This action might not be possible to undo. Are you sure you want to continue?
SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
such as these: • You receive the wrong order at a restaurant. accept what is given. they pay the sticker price. But if you scored 8 or less. 4 50 Practical Negotiation Tactics . Who. practical tactics useful in real-life situations at work or at home. 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. 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. or engage in an unproductive argument. exactly. with neighbors. some will in retrospect even remember being the victim of one or two of them. Most readers will no doubt recognize some of these strategies. • A child wants a new toy now. at a flea market. • A co-worker asks for volunteers for a new project. with family members. Unfortunately. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. Instead. few people understand that normal interactions represent bargaining opportunities. but many of us miss the opportunity to bargain in other situations. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven.negotiator! Pass this book on to someone else who needs it.
3. Interdependency. The parties involved are interested in reaching a common goal. Decision-making ability. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. The parties are interdependent: what one party does affects the other. 4. Multiple parties. and I don’t have time to wait for another. perhaps the employee can say. In some situations. be prepared to bargain. 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). All of these situations are opportunities to negotiate. such as price. There must be a conflict in the sense that what one wants is not what the other wants. you must advise the other party of your intention to negotiate. There are flexible elements to the situation. since you lost my reservation. For example. “I’d like Introduction 5 . A neighbor wants to remove an old tree on your property line. Your spouse wants to buy new furniture. or items of value. that can be negotiated. Flexibility. A teenager wants to buy his/her first car. some resolution must be negotiated. Mutual goals. “Well. 5. perhaps you can say to a hotel clerk. Each one has the five key characteristics necessary for bargaining: 1. one party is only allowed to follow policy or must wait “until the manager arrives.” When you recognize that something can be negotiated. Both sides want a settlement. Two or more sides are involved.• • • • • • • A hotel clerk tells you that your reservation was lost. The parties involved can make a decision by themselves. What are my alternatives?” During an employee evaluation. condition. A friend is about to select the movie he/she wants everyone else to see. 2. time. In some circumstances. Therefore. A service repair person gives you an estimate on some work.
time to look over this performance review and respond point-by-point. but I believe it adds value to our house. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. 6 50 Practical Negotiation Tactics . negotiations can be concluded with a written or oral agreement. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. “I see why you want to cut down the tree. the facts.” To a neighbor you can say. and the tactics that might move the negotiations along. and meet with you again. and use the forms in the back to identify the issues. 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. Once a settlement is reached. the other party will realize that you intend to negotiate and do not accept the situation. Keep this book handy when preparing for any type of negotiation. the parties and their interests.
do you believe that you negotiated the best possible deal? 4. have you ever required a written agreement covering chores. or child. In the past.? 10. but you did not? 8. When making a major purchase. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. or division of household duties. did you request appropriate compensation? 6. spouse. The last time you received sub-par service or food in a restaurant. Yes No Self-Assessment Quiz 1.How good are your negotiation skills? Place a check in the box that applies to you. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. do you routinely negotiate a last add-on before you close the deal? 9. When you purchased your last home or car. Do you wish you could negotiate a change in your job duties or salary? 7. etc. Do you routinely negotiate for better accommodations when you check into a hotel? 3. allowance. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. In the past. As a parent.
This page intentionally left blank .
They’re referred to as “win-win” because each side can achieve their goal. The “Quick Model” approach outlined below is good for simple negotiations. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. 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. etc. 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. including those that are less obvious. thus allowing each side to achieve one of their goals. the process will probably take several weeks or months as the parties move through all the stages.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. If it is a relatively informal situation. decide how complicated the issue is. one for another. the process will be fairly straightforward. On the other hand. state. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). The Negotiation Process 9 . Examples: • office location (city.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation.
The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book. What one side gains. The Comprehensive Model Negotiation is more of an art than a science. Depending on the situation and the parties involved. Examples: • an item sold by one party and bought by the other • wage increases won by one side. 10 50 Practical Negotiation Tactics . rearranged. but feel free to try them when they seem most appropriate to your specific circumstance. stages can be combined. or even skipped altogether. the other side loses.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with.
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.
This page intentionally left blank
SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
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. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. and equipment. With only two weeks remaining before a threatened strike. The $56 million dollar business took them 30 years to grow. inventory. was a power play. For the past two months. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. The union is demanding wage and benefit increases. When negotiations with the union became hopeless. providing them with a very good income for life. the Jaggers decided to seek buyers for their land. The threatened strike became a reality. notified all the employees of their intentions. 16 50 Practical Negotiation Tactics . his BATNA was not to hold out for more money. They learned that their assets would be easy to sell and were worth more than originally estimated. The owners. but rather what the buyer planned to do with the car. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. as Harvey had for many years.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. The Jaggers gave the union their “last. The union negotiators convinced the employees that this too. The union negotiators thought the Jaggers were bluffing. Conclusion Selling their business was the Jaggers’ BATNA. best.” which was refused. as a last resort. and final offer. and it now employs 230 craftsmen. selling became an attractive alternative to a strike or prolonged battle. In this case.
Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. what the other party’s desired outcome is. she might have to take a lower offer just to be able to move. so Tom was surprised when John called him out of the blue one day with a proposal. you know. it’s to your advantage to know what is behind a seller’s decision to put it on the market. because if the company does not provide relocation benefits. I guess I couldn’t take less than $20. and told John several times to let him know if he ever wanted to get rid of it. I’ll have to think about that. How much are you thinking it’s worth? John: Well. A person who has to sell her home because her company is relocating her. Just running out of space. sure. at some point. right? John: Sure. John: Tom: John: Tom: Tom. Tom: $20. I think so. Preparation 17 . Example 1 Tom had always admired John’s 1861 Confederate rifle.000. 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.000? That’s more than I planned. If you are the party making the offer on the house. This is a good thing to know. for example. 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. Make me an offer. John assured Tom that this would never happen. Are you finally ready to sell it? Yes. Just as important is the why. it’s still perfect. What changed your mind about getting rid of it? It is still in perfect condition. Gosh. 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. you still interested in my rifle? Of course.
500—we’d have a deal.500 had an 1861 for sale. let’s do it.000. has begun negotiations to sell his firm to BigManu Company. Example 2 Rick. we really want to buy your company. No longer worried about John’s motives. Was Tom interested? Tom declined. BigManu: Rick. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18.) Tom: John. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. the owner of a small manufacturing company. When Tom found out why John decided to sell his rifle. However. let me think about it and I’ll get back to you. Conclusion Tom entered into the negotiations suspicious of John’s motives. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. Tom: Okay. Without some trust. Tom now felt comfortable negotiating the price. Well. I’ve been thinking about your offer. and now the two-year requirement has become a stumbling block in the negotiations. if you could come up a little—say $18. we 18 50 Practical Negotiation Tactics . Rick needs to remain president of the company for the next two years. fearing that this will put all of his employees out of work. He is two years away from retiring and does not want his business to fail before he does. I don’t think I can go higher than $18. it made the negotiations easier. The sale price for the company has not yet been agreed to. parties to a negotiation are not likely to reach agreement. but then he will be happy to retire. John: Well. but I could get the money to you right away. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. but thought this might explain John’s sudden interest in selling the rifle.Tom: Okay. and we’re committed to keeping it open as a major division of our company.
What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. Preparation 19 .) BigManu: Okay. they decided to put their price on the table and revisit the issue after a price was agreed upon. Rick: I built this business from the ground up. my employees will prove to you that they are uniquely able to run this place. let’s talk about the job guarantee you wanted.cannot guarantee to you that ALL of your employees will be retained for two years. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. 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. Rick: These people are the best at what they do. Let’s talk later. Working as a division of your company. We still can’t find a way to do it. I need to give them some sense of comfort if this deal goes through. and we think it’s an odd request anyway. 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. The price they gave Rick was actually more than he had expected. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. and I hired every one of these people. Without this commitment. you will have a say in how the employees are treated. You’ll be in place to participate in our employment decisions. In hopes of pushing the deal forward. Within the parameters of efficiency and effectiveness. We just can’t make good operational decisions with our hands tied. I just can’t go through with this sale. (Between negotiating sessions. I just want them to have a real chance to show you how good they are.
to tell you the truth. I certainly want to do all I can until then to protect my people. that might work. Rick: Well. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. This wouldn’t have anything to do with your own plans for the future. Conclusion By masking his real objective (giving himself two more years as president before retiring). Rich almost lost the deal. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions.BigManu: We intend for you to stay and become a big part of our company. Surely you’ll be able to “protect” your people if they are as good as you say. you’ll have a guaranteed “in” to protect your people. I’m hoping to retire in two years. would it? Rick: Well. 20 50 Practical Negotiation Tactics . but we won’t be completely tied to operations as they are now. Let me get back to you.
but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. and so on.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. Bailey: Cybil: Preparation 21 . Make up your minds. Mother: Hush.) Let’s take all our Beanie Babies to my house to trade! Okay. and go play somewhere! Cybil: Well … Okay. girls. they control the breaks and environmental factors. such as a hotel conference room. they have the information they need at their fingertips. Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. Cybil. I like the frog. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. too.Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site. (Think of the showroom tactics used by car dealers. (thirty minutes later) Bailey: So. it’s a deal. the frog is everybody’s favorite.
