000. And we cannot afford that $1. This would be a better benefit in the long run.000 to cover the premiums for dependent coverage. we know that health insurance premiums might skyrocket. As best as we can tell. 124 50 Practical Negotiation Tactics .000 (which we reasonably should have expected to pay in premiums) in the pension account now. the airline paid a total of $200.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. But only a few of our people are close to retirement age.

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

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

00 per month. Great! So. as promised. I can’t afford that much.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. (looks at the numbers) That looks good. do you want HBO? How much? $5. Once the buyer volunteered that $300 was an affordable “slice. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. down payment. do you want Disney? Yes.” She decided to cut the $45. Making Counteroffers (The “Give and Take”) 127 .000 down. Instead of a three-year lease. Saleswoman: Simple.99 per month. can’t you? Buyer: Yes. Sure. Let’s see. You can do that. you can get the Disney channel for only $5. But my neighbor pays $39.00 per month.” she had him—she worked around the $300 slices. I can afford $6. I can’t discuss another client’s account.Buyer: I don’t see how you can do that. but what else must I buy? Only the basic service for $8. but let me see the numbers. it will be a five-year lease. and added the trade-in. and payout slices to reach the total price she wanted.00 per month for your service. with your car and $6.000 price into “slices” the buyer thought reasonable.

Any other kids’ channels? Yes.99 per month. 3. 128 50 Practical Negotiation Tactics .00 per month. and probably felt much better about the total negotiated package because it was presented in modest individual slices. we had that before. Thanks. Conclusion The owner thought his neighbor’s service at $39. But that’s all! Then we’ll hook you up on Monday. Yeah. instead of one total amount. I really want the sports channels. they asked about the Cartoon Network. Great. and my wife wants the old movies.00! Why? Because he judged the per-slice price to be reasonable. Disney is for the kids! The sports channels are for me. but he agreed to six “salami slices” for a total of $38.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. and SI 1. Okay. What about the music package? Yes. 2? How much? $8. That’s another $5.00 a month. 2.00. The total is $38. That’s $5.00 per month was far too much.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The same kind of thing happened a couple of years before that: In the middle of August. Example 2 Let’s face it: Sometimes one party holds all the cards.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. such as the advantage of time. Since his toilet had overflowed and water was continuing to run all over the floor. his air-conditioning unit went out. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. when one side has “leverage” over the other. for example. and was forced to pay whatever they demanded. On the other hand. while the other is not—that is. there were times when there was no pressure and no emergency. If the employer is a shipping and express mail company. the guy was in no position to dicker over the price of the repair. once had to call a plumber in for emergency repairs. It is sometimes referred to as “pressure bargaining. its union has the advantage in the weeks just before Christmas. He was at the mercy of the company that could install an appropriate unit the fastest. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. Unions can strike at any time to achieve their goals if they have some leverage. not blessed with many household repair skills. he was able to successfully bargain for other services. Try bargaining with a plumber! This homeowner. because this is the busiest time for that industry. The owners of professional sports Applying Pressure 141 .Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. Since the heating and air conditioning company held no leverage over him. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year.

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

However. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). Jason was having a hard time getting the salesman to lower the price. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. attach legs. supposedly the bargainer in the household. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . is expected to dicker over the price.” Many people have witnessed or used this effective negotiating tactic. so the salesperson delivered the suite himself. we’ll take the suite if you’ll throw in free delivery and set up the furniture. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. etc. What started out as a single issue is now a combination of a major issue and a much smaller issue. With a great deal of effort. miles from their home. His tactic was to throw in a “nickel” in order to make lots of “dollars. Conclusion The amount the couple spent was fairly large. he also set up all of the furniture in a second-floor bedroom. Her husband Jason. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. Brenda did her part when she said.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.” Under store policy. delivery was limited to a small geographical area.” thus extending the scope of the negotiations. “Okay. and the delivery carrier doesn’t set up mirrors.

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

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

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

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

000.000. but we feel that it’s a fair offer. has owned the house for 24 years and is downsizing to a condo. What? That’s $35. The owner.500.000. I’ll get back to you.000. Sometimes. and $237.000. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. This offer is for more money than any four-bedroom houses on this neighborhood list. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . $235.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. $229. They believe it is overpriced. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. the other party will ignore or refuse to believe the information. and we are countering with an offer of $250. Sam Jones. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000 under the listing price! We realize that. $237. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. (Next day) We’ve reviewed the records you’ve produced. Here’s a list of the five that are about the same size as yours. We love your house. They sold for: $225.000. 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. but the key is to gather facts that you might need—not just the facts that you will need.

Hatfield: My staff has done a lot of research.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. who was not particularly knoledgeable about real estate. That’s the bottom price. Supervisor: If I okay this purchase order.000. Conclusion Hatfield had anticipated what his supervisor’s position would be. and we know that only this model will meet our needs.000 each.600 unless the company president approves. I’ll get called on the carpet. Order the new computers. and wisely chose exactly when to present them in order to make his point. I asked for a list of all new PCs bought this year. Supervisor: Well.600 for a computer. Making Progress 173 . let’s not worry about it. I’ll be… Okay. if other departments have ignored the policy. Example 2 Supervisor: You know the policy. No one can go over $1.400 each. You can’t pay more than $1. We’ve talked with purchasing and we have the authority to buy seven for $2. Well… We have a written counter of $245. We accept. Conclusion The Joneses had based their asking price on the advice of a friend. He found facts that supported his position. Hatfield: While I was at purchasing. and did his homework. Here it is. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. The last 20 were over $2.

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

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

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

the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. When two parties believe they have an oral agreement. In this process. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). 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.Stage 7: Reaching Agreement he final stage! It might come minutes. 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. When multiple issues are at stake and most have been agreed upon during negotiations. hours. days. T Reaching Agreement 177 . this tactic can produce an agreement. and the classic Walk Away (Tactic #48). If friends or neighbors need to settle something but prefer to avoid the negotiation process. 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 both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. or even months after the first offer is presented. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. this process can easily result in a final settlement. They bring it out when a dispute arises. and the child learns an important lesson about life.

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

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

However. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. 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 skillfully finishes his words of congratulations by inserting one last key demand. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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