They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. The physical and emotional demands of 24-hour. Team B had clearly used its home turf to gain a substantial advantage. 22 50 Practical Negotiation Tactics . The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. Team A agreed to change the meeting place. Team A agreed to a settlement almost identical to the one rejected days before. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. and other conveniences in the adjoining room. About thirty-six hours later. The firm deadline was only four days away. not one member of Team A was chosen to return to the table. That’s why she wanted to go to her house. was still going strong. When negotiations resumed in two months over another piece of property. until we have a settlement. as long as they met in the boardroom of Team B.Conclusion Bailey. around the clock. having set up beds. Team A was whipped physically and emotionally. Both sides desperately needed to settle a property dispute. non-stop negotiations wore down the members of Team A. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. They were blamed for accepting the same deal that had been rejected only days earlier. in their own familiar setting. while members of Team B were able to stay fresh.” The chief negotiator for Team B agreed. although only ten years old. After forty hours of negotiating. meals. Team B.
and they were much lower than this. it became clear that all of those pipes had to be pulled and new ones put in. This uncomfortable negotiation followed: Larry: Will. Believe me. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. and show them the actual work that got done. Things turned sour. about your bill.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. Larry: Well. I gave you my “family” rate.” This can hold up an agreement and cost you in the end. and he and Larry have always gotten along. It was twice as high as the estimates Larry received from other plumbers before they started the project. though. I anticipated much less work. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. when Will presented Larry with his bill. If they tell us that they either Preparation 23 . Larry: Just make sure you’re comparing apples to apples. Will: Larry. Will is a licensed plumber. based on objective criteria (think property appraisals in real estate). I would have charged anyone else much more. When we got into it. After all. Larry was thrilled. Larry: But Will. I did get some estimates from plumbers. Larry had expected to pay him for his time. I was kind of surprised at how high it was. Let’s get the guys back in who gave you estimates. When you first told me about your project. you are likely to resent them for it and hold out. If you think that the other party knows more than you do. but was shocked at the amount of the bill. rather than give them the “advantage.
he used his financial expertise to analyze the investments of the college’s endowment fund. The estimates would have been higher than what cousin Will charged. they said. The college’s budget officer was understandably offended. and decided to bring the matter up at a Board meeting. Example 2 After Stuart was appointed to the college’s Board of Trustees. she had been investing the college’s endowment funds for many years. 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. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. He was disappointed in the performance of the fund. while she wasn’t an expert. Larry: That sounds fair. because (as Will pointed out) it wasn’t an apples-to-apples comparison. Had they actually prepared bids on the work. Budget Officer: I don’t know what your problem is. I certainly didn’t mean to offend you. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. I’ll revise my bill to meet the lowest estimate you get. Conclusion When the other plumbers looked at the work. Comparing the estimates to Will’s actual costs would have been counterproductive. From a look at the portfolio. and no one had ever questioned her performance. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. they would have had to revise the figures. they had to agree that their early estimates were low.disagree on the need for that work or that they would have done it for less.
I have a suggestion. Preparation 25 . then you and I can talk about changing our investment strategy. but we can ask them to plan and cost out each move. At the end of two months. because she did not have the background in investments necessary to trust such advice. Stuart realized that the budget officer needed very-specific “criteria” (such as the actual experience of investing the school’s endowment fund) rather than relying on an investor’s experience. I don’t question that they were sound at one time. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. the college is a private institution. considering commissions and all. Stuart: Yes. if both of them demonstrate a similar strategy and produce better results after expenses. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. but I want to be involved in the discussions with them about what we’re asking. As you know. I find that a more aggressive investment strategy produces a better return. but some of these stocks have really lost their value. there might be increased risk and some expenses for commissions. Stuart: No problem. Budget Officer: Yes. and its resources are limited. In this situation. Okay? Budget Officer: Okay. 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.were stale. I don’t want you directing how they’re going to go. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. but I think they more than offset the gains. but such a strategy also increases risk and costs more money to administer. Now.
and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . and for going out with my friends. This strategy can build trust in the negotiation process itself. a sixteen-year-old who lives with her parents and three younger sisters. baby-sit your sisters. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. Shari: Well. not on what you want to spend. what else can I do. It will cost me more than $10—about $35 per week. (2) a later curfew.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. wash the cars. Once you both agree on the list of things to be negotiated. You can’t treat me the same! Mother: Well—so we’re talking about several issues. your little sisters will want equal treatment. Example 1 Shari. cut the grass. and ask the other party to add to the list. Mother: But your allowance is based on what you earn in your weekly chores. Shari: I’m four years older than the next-oldest. Mother: That’s a large increase—and we just raised it last year! Shari: Well. (3) more chores. not just an allowance increase! There is: (1) a $10 increase. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. I need more money for clothes and CDs. has asked her mother for a $10/week increase in her allowance. if I give you an increase. 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.
while the mother won a Saturday house-cleaning and a night out each week. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). The union’s chief negotiator. opens by proposing the list of items. since all of their items were included as requested. if you agree to our proposals on item #3 (the paid vacation schedule). was avoided. while your Dad and I go out. item #11 (the clothing allowance). Then a “win-win” solution could be determined.Shari: Right! Mother: So … I suggest no allowance increase. An allowance increase. in the first session. you get to stay out an hour later that night. I’ll pay you $10 to babysit every Wednesday night. Management agrees. And if you clean the whole house on Saturday. and item #23 (the wellness program voucher). Now we have a package deal to propose … Preparation 27 . but unlike your sisters. which the other children would have requested as well. Now it is time for each side to list their desired outcome for each item. Shari got the $10 she wanted and a later curfew. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. The trading of items (where initial demands are discussed and agreed upon) begins. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands.
other trade-offs are proposed and agreed to until only a few items remain. thus removing them from the discussion table. Then negotiations can resume on the remaining 43 items.Conclusion In most labor negotiations. 28 50 Practical Negotiation Tactics . the two sides will at this point sign and date the list of proposed items.
time of day. and do your homework. One day. just out of curiosity. Bob followed the man home. which turned out to be only a few blocks from his own house. he noticed a FOR SALE sign in the yard. but money doesn’t mean anything to me at this point in my life … Well. he saw an elderly man get in his dream car and drive away. (For the next three years. Bob made it a point about once a month to go out of his way and drive by the man’s house. Not even for. as he left the supermarket. I love this car—restored it myself. my name is Bob Hillard. day. He stopped and knocked on the door. It was nice meeting you. I live a few blocks from here. say. on Briarwood Road. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. That’s a generous offer. Prepare carefully.Tactic 6: Timing Is Everything The exact month. $12. thanks. Would you possibly be interested in selling it? No. and general circumstances under which negotiations take place can substantially impact the outcome. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello.) Preparation 29 . As the man got out of his car. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years.000? No. One day. The external pressures put on the parties involved (which might not be related to the issues under negotiation) can sometimes be used to advantage if you know about them.
for tax reasons. Then it’s a deal? Yes. Example 2 It was Sunday. A third vote at 3:00 p. Can you come back on Monday at 10:00 a. resulted in another 6-6 30 50 Practical Negotiation Tactics . The board members had met twice before. the proposal would die at midnight. 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. had issued a deadline of December 31st. The partner organization.m. (after a careful inspection) It’s a very nice car! I’ll give you $12. beyond which the project would have to be abandoned. Well. Can I see it? Sure. that’s a fair price. I’m moving to California to live with my daughter.m. as a matter of fact.000. if a seventh vote could not be found by the pro-agreement side. I can’t take it with me. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. and I promise to take good care of it. Follow me. A majority was needed to pass the partnership agreement. Conclusion While Bob did not achieve his goal during his first negotiation effort. to seal the agreement at the courthouse? Sure.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. so I guess I will be selling it. I’ll see you on Monday. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. and the vote was a 6-6 tie each time. December 31st.
deadlock. For weeks. in the end. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage.. At 5:30 p. timing was everything.. Preparation 31 . the pro-project leader told his members to filibuster until he gave a signal and called for another vote. A member of the pro-project group quickly called for a vote after the leader gave a signal. That effort failed. He planned for it accordingly. and the meeting was adjourned..m. during an hour break in the meeting. a member of the anti-project group left the room. the project had been stalled by 6–6 votes. and it worked. as predicted.m. When the meeting resumed at 4:00 p. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.m. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years.m. Both sides caucused: The leaders on each side met to negotiate a compromise. The measure passed 6–5 at 5:45 p.. Then.
This page intentionally left blank .
Some of the tactics listed in this book are only suitable for single-session negotiations. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). for example. Be sure you are aware of this at the beginning.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. if you want to begin in a friendly. Third parties sometimes have their own hidden agendas. or one-time-only. such as a third-party negotiator. After you have evaluated these factors. such as a buyer and a seller or a city and its union. For example. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . Identify all outside influences and hidden agendas before you develop your strategy. you must first evaluate your needs and those of your opponent. Tactic #43 (Nickel and Diming). Before you can do this. as well as their bargaining history and financial and political positions. If you prefer to take a firm and direct approach. such as Tactic #19 (Make a First and Best Offer). might step in and help settle negotiations between a union and administration negotiators. Tactic #33 (Bluff). A neutral. Are there any outside people who might influence the process. decide whether the negotiations should be continuous. or someone’s colleague or spouse? Third parties such as other buyers or governmental agencies might have to approve the agreement before it becomes final. but in practice it will likely influence the whole process. and Tactic #48 (Walk Away). uncaring approach (Tactic #9: Control Your Emotions. The overall strategy chosen does not limit the use of other tactics. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. as it can substantially alter the negotiations between two primary parties. cooperative manner. In some cases. Tactic #12: Find Common Interests can be helpful. 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. a third party can serve as a mediator (a legislative body.
His teenage sons had “trashed” the house. The agent explained that the seller was desperate. Weeks later. let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). two people on the team will be more successful because they evoke different emotions from the other side.” The agent took the offer to the seller. and the buyer was able to completely renovate the house and still have a great deal. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). The buyer said he wasn’t interested.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. For example. By assuming opposing roles. The desperate owner agreed. The buyer loved the location. 34 50 Practical Negotiation Tactics . half-serious. If there is a significant weakness in your position. I offer half the asking price. “Please make any offer—they are motivated!” The buyer responded. with “All right. but the inside was a complete turnoff. the seller’s agent called the buyer about the property.
Planning a Strategy 35 . so think this through well ahead of time. If you consider the demand ridiculous. After all. six years ago you bought it for $60. it is likely that your opponent will.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. but not so high as to end the negotiations before they begin. Buyer: The air conditioning might have increased the value of the house. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Finally. Be realistic. as well. We also think that the neighborhood has improved over the last few years. It’s a good neighborhood.000. and then look at the demand from your opponent’s perspective. Surely there’s some flexibility in your asking price. but quite frankly.000. And I don’t see a lot of difference in the neighborhood. your request must not be so low that the other party concludes that you are not negotiating in good faith. so do not underestimate what you might be able to achieve. we think $160. and just refuses to reduce it. one buyer shows some interest. Your demand should be high enough to give you room to compromise. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. Carol: We really want to sell. She has had it on and off the market for the last five years. The market hasn’t gone up that much in six years. Carol: Maybe not. Buyer: We really like the house. but the redecorating is of little value.000. Anyone buying the house would want to change wall colors or add new carpets. but we simply can’t take less than $160. but the house has increased in value. First.000 is very high. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Carol wants $160. However. but certainly not exceptional in any way. Each time. with no success. You are not likely to get more than you request.
We’re curious. or she has unreal expectations. 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. Here’s how the initial negotiations went: Partners: Well. but they have no idea what the value of their firm’s name might be in this nearby city.Buyer: What if we offered you $100. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. the buyer took it as a signal that either Carol didn’t want to sell.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. 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. In any event. the founders of the firm. The other law firm was prepared to pay $100. Inquiries to other law firms were not very helpful because in almost all of the instances. Carol drove off a potential buyer by setting an asking price that was just too high. were still alive. we are certainly interested in your request to “buy” our firm name to use in your city. though. Neither Edward Bits nor Edmund Bites. and then $10. enjoying a statewide reputation for quality representation. The partners are interested in selling the name. 36 50 Practical Negotiation Tactics .000 immediately. as to how you think the name is going to benefit you. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.000? Carol: We really can’t take less than $160. When Carol refused to budge.000 offer by coming down in price at least a little.000. Example 2 The law firm of Bits & Bites was a Sioux City institution.
we reserve the right to withdraw our permission. Give us some range.000 initially. Thanks so much for meeting with me. starting with the ten partners you describe. then. we want $500. What number were you thinking about? Well. (surprised) Well. (concerned about loosing the opportunity) Wait. it would be impossible to create a new name out of the names of our key partners. you have a very solid reputation there. of course. one of these two attorneys carries the surname of the firm they are leaving. I really don’t feel comfortable doing that now. I’m kind of embarrassed now. that you anticipate to build a very profitable law firm. Using the Bits & Bites name can only enhance our profitability. Well. that’s just our initial figure. We probably won’t be insulted. And even though you don’t have an office in our city. we do.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. So. and then 10% of your profits each year for as long as you use the name. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . Yes. that is a very high number. because we were not even close to that number. In every instance. expect to pay for that. And we. Let’s just pretend this didn’t happen. If at any time we feel that you have “harmed” our name. 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. To offer it now would be an insult. We should assume. but we get to keep all of the money we’ve received up to that point. We weren’t really thinking about that amount of money.
38 50 Practical Negotiation Tactics . Bits and Bites should have let the prospective firm make the first offer. Either side could have asked for too much. It immediately dropped the idea. Both parties were probably at a disadvantage. since they had initiated the contact. because there was no “objective” criteria available to help them set a reasonable price. The price they were willing to pay would have indicated what the naming rights were worth.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. In this situation. rather than negotiate.
Peggy: I assumed they went with the mower. so I’ll take it. Peggy: So. etc. Peggy. Andy: No. not for $1. I can use them. Andy: No.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Andy and Paula: Yes. Andy and Paula. and I know how you take care of things. angry. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support.200! We should get $1. I don’t know what the deal is now. They cost about $300. And take the leaf-catcher attachment and the gas can. Half what it cost us new. I heard that you want to sell your riding mower. only three years ago. since they are sitting out in the driveway with it. Peggy: I’m hearing one thing from Paula and another from Andy. Example 1 So. Peggy: That’s fair. while another acts difficult. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. you’re really moving! I hate to see you leave. threatening. Andy: I want them… Paula: Go ahead and take them. (bad guy) and implies that his or her side will hold firm on their demands. I want to keep those. we won’t need it at the new condo. Peggy: Planning a Strategy 39 . what’s your price? Andy: $1. Paula: Go ahead and ride it home. I’ll go home and you can call me if you two can reach an agreement.200.400 if the catcher and can are included.
and your training programs. She very wisely recognized the routine and forced Andy and Paula to give her a clear. perhaps even unintentionally. Let’s talk. your rate of $3. And we need to add a clause that holds your company responsible for machine damages. Liz: But we still want to renew your contract. 40 50 Practical Negotiation Tactics .200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. your account has taken too much time. She realized that it put her in an impossible negotiating position.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. You are located outside our primary service area. Miguel: Well. the quality of the technicians’ work. firm offer if they decided to continue negotiations. For the past three years. we’re here to negotiate a new service agreement. Sandy. Miguel: But not at this ridiculous rate. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm).000 per month is one of the highest in town. Sandy: What? First of all. Miguel: I’ve figured $4. We estimated that it has cost us more than $50. we’ve been fairly happy with your responsiveness. causing our reps to spend hours on the road.000 in service calls last year alone because your damn people don’t take care of the equipment. And cut the training hours from 55 to 20. Sandy. And we want to change the 24-hour service response time to 48 hours.
Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. Any luck. these terms will put me out of business—I’m a small 20-person operation.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Sandy. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. If not. I’m going on to lunch. I’m afraid our relationship is over.m. but Miguel’s right. I’ll stop back about 2:00 p. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. I’ll explain on the way back to the office. Miguel! We’ve worked out a deal I think you can live with. I hope you can meet my terms. with a position he knew was unreasonable. you two? Good news. I want to keep you as a customer. Sandy. Our customer base has grown. Planning a Strategy 41 . (Three hours later) I’m back. Sandy. even though it was far above the previous contract. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Liz.
So. I have a problem with my recent bill and my billing rate.Tactic 9: Control Your Emotions Stay cool. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. 42 50 Practical Negotiation Tactics . he was very unhappy. He decided that the best approach was to act indignant when he spoke to the company representative. 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. I noticed this. It seems that the rate you are charging me on my home phone is $1. and might even harden your opponent into an unfavorable position (for you or for both of you). made some very good purchase decisions for his small business. How may I help you? Hello. The fault was partly his because he did not stay on top of changes. This will put you at a distinct disadvantage from this point on.10 a minute rate at my office location. such as deals on computer packages and phone services. but I recently was sold a $. He had.00 a minute. 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. 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. in fact. because we have had a sick relative out of town and we used long distance a lot this past month. 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. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer.
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: Customer representative: Mike: Customer representative: Planning a Strategy 43 . (beginning to sound irritated. I realize that that might be the rate I started paying when I first took your service over eight years ago. we certainly would have discussed your options. It hasn’t been increased at any time.10 per minute rate on your long-distance service. Well. Mike.I expected the bill to be higher than usual. But as a very good customer of yours. how would anyone who might only have residential service even know to ask? Well. and I also realize that if I had examined my bill closely. but this was quite a shock. Had you brought this to our attention before. Customer representative: Let me pull up your account. I would have known I was paying too much. to begin now. But I am able to offer you a $. 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. I see that the rate you are being charged is the rate we offer for the type of service you have with us. of course it is not always possible to give existing customers some of the “offers” we have out.
I am. If you can’t get me someone to talk to. strategic anger and abusive behavior. she kept Mike as a residential customer as well as a business customer. He was walking a thin line. and I should be treated with more respect! I’m sorry. Mike’s willingness to show a measured “flare of temper” brought results. We certainly don’t want to lose you as a customer. 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 $. after all. The best we can do is fix the rate for the future.Mike: I would imagine so. but I am very angry with Over-the-Air Company. Wait—I’ll get my supervisor. between controlled. which should rightly be $50. however. I … (interrupting and in a stern. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. In doing so. controlled voice) I need to talk to someone who can do it immediately. 44 50 Practical Negotiation Tactics .10 per minute. But I’m looking at a $500 longdistance bill. I would hope that you would credit my account for this better rate for past service. a long-time customer of your company. and I want to speak to someone in authority so I can terminate my service. The latter would not have produced the desired results. either. but I can’t do that. (with a much angrier tone) Madam. there’s no reason for this conversation to continue. don’t think this is directed at you personally.
The employees’ negotiator finally decided to use “indignation” to break the stalemate. and that they should be asking for a fairer base wage for the work they do for you. that’s just not fair. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. I’ve got to have the employees with the most experience to protect this place. lesssenior employees might be at greater risk of injury because they have to handle explosives. The owner told the employees that he was worried that during the overtime shifts. 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. and you just can’t be too careful. 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.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. Owner: Now. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. and it’s not what we’re even talking about. They will be putting the plant AND their fellow workers at risk by not being here. they would become dissatisfied with their pay and want their base pay increased. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . and it’s getting old. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Working with fireworks is working with explosives. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks.
or they’re not. 46 50 Practical Negotiation Tactics . but not all? Conclusion The owner was on shaky ground with this one. After the employees’ negotiator threatened to walk out. sit down. not at all. he became more reasonable. That’s all. What if we were to agree that the senior employees could refuse half of the overtime offered to them. either the employees are properly trained. The negotiator was also running a risk with his flare of temper. or they’re not. the negotiator would have had to find a way back into the negotiations without losing ground.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. Had the owner let him leave. though. now. You are not addressing the real issue for you: money.) Now. (He begins to walk out. But the fireworks business is a business that involves risk. The safety of the plant demands it! (standing up to leave) This is just ridiculous. All I’m saying is that the most-senior employees have to be on the overtime shifts. No one who takes a job with us can be unaware of that. most of them continued to take all the overtime they could get. don’t be so hasty. In practice. Either they are properly protected. Until you’re ready to talk about that. But we protect our people. The end result was that the most-senior employees did win the right to refuse overtime. Sit down. Then you can’t have it both ways. I’m not coming back.
has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. and split the proceeds. you’re the oldest. I’m willing to pay or let it go for $800. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). 2) They can flip a coin.” is the recommendation of Howard Raiffa. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. so you set a price at which you agree to buy or sell the coffee grinder. Mike: Mary Anne. 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. called the “Reciprocal Buy-Sell Offer. a well-known negotiations professor from Harvard University. 3) They can agree to sell the object to a third party. with the highest bidder paying the amount to the other side in compensation for their loss. All the rest of the estate has been divided among the family. I’ll give you 48 hours to decide the price. Then Susan. A fourth option. Planning a Strategy 47 . Susan. Both sisters covet it. The second party then decides to either buy it at that price and pay the first party. (two days later) Mary Anne: Well. the executor of the estate. with winner taking all.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. However. since this one is in perfect shape and it was Mother’s. Mike. The first party decides on a price for which he or she will either buy or sell the object to the second party.
to submit a sealed offer to buy/sell the business sixty days from today. Lectures on Negotiation Analysis. They accepted his suggestion to use the “reciprocal buy-sell strategy. You will both agree. in writing. Thanks for making this last step as easy as possible. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. I’ll pick it up tonight. Both came to Raiffa to help negotiate a settlement. After I open the bids. Both sisters felt that the process enabled them to resolve the issue fairly.Susan: Mike: Well. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). (sixty days later) 48 50 Practical Negotiation Tactics . Two business partners had been working together for ten years to build a successful business. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. They thus were able to determine the highest price each was willing to pay for it or receive for it. and then decide how much more “emotional value” it held.” Howard: Since in this case you are talking about a multi-million-dollar business. Here is my check for $800. which will bind us to the outcome. I choose to buy it. I suggest a slight modification to the process. 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.
your bid is $170 million. you agree to sell your half-interest to Bobby for $180 million. Agreed. Conclusion Both parties wanted to keep the business. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. your bid is $190 million. Abe. but only if they could become the sole owner. Bobby. I will arrange to sell him my half-interest for $180 million. and to close within ninety days. and both men had carefully estimated the market value of half the business. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. Bobby was willing to pay more than Abe to remain sole owner. and we close by July 1st.Howard: Abe: Bobby: Abe. And I will arrange financing to pay you $180 million to become sole owner. Planning a Strategy 49 .
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.” but there were substantial differences in price—differences that the wife did not see as a problem. the one that was the most expensive was superior. Conclusion The husband became the “expert” in this situation by doing the homework. and created a spreadsheet to compare the five best-rated couches on their list. and forcing him or her to control the discussion of the issue.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. This strategy worked. Based on seating capacity. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . the one he wanted (one of the least-expensive) was superior. he decided upon a strategy: First establish himself as the “dimension expert. and the husband felt like he saved them hundreds of dollars. It can also work in reverse: establishing the other person as the expert. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. Looking at these statistics. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. When he showed his wife the detailed spreadsheet. When it came to comfort. The husband found the dimensions of the couches in the brochures and Web sites. she glanced at it and immediately deferred to his opinion.” and then argue for the frugal alternative. The couple decided to limit their selection to those rated “excellent. He thus ended up having greater negotiating power. They both expressed an interest in finding a couch that offered the most “interior” space. This approach can also be reversed: The wife in this situation is a banker.
he argues that she is the expert. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. 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. and Point of Service (POS) plans.” If you spend many hours learning about Health Maintenance Organizations (HMOs).investment decision or deal with an error in a bill. you gain an edge when negotiating a new plan for your company. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are.
The boys quickly huddled. Be clear on what you have in common at the start. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. point them out at the very beginning of negotiations and refer to them throughout the process. I missed dessert the other night because I had to get to baseball practice. you both want to complete negotiations by a certain date. she decided to try something different. I wouldn’t care so much. Usually. you want to reach an agreement that is favorable to an outside party. If this was chocolate icing. and neither boy was very happy. Unless you can convince me otherwise. the last piece of cake will get thrown away. Russ: 52 50 Practical Negotiation Tactics . they saw that there was one piece of cake left over from their mom’s bridge party. That simply rewards your continual squabbling. she made them share whatever it was. because I am so conscientious about my paper route. and so on. The two boys fought over the last piece of everything. here’s what they said to her: I think I should be rewarded with the piece of cake. particularly when things seem to be at a standstill. These positive things are part of your goals and objectives. I also took out the garbage last week without being asked twice. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. like we usually have. and I really love the banana/butternut/ sour cream frosting on this cake.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. When they boys returned. and then asked their mom for a chance to negotiate with each other. neither of you want to be embarrassed at the outcome. They immediately began to fight over it. This time. and their mother was tired of it.
This cake is white cake. That sounds like a wonderful solution. so these hours worked out well. We really want you to go back to your original times. Planning a Strategy 53 . The last cake we had was chocolate cake. and I really like white cake. and that’s not my favorite either. Marilyn originally set her shop’s hours for 10:00 a.m. Conclusion Once the boys realized that they had a common interest—not letting the cake get thrown away—they were able to negotiate a solution both of them could live with. I can have the part with the icing and Bill can have the part with the cake and filling. she opens her shop at 7:30 a. she got a visit from some of the residents. Customers have started to park in nearby apartment lots. because there is no parking along the street during morning and evening rush hours. and better than a fast-food restaurant with late-night hours and a drive-through window. I helped with the bags without being asked twice. to 3:00 p. and her children were in school. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. and keeps it open longer so she can attract customers on their way to and from work. so that your customers can park on the street. One day. Residents: Marilyn. We realized that if we cut the cake lengthwise.m. Now that her children are in college. your new shop hours have caused your customers to park in our parking spaces.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.m. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. It was the type of shop the nearby residents preferred.
.I’m sorry this is happening.m.. Can’t you post signs that tell non-residents not to park in the lots? Residents: The problem is that for the signs to be very effective. and is probably empty in the afternoon if they haven’t gotten home yet.m.m. Marilyn: Conclusion Marilyn needed the extra parking. And we don’t think you want your customers’ cars towed. and 9:00 a. 54 50 Practical Negotiation Tactics .m. and 6:00 p. We think they’ll be agreeable to the morning parking. But I really am increasing my sales by being open longer hours. It is very costly to have cars towed.? Residents: We certainly want you to stay in business here. Do you? Marilyn: No.00 a. if residents haven’t left for work yet.m. my customers can’t park on the street. If you need to have the shop open more hours.m. and see if it works. I have to convince them to come before work. Identifying their shared interests caused the nearby residents and the customers to reach agreement. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a. and usually the car is gone by the time a tow truck shows up anyway. and between 4:00 p. The shared parking arrangement did work out for Marilyn. Between 7:30 a.m. let’s see what the options are. and I close at 4:00 p. the off-street lots probably won’t be used by my customers. The parking lot used for apartment residents is probably full from 7:30– 9. and the residents needed Marilyn’s shop. Most of our residents are gone by 8:00 a. then we’ll try and accommodate you. if I go ahead and open the shop at 7:30 a.m. and 9:00 a. But in order to keep my new customers. rather than after work. we have to be willing to tow the cars that violate it. I don’t think that would be very good for business.m.. I really need that extra income to stay in business. Lets try it. Okay. So.m. or so anyway.
Then we can sit down at this table at 3:00 p. A deadline can help you make the best possible agreement in the shortest amount of time. Example 1 Four adult children have gathered at the home of their recently deceased mother. the first.m. I don’t.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. 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). Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. let’s all take two hours to look around and make a list of things we might want. how should we go about dividing up the furniture and possessions? I can’t talk about it. we can each take turns selecting things … Like each tool or dish. That will take days! I haven’t been in this house for twelve years. one at a time: the youngest. But at Planning a Strategy 55 . A few hours? I can’t—I’ve got to leave shortly for the drive home. Well. We just don’t have the time … We’ve got to do this—the house is sold! Okay. let’s all take a few hours to look around. etc. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. How can I do that? You all live in this town and you know this house. and start choosing things. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately.
Allan: Let me confer with the city attorneys. this is December 29. we all leave. 56 50 Practical Negotiation Tactics . your attorneys know the tax laws. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight..m. All of us must come back before Saturday to take what is ours—agreed? Okay.Sue: Mary: Jenny: 5:00 p. if we are not finished. Sue. David: I understand your concern. and I appreciate your interest in the historic structure. 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. can sell or give away what is left. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. Example 2 Allan: As the negotiating team for the city. And besides. Agreed. Okay. However. if I cannot carry a negotiated and signed deal to my board by noon on December 31. December 31. being the oldest.
He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Planning a Strategy 57 . Let’s continue.) I understand the December 31 deadline.Allan: (One hour later. Conclusion Knowing the external deadline gave David a significant negotiating edge. we can’t get the reports we wanted in 48 hours. and I don’t like it. Obviously.
Then the teacher went back to the first one. but I have a problem in my Spanish class. One day mine disappeared. as well as strengths. I’ll need to buy it again. and this usually means having all the right information. and I missed some assignments. Jason: Mom. before your opponent tries to catch you off-guard. We had one at the beginning of the semester that we were using pretty often. His mother disapproves of his study habits. first-quarter grades are coming out at the end of the week. 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. Did you buy it? Jason: Yes. don’t get mad. 58 50 Practical Negotiation Tactics . but that was actually a different workbook. I bought the second one. while watching TV. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. He knows that a D will mean that he will have to change the way he studies. Mom: All right. But don’t lose it again. Mom: What’s that? Jason: A few weeks ago I lost my workbook. The objective is to negotiate from a position of strength. He decided to preempt the discussion in order to make the best deal. so he was able to prevail upon her to let him continue. There will be times during a negotiation when you will want to catch your opponent off-guard. Control the use of the information. and you can neutralize its effect on the negotiations. Mom: I gave you money to buy a workbook a few weeks ago. Unfortunately. I’ll give you money for it. and we used it a couple of times. as well as those of the other side. but remember that both sides have weaknesses. Now. and one of the ways to do that is to reveal a weakness at the beginning. but his grades are good. Have a clear goal in mind AND all the information you need to make your points. we need to talk.
so there’s no reason to think I need to change my study habits. But that Spanish grade needs to come up to a B!! Jason: Okay. she trusted it more. and the D is directly related to my losing the book. I’ll give you more time. Environmental Science. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. Mom: Well. Mom: Well. but I think you do need to change your study habits. I think I can do that. I don’t think you’re taking your schoolwork seriously enough. If I don’t pull the D up to a C or better. Since I missed some assignments. and since he offered her the information up front. English. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. Although his Spanish grade was only a C+. 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. And those are hard classes—Algebra. All of my other classes are A. but all three deals Planning a Strategy 59 . And I know I have to be better about getting in all of my assignments. B. Its owners found out that at least three other buyers had been in contact with Jane. then I’ll agree to make changes. Pizza Boy was interested and had even made inquiries about the property. Conclusion All of Jason’s grades did improve over the next quarter.Jason: Another thing. It’s because I didn’t have the book. my study habits are okay. His explanation made sense. The location was ideal for a convenience store or a fast-food restaurant. Obviously. I’m sorry. all right. he was able to continue to study the way he wanted to. Example 2 Jane once owned a piece of property she wanted very much to sell. The work I did turn in was fine.(maybe C+). Thanks. Mom. or borderline B. Jason: Spanish is just one class.
Pizza Boy was prepared for her call. however. she will want you to think it’s the whole neighborhood. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. Actually. What are you asking for the property? Conclusion Jane told them her asking price. there were no unpleasant surprises to stop the deal. They decided not to fight a disgruntled neighbor. and it’s zoned for commercial use. 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. Pizza Boy: Well. she started her campaign to keep them from closing the deal. When the neighbor heard about the new buyer. Furthermore. What are her grounds for complaining? Jane: She doesn’t have any. I think you’ll find that this is only one person. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. let’s assume that you are right. This is how the negotiations went: Jane: Pizza Boy. Pizza Boy: We’ve checked the property out. it’s only the neighbor to the right of the property who has a problem. and was able to politely ignore her. which was way below the price they were actually willing to pay. though. I’m very happy you’re interested in my property. I’m sure. since they were well aware of the negatives. I know.had fallen through. Pizza Boy: Well. really. either. 60 50 Practical Negotiation Tactics . You are a big enough corporation to withstand her objections. But unlike your company. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. Jane: Oh. A tentative deal was signed. The real problem. the other interested buyers already have businesses in the neighborhood. we’re not interested in neighborhood fights. When she contacts you.
None is as important as the first one. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party.750) Target Point ($24. Carrell and Christina Heavrin.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.000) Target Point ($23.750–$25.000 Buyer Initial Offer ($21.000 22 23 24 25 26 27 Initial Offer $28. (2004). Exchanging Initial Offers 61 . such as proposing to continue at the current rate or price. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Another common strategy is to start with the status quo. 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.500) M $21. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). 2: Distributive Bargaining Process. by Michael R.000) Settlement Range ($22.500) Fig. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. quick agreement. as illustrated in the following figure: Seller Resistance Point ($22. “Distributive” bargaining (“win-lose” or “zero sum”) is used. 190–192. This is a practical starting point that will not anger the other side (and might even be expected). for example. The negotiator firmly states that it is their best offer in an attempt to gain a nice. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party.500) Resistance Point ($25.
When the two parties agree to a price within the range.In this example. the other side does not agree to this value). it is termed the settlement point – not the “right price” or “fair price. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. the process quickly narrows to the range between the initial offers. 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. these points have set the outer limits. and is the range in which most negotiations actually occur. each initial offer ($21. 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. A target point is the desired settlement value a party has set as a goal when negotiations begin. See Tactic #18: Agree on Something As Soon As You Can.” but the settlement price. thus starting out on a positive note.000. if the buyer’s initial offer was $25.000 and $28. The settlement range is the distance between the resistance points. usually. 62 50 Practical Negotiation Tactics . thus producing a true “win-win” negotiation. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. After initial offers are exchanged. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package.000) is reasonable. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. 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). In the example. 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 negotiations got out of hand when Shelly’s dad forgot what had been decided. Her mom and dad had already talked about it privately.–10:00 p. make use of the opportunity to call for a caucus. To do so in front of your opponent would obviously undermine your team’s position in the negotiations.Tactic 15: Caucus If you are part of a negotiating team. 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. Example 1 Shelly’s “Sweet Sixteen” party was coming up. so we’ll have the party from 7:00 p. because it might disturb the neighbors. without revealing their ideas to the other side. If negotiations seem stalled. or if a member takes on a role in the negotiations that has not been assigned to them. If the negotiations are heated. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. A caucus gives you an opportunity to work out problems with your own team in private. and presumably had an agreement. You can invite up to 20 of your friends. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. There are many ways to use this strategy. We’ll just have chips and soda. a caucus can be used as a break to calm the situation down. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . We don’t want it to be a late evening.m. Mom: We’re planning on having your party here on Saturday night. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. Unfortunately. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. If the team is feeling pressure to concede on certain items. so her parents sat down with their daughter to discuss the details. and I already have 25 names.m. If the negotiations have suddenly gone in an unanticipated direction. Shelly. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations.
I guess the VFW will work. I think we can handle a few more kids—how about 35? And midnight sounds okay. I think the band would be fine. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . That sounds like too many for here at the house. Shelly.m. we need to talk. Time out! Dad. (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. Dad. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches.” They would never expect a party to end before midnight. (excited) That would be so cool. We’ll get a band—everyone does.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. (with some irritation) I’m not sure. we could rent the VFW hall. In fact. And midnight is definitely too late. Jerry from down the street is in a really good band that all of the crowd likes. we’ll call you when we’re ready. That would be great! It would keep everyone entertained. Oh. We could play records and you guys could dance. Mom! This is my “Sweet Sixteen” party. It’s special!!! Well. okay.—that’s so “baby. I’m sure we can ask them to tone it down a little. alone. And they can’t go home at 10:00 p. (During the caucus. Your dad and I already talked about this and agreed that 20 guests would be the limit. Actually.
please!! 11:00 p. But we can have the band. A DJ? I guess that’s okay. we’re going to rent the VFW hall. causing them to lose control and make compromises they hadn’t intended to make. Agreed. and you can invite more friends. can’t we? No band. All right. and not a huge production. That’s so lame. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective.) Okay. Example 2 The contract negotiations between the company and the union had been going on for days.m. we will be better able to chaperone. and we will need to approve the list.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . And we’re serving chips and sodas. but no Sweet Sixteen birthday party decorations. Dad. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. but your dad and I agree on getting a DJ to play.m. Your mom and I agree—11:00 p. midnight. But you are limited to 40.m. sorry. her mom presented the revised proposal. Does that mean no presents. That way. this mom-and-dad negotiating team became unglued during the negotiations. Okay. When they called Shelly back in. too? No way!! I want presents!! Conclusion In spite of their prior planning. to 11:00 p. is for little kids!! No.m. but we’ll schedule the party for 8:00 p.
many will want to use it for their children’s education. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. A lot of employees have spouses who can get health insurance coverage through their work. Union: (angrily) I’m not presenting this proposal to my people. The company’s negotiator didn’t recognize the misunderstanding. Union negotiator #2: Please—just a moment outside.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. 66 50 Practical Negotiation Tactics . Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. With the cost of college educations so high. it’s a good proposal. The union’s lead negotiator misunderstood the proposal. The tuition benefits will encourage the workers to be prepared for new job opportunities. Tuition in place of health insurances? They’ll think I’ve lost my mind. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. 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 the following conversation occurred. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. What is this.
the parties returned to the room.Union: Union: Company: Okay. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. and the parties were able to complete their negotiations. Now. Exchanging Initial Offers 67 . Good. I thought that the contract would cover one or the other for everyone. I think that what you’re proposing is a really good idea. we’ll be back in 5 minutes. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. let’s move on.) I’m sorry. Negotiator #1 regained his footing. and I apologize for explaining it poorly.
Mr. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . Here’s how it works: Party A exchanges the item for something of true value. it’s a great car and a fair deal. this conversation takes place: Hobbs: Yes. but … Salesman: But what? Hobbs: Well. Hobbs: Yes. you don’t want your opponent to know what these things are. you are making $200 profit over the true dealer’s cost. Example 1 The buyer. and noticed that none of the vehicles have a green exterior. when the two sides are only a few dollars apart. I know. It is a useful tactic in any negotiations. according to the Consumer Reports listing of the cost of the vehicle. A has gained something of true value and given up nothing he values in return. At a point late in the negotiations.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. but in reality. not revealing that the item exchanged is a “throwaway. But for this price. Salesman: Let me talk to my manager. so be sure you present them in a way that suggests importance. quickly checked the dealer’s inventory of sport utility vehicles in stock. but he makes a mental note to use color as a “throwaway” item. according to my figures. we’ve got expenses and we need to make some profit.” 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. Salesman: Well. Hobbs. I’ll go get him. He doesn’t really care about the color of the new vehicle. I can go to another dealer and get a green exterior—the color I like best. However.” Party B thinks that A has sacrificed one important objective to gain another.
. and seniority will be used to determine who gets to choose the first day.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Conclusion Mr. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I .. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). 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. Employees will be paid time-and-a half for each of these days. Miguel. At the very end of the negotiations. Then we have a deal. I’ll take the red one for $100 less. Example 2 The office supervisor told the three internal sales representatives (Jenny.no it’s not. The days in question are: Exchanging Initial Offers 69 . he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. Hobbs successfully chose color as a throwaway item. All three employees must agree to the schedule.. The three are sitting at a lunch table to discuss the schedule. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. The manager was convinced enough to sacrifice a final $100 for the throwaway.
She proposes to work five days. 31. 2 In the first round of negotiation. 30.November 25 (the day after Thanksgiving) December 23. January 1. December 26. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. They all agreed to their schedules. 24. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. 31 January 1. December 31 Miguel: November 25. 70 50 Practical Negotiation Tactics . but that is a secondary consideration. if they let her choose the two days she will be off and the five days she will work. January 2 None of the three are totally happy with the results. December 30. She got what she wanted by giving up something she did not value: the two other days. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. December 27. A second and third round produced the following allocation: Jenny: December 23. They have decided to start over. They agree. 26. 30. 2 Jenny: December 23. and each chooses their days to work: Carolyn: December 27. January 1 Carolyn: December 24. 27. 26 Miguel: November 25. She would actually prefer to work the extra days and get paid time-and-a half. each made a first choice of days they will work. This would allow Jenny and Miguel to each work only two days. in exchange for giving up earlier choices due to seniority. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26.
three ways. the antiques. were faced with the task of selling the house and disposing of their mom’s personal belongings. their mom left specific pieces of jewelry and art in the will to each of the girls.000.000 with no mortgage on it. and a collection of antique furniture. for example. For example. a house valued at $250. When the girls decided it was time to talk about the estate. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. The estate’s assets included a checking and savings account totaling $450. realizing that the total cost of a deal might make or break the agreement. Example 1 When their mother died at age 82. and the stock and distribute the proceeds. can indicate that something you think is minor is really a major concern to your opponent. but I’d like to talk about the house and the furniture. one might package all of the financial issues in one group and negotiate on that package as one issue. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. Autumn and Angela. Anne and her sisters. along with the cash. The house and much of the furniture has been in the Exchanging Initial Offers 71 . 300 shares of stock in a pharmaceutical company.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. they met at the house. Anne: As I see it. we need to sell the house. it is often helpful to package the items in distinct groups and then deal with each package separately. 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. 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.
I’d really be interested in talking a trade for some of them. and if we wait a couple of years. Autumn: Sounds good to me. What would you think about agreeing today to distribute the cash and stock three ways. she’s free to do so. and now that we have them. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. Angela: Now’s not a good time to sell either the stock or the house and antiques. Why don’t we leave some of the cash in the bank. It’s a buyer’s market now. but the operative word is “give. we’ll discuss again what happens to the house and the antiques. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . Soon. Frankly. Angela: I live close by. 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. So we agree: We’ll leave $30.family for years. and use it to fix the house up? Then when we make a decision. Mother was born here and grew up here. don’t you think? Angela: Maybe. it’s a magnet for vandals. If Angela wants to hold on to her stock. Anne: But that means we have to continue to take care of the house and its contents.000 in the bank and distribute the remainder three ways. so I will be able to keep tabs on it. If we want. With no one living here. Autumn: I think its awfully soon to be making these kinds of decisions.” She gave those things to us. we’re really free to do with them what we want. we can sell ours. There was a reason why she gave us what she did. Anne: Okay. and letting everything else wait for another discussion. We’ll split the stock three ways. I’d like to talk about the art works Mom left each of us. we will have a more valuable asset. In fact. we’d get a lot more for them. I’d like it all to stay in the family. And we’ll fix the house up.
what kind of paid leaves there will be (personal. tuition benefits.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. May I suggest that we divide the items into three areas. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). but I’m making no commitment to trade. Employees: We’ve got a lot of items to cover. Angela: That’s fine. and establishing a work schedule to accommodate evening and weekend clients. the jewelry. Several issues also needed to be addressed: the ability of employees to move up through the organization. funeral. health benefits. sick. The third: Ben- Exchanging Initial Offers 73 . the antiques.). The negotiations on the other items—the house. The second: working conditions (work schedules and promotional opportunities). The following tasks needed to be a accomplished: establishing basic pay schedules. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. vacation. Anne: Same with me. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. 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. including benefits for partners in non-traditional relationships. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. etc. deciding whether there would be annual wage increases as well as merit increases. and the art works—will be more difficult. and the assignment of the limited number of parking spaces.
Wages should not include merit pay raises. I think it also makes sense to include tuition benefits in the Working Conditions category. Later negotiations were difficult. Executive Director: I think it’s a good idea to group items together.efits (health insurance. but the parties were able to come to agreement because the wage issue had been resolved. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. that makes sense. So I’d like to see us get through the wage issues quickly and then move on. Let’s get started. because they’re really an incentive for better performance. Employees: Okay. I would include that under the Working Conditions category. but I’d change your list. 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. the paid leave categories are pretty clearly defined. to be honest with you. Also. Executive Director: Sounds like a good agenda. we are an agency supported generally by public funding. as well. and the parking spaces). paid leave times. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. 74 50 Practical Negotiation Tactics . Executive Director: Well. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. There is more flexibility to use non-public money sources to reward employees who will cover night or weekend hours or who qualify for merit increases. tuition benefits. Employees: I’m surprised that you would take merit increases out of a general discussion of wages.
no matter how insignificant. The couple hoped to do the divorce without involving lawyers in order to save money. Kathy borrowed more money to go to graduate school full-time. The discussion might become very heated. Kathy’s first job paid more than Tim’s because she had a graduate degree. They had also furnished their house on credit. Tim: You might be leaving town. with her promotion sending her out of town. rather than disposing of assets. Example 1 Tim and Kathy. Kathy was asked by her employer to relocate to another city. You signed those papers. It indicates to your opponent that you are a reasonable negotiator. Tim began working right after graduation. and might not even be able to keep the house. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. Their “property division” was mostly about dividing their debts. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. They met and married in college. and that you are entering into the negotiations with the intent to reach agreement. are divorcing. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. after a brief marriage. and both have good jobs. You can also make an effort to agree on something your opponent offers early in the negotiations. They have no children. Exchanging Initial Offers 75 . because Tim felt that Kathy had taken advantage of him during the marriage. Tim worried that he would be stuck with all of the debt. too.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. without suggesting any changes or modifications. They were in the middle of buying a house. Now. and she agreed. An initial agreement. It was her idea to buy the house and go into debt to furnish it. sets the stage for mutual respect and communication.
we decided to each pick out our “dream car” and that we would not overrule the other’s choice. The first thing I’d like to talk about is what we are going to do about the cars. Tim: Okay. about the house and furnishings. Kathy: Now. The monthly payments are about the same. Example 2 ABC Company. I think that makes sense. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. What do you want to do about them? Conclusion Having agreed to two items very quickly. an art gallery. Okay. and he could pay it in annual installments over a five-year period. 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. as long as the cost was approximately the same. hold on. When we bought them two years ago. as you remember. we would have paid down our school loans more. ABC usually uses UPS 76 50 Practical Negotiation Tactics . They also agreed that Tim wouldn’t have to pay her that amount for five years. Tim: Well. I got my convertible. a wholesale art dealer. Frankly. I think it only fair that I take over repayment of all the school loans.Kathy: Hey. Kathy: I suppose we should look at the school loans next. and XYZ Co. If both of us had been working the year I went to graduate school. I don’t intend to “stick” you with anything. yes. I can hardly argue with that.. 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. 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.
ABC refused to pay WeCanShipArt until it received payment from XYZ. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. and began preparing to return all of the artwork to ABC. and the boxes showed no external damage. when the boxes were opened on Monday. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. They arrived right before the holiday weekend began. There was no indication that the gallery’s electricity had gone out over the weekend. and arrived on time and apparently in good condition. and put the company on notice that it was not going to accept the order because the planned sale needed a dozen works of art to make it profitable. XYZ: ABC: Exchanging Initial Offers 77 . The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. XYZ decided to cancel the promotional sale that was to start on Wednesday. or else the box was damaged in XYZ’s warehouse. XYZ’s manager failed to open the boxes or remove the artworks. Unfortunately.to ship artwork. The other times this happened. and we will continue to discuss who is liable for the three water-damaged works. We’ll expect you to pay for the 12 works that will be in your show. ABC’s position was that the artwork was fine when it left their location. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. ABC: Before we begin. However. 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. but only if you let us ship it UPS. XYZ contacted ABC immediately. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. it was obvious that the art in one of the boxes had suffered considerable water damage. The artworks filled four boxes.
Having reached an amiable solution to the immediate problem.m. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. at its financial risk. ABC: Well. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. You can’t just ignore us. we’re ruined. And we’ll eat the cost of shipping. WeCanShipArt: Wait a minute. and if word gets out that you think it was. they will split the cost of the three damaged pieces three ways. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. The artwork was not damaged while in our control. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. If we don’t make the deadline. regardless of where the original three artworks were damaged.XYZ: Agreed. generated a like offer from WeCanShipArt and a reasonable response from XYZ. that’s okay with me if it’s okay with XYZ. 78 50 Practical Negotiation Tactics . Now. XYZ: Okay. They also agreed that if the investigations are not conclusive. I can’t see how I can refuse that.
but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. You must mean what you say and be prepared to walk away from an unacceptable offer.000 for it six years ago. and even more hours in the fall picking up leaves. I know you and Jeff said you’d like one because you have about five acres. I don’t have any idea.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. Example 1 Colleen: Ann. consider using the “First and Best” tactic. 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. we’ll sell it to you. What do you want for it? Colleen: Well. I don’t want to quibble. Exchanging Initial Offers 79 . Ann: Thanks! We really need one. Ann: That sounds great! I don’t want this to affect our friendship. no hard feelings either way. period. We plan to put an ad in the paper next week. but if you’re interested. we plan on selling our Ford tractor when we move. Jeff spends many hours mowing the yard every week. and it came with the bush hog and the leaf pick-up. Why don’t you give me a price? Colleen: Oh. 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. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. Ann: Well. The “first and best” tactic enabled them to settle the matter easily. Okay? No quibbling. we paid $5.
and I’ll take 48 hours to consider it. but I don’t want to start off in a new job by negotiating with my boss! So. who admired the way Archie negotiated his starting salary. I don’t like negotiating over salary either. I expect a fair increase. Okay? Vernon: That sounds good. but we have internal budget considerations and we must consider equity with other employees. I came up with the best salary offer I can make. except salary. We want you.Example 2 Archie: Well. 80 50 Practical Negotiation Tactics . I’ll get back to you in three days. So. and you know my current salary. I want the job. Conclusion Archie accepted the job offer. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. He also started the job with a positive working relationship with Vernon. Archie: Thanks. I think we have agreed to all aspects of the job offer. on this slip of paper. no questions asked. how about you making your first salary offer your best one. I’ll discuss it with my wife and get back to you in 48 hours. Here it is. (three days later) Vernon: Archie. as we agreed. I’ll either accept it or reject it.
Exchanging Initial Offers 81 . and we’ve made a lot of plans with our friends that I need to talk to you about. Example 1 Kevin. and in a favorable light.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. Kevin: Mom and Dad. Kevin had “negotiated” with his parents before. Present your position and demands as if yours is the only logical position. you know that Sally is really looking forward to this. Third. was dating a senior. and ignore or deny any weaknesses in it. a 4:00 a. He knew his parents would not agree to let him stay out all night.) During the posturing phase. 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. you will probably have to modify some of your positions if you are to reach agreement. but he figured “all night” was relative. since Sally is going away to college next year. He and his date had decided that as long as they could join their friends for breakfast after the prom. we’re not going to be dating exclusively after this summer.m.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. so he knew that he would have to sell them very quickly. Sally’s Senior Prom is coming up. look for indications from your opponent as to what he or she believes is their best position. Second. so the prom is a pretty big deal to both of us. you only have one Senior Prom in your life. I’m the only junior in the crowd. This is called posturing—presenting your position strongly and completely. (Once negotiations get underway. It might be your only opportunity to explain your position without interruption. then the prom. curfew would be okay. Fourth. First. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. we’re all meeting at Donna’s so we can share a limousine.m. 17 years old and a junior in high school. and then to breakfast at “Timothy’s. Posturing is indeed “acting. First we’re going to dinner.” As you know.
but to use that as a reason to stay overnight doesn’t make sense. of course. and we’re just not happy about that. From where we sit. so there will be plenty of chaperoning. And. the limousine will take us back to Donna’s house to spend the night. we’ll have to get in our car and drive home very early in the morning. We’ve heard that they allow kids to drink. 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. Donna’s parents will be there. I’ve never missed my curfew. we know. That’s asking us to believe a lot. happy about your plans to use a limousine so you kids aren’t driving. That’s the deal then? Okay.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. Finally. 82 50 Practical Negotiation Tactics . I don’t drink or do drugs.or drug-free. However. I know you trust me and that I’ve earned the trust. You make some good points. remember that when you started dating Sally and hanging out with an older crowd. but it should not be oversold. you have been fairly good about making your curfew—most of the time. Fifth. We think that after the breakfast. this prom is a one-night thing—a dance that is dressier than you’re used to. And if we don’t spend the night.m. which could be dangerous. We are. Things can happen on a night like that that adversely affect you for the rest of your life. So. We’re just not convinced that your entire group has been alcohol. and the crowd we hang with doesn’t either. Also. for sure. Sally’s parents trust us and have already said yes to her. I believe you can pay a little more and have the limousine bring you both home. yes. you and Sally need to call it a night (or really a morning). they will be open for the Prom crowd only. we told you that we would not be changing our rules to accommodate that older group. You realize that this could be as late as 4:00 a. but because the owner’s daughter goes to Sally’s school. Second. I think I ought to be able to stay out all night. Yes. Donna’s parents are not as strict as they could be when a bunch of you are there.
Tencro has approached the state’s Office for Business Incentives to see what. Tencro approached the state’s Economic Development Officer. we are one of the largest employers in this county. if anything. other companies have received incentives and Tencro certainly wants all it can get. one-floor operation would be very profitable. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. Also. and had this conversation: Tencro: We really want to keep our company here and expand it. The company approached other states to see what incentives they might offer Tencro to locate in their state. we’re of course interested in keeping you here. Example 2 Tencro Company decided to modernize and expand its business.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. our Exchanging Initial Offers 83 . and a new. Nevertheless. EDO: Well. the state can do to help the company expand and rebuild. Tencro: Let me just remind you of what our company means to this state. The assembly plant is out-of-date. It currently employs 800 people. We need to find out what you’re willing to do to keep us here. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. and it does not really need any help. With 800 employees. but it could easily add another 500 if it had the space on its assembly line. but we’re getting a lot of interest from other states willing to help us relocate. but was disappointed to learn that they offer very few incentives. we’d be adding at least 500 new jobs. regardless of the incentives. If we can expand here.m. but there are limited options available. The spin-off business from our operations is huge. Tencro is not going to leave the state. because his parents could not disagree with such wellthought-out ideas.
schools. paying taxes. EDO: Well. Also. We can’t possibly give it away to other companies coming in behind them. if the new location is at the local industrial park. EDO: The state has very limited resources to pay for economic development incentives. And we’ve been offered land practically free in the neighboring state. now that the economy has improved. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism.. and traffic signals. 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 need a rebate on the local income taxes to help pay off the loan to build our new building.employees pump money into the economy by buying houses and cars. We need help in the cost of attracting and training the new 500 employees. 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. Certainly. we will need the two-lane entrance expanded to four lanes. etc. while we value your company as a long-time corporate citizen. or else it will not be cost-effective for us to stay here. and we are willing to offer some training dollars for the new workers. so we’d have to have it free here. and we’ve had to divert funds from business incentive programs over to basic services. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. 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 84 50 Practical Negotiation Tactics . etc. additional police. And. That might involve the state building housing for them at a reduced cost and providing them with some retraining. We do want you to expand your plant. We need certain incentives.
EDO: Get back to us as soon as you can. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. and hired 500 new employees. 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. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. However. Other than that.agree that the road into the industrial park must be widened and a traffic light installed at our expense. Future negotiations continued. The new set-up was so profitable. the training and the new road improvements were all the incentives offered to Tencro. Exchanging Initial Offers 85 . Tencro bought land in the industrial park. Tencro: Well. borrowed money for the new building. Tencro was able to pay off the borrowed money in half the time. but for the fact that each party did its homework and was aware of the true facts.
000 and $337. think things through before you make or accept the first offer.000. never give them their asking price. but you feel cursed because you gave away too much. Jay: No. 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.000 for a house that sold for $185. and that two similar ones on the same street sold for $330.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. at minimum cost. 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. Their realtor told them that it sold for $290. because you have settled quickly.000. Sue: Let’s offer $325. of course. and houses in this area sell fast.” The perfect first offer. such as last year’s price. We don’t know how anxious they are to sell or if they know the market. offer $150. is the most (or least) the other side will accept.000—what they paid for it. 86 50 Practical Negotiation Tactics . Jay: No.000 this year.000 three years ago).000 two years ago. then $320. That’s a fair price. which can be very useful).. Avoid giving away too much at the outset. thus requiring greater concessions on both sides. before someone else does. Let’s low-ball them and offer $290. They found one they both like that lists for $325.e. 2) Start out with an old number. The sellers must be willing to come down a few thousand … Sue: Well.) To prevent this from happening.” (You have won a settlement. The other party will probably come back with an equally ridiculous offer.000. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. and you cannot withdraw it in good faith. particularly if you don’t know the other party’s “settlement range. or 3) Make an unrealistic offer (i.
That’s an insult! Jay: Well. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No.000. They outlined how they would develop a new employee performance-appraisal system. (the next day …) Jay: They made us a counteroffer of $307. they had offered $325.000 total. If. Both parties felt that they made a good deal. Lyle Foxworthy. Exchanging Initial Offers 87 . Give us your lowest price.) Bob: I’d do it for $3. then let them make a counteroffer. as Sue had first suggested. realizing they offered too much. the sellers obviously would have accepted and Jay and Sue. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Frank: Me too. I can’t tell our realtor $290. 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. (Bob and Frank meet privately to discuss the situation. was very impressed with their presentation.000 for each of us—$6. the company president.500—half the difference! Sue: Great. as requested by the human resource director. but who knows what they are planning on offering. The buyers were very motivated to sell. and the offer was based on fact: the prior negotiated price. Sue: Then you do it. since they had already bought another house.000.Sue: Don’t be crazy.
88 50 Practical Negotiation Tactics . I’m out of time.000) their minimum price of $6. We’ve waited long enough.000. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. but we know you must have an amount budgeted for this and we are willing to do it for that amount. and you two come highly recommended.) Lyle: Okay.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. and it would not apply.000. but we can’t pay more than $18. We’ll do the job. Bob: That’s fair. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. Lyle: Okay. What’s the cost? Bob: We want the job. They also ended up getting three times ($18. That is all that’s left in this year’s training budget.
Experienced negotiators seldom reveal their exact priorities and objectives. It has often been said that the key to negotiations is to be flexible (see Tactic #25). do not dismiss it because it is not all you want. Instead. carefully evaluate an opponent’s offer. In some negotiation situations. Expect that the “total pie” will be different from what it was at the outset. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. Skilled negotiators such as salespeople. in fact. seeing no common ground. and do not flatly reject it because it is not your offer. Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). 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. what appears to be an outer limit of the settlement range when the process starts can. but possibly of different values to your opponent. be enlarged (see Tactic #27: Expanding the Pie). which would most likely weaken their position (see Tactic #26: Keeping Secrets). is likely to pull away from the table. labor negotiators. When the other party makes an offer.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). One or more parts might be acceptable or indicate movement from their previous positions. which is often the case. Also. the other party. T Making Counteroffers (The “Give and Take”) 89 . because if you do not at least appear to be flexible. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. and attorneys use tried and true tactics in giving and receiving offers.
Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. Sydney. Proposing only one solution to a problem. except when you’re negotiating. His brother Sydney. and quicker. In mid-June. while it may be your best option. Example 1 Jerry. 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. Jerry had already started his summer job. 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. Here’s the discussion that followed: Mom: Well. 19. completed his first year of college and came home for the summer around the middle of May. their parents began discussing a family summer vacation. Proposing multiple ways to reach your goal can get you to the same place. Jerry will be here. Let’s see what we can work out. what say you. Dad: Wait a minute. Option 1: No family vacation. gives your opponent little maneuvering room and might even prolong or damage the negotiations. Jerry pointed out that he is expected to work until July 31st. so you can go without me. 15. Dad. The week he would be home would be the first week of school for Sydney. 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. finished his freshman year of high school at the beginning of June. it looks like we can’t really plan a vacation for all four of us. 90 50 Practical Negotiation Tactics . 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. We have four options. I don’t want to give up on a family vacation that quickly.
Sydney: Okay. but he can discharge employees for poor performance.Option 3: Mom. if it’s okay with Jerry. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. you have a half-day orientation on Wednesday. and Carl). Conclusion The goal was to have a family vacation. By proposing numerous options. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. It’s not perfect. And I miss orientation and start school the next day? Dad: That’s an option. Bob. Jerry: My friends and I have plans through Saturday of that week. Mom? Mom: Let’s do it. and Sydney go to South Carolina before his school starts. Joe has no say in who was hired by the corporate legal office to work in his unit. Andrea considers Making Counteroffers (The “Give and Take”) 91 . but it should work out all right. and one secretary in his litigation unit. so I won’t be able to meet up with you until Sunday. Classes don’t start until Friday. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. one paralegal. Sydney: Don’t I start school that week? I don’t want to miss school. we meet up with him that week for vacation. when we come home. actually. If we started the vacation on a Thursday. me. we could return home on Thursday and still get a week’s vacation. Mom: Well. Then Jerry joins us until Thursday. Jerry: Okay with me. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday.
Andrea: Well. and I don’t see why we don’t have more independence. Before you start. Joe: That’s all well and good. 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. isn’t it? But I don’t think just moving you really solves the problem. but it doesn’t solve the problem—nor is it the only problem. 92 50 Practical Negotiation Tactics . Her job performance was acceptable. however. Joe: Come on. and resents any attempt by Joe to supervise her work. Andrea: You didn’t list moving to another unit as an option. let me say that I’m handling the missed deadline on the pleading. It was just a comment. In the last month. Andrea. It is to the corporation’s benefit to address that problem here and now. you know that wasn’t an okay to settle. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. You had no authority to agree to settle the Stites case without clearing it with me. so Joe took a “hands off” approach. Andrea: We’re hired for our expertise. To put it as bluntly as I can. which forced Joe to take action. rather than to put it off on someone else or for some time in the future. Joe: That is certainly an option. you have a job-performance problem. we have a very big problem.herself to be a professional. I really see your options as follows: You can leave the corporation. Andrea: Wait Joe. or you can work out a “supervision” agreement with me so that I can better monitor your performance. The attorney for the other side has agreed to give me the additional time to file it. she made a two glaring errors in judgment. Joe: Andrea. 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. If you don’t like the way I do my job. We have a formal procedure that you just don’t like to follow.
improve her work performance. Andrea: Well. (Adapted from The Mind and The Heart of the Negotiator. Joe: That’s fine with me. lets talk to Bill about the move. But in fairness to our mutual employer. my goal is the same is yours: to create an environment where you can perform to your full potential. I want to stay with the firm. It also changed her attitude about being both a professional and a team player in a corporate office. the needs of the corporation have to come first. or I would advise your next supervisor to put you on a very formal approval program. If that option is okay with you. and propose an acceptable alternative. I hope we can work it out. by Leigh Thompson. then it would save face for me if it comes with a move to another unit. in fact. If you are convinced that I have to undertake an “approval” program. Andrea’s move and subsequent “approval” regime did. rather than my staying here.Joe: That could be an option.) Making Counteroffers (The “Give and Take”) 93 . Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. Believe it or not. but it would still require some change in the way you work: either a demotion.
Maureen: First. because it can speed up negotiations and produce a more desirable outcome. For example. With distributive items. It is used only when each side has several demands. if a buyer negotiates a $500 reduction of a contractor’s bill. let’s see if there are any items we both want. 94 50 Practical Negotiation Tactics . etc. 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. that’s $9.500. Let’s see. one person’s gain is another’s loss—zero-sum. then those which can be easily traded.) Yes. Example 1 Brooks and Maureen Wilson have just finished building a new home. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. Wow! We are off to a good start. 2) exchange items (those that can be easily traded off—one item for another item of equal value. and a home theatre. Let’s agree to those things. and finally. three strategies are used. These items often involve money).000. the fencing. Exchange. 3) distributive items (those items for which the two parties have exactly opposite interests. we both want the sod. 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). or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. They both agreed that this is the maximum they will spend on “extras” before moving in. This approach is an important tactic.). only those with polar-opposite interests that must be divided. Brooks: Right. thus making it necessary to find a middle ground on each. (She looks over the list. They have a fixed amount of money—$14. then the contractor has lost $500 in revenue.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. In essence.
500 $5.500 $2. I’ll trade your sidewalk and trees for my whirlpool bath.200 $200–$2. $750 for lighting and $750 in the bank. Making Counteroffers (The “Give and Take”) 95 . which takes another $3. These are all permanent immediate needs.000 $3.# 1 Sod Item Cost $1.500 left.000 $5.000 $500 $1. I’d like to spend some of it on lighting upgrades.000! Brooks: Good.000 $1. We have $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. Can we split it evenly? Brooks: Okay. and we both get things we want. Maureen: No.000 $2. that makes sense. which I’d like to keep in the bank.500 $500 $1.
both sides exchanged lists of initial demands at their first meeting. During that time. even in difficult years. Length of Contract 2. The combined lists total thirteen different items: Desired Outcome No. Profit-Sharing 5. Pension Increase 3. All items to be negotiated and their desired outcome for each item were put in writing for review. Wage Increase 4.Conclusion By taking the time to list all the items each person wanted and their cost estimates. This year. Drug-Testing Program 96 50 Practical Negotiation Tactics . 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. 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. 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). management and union negotiators found that a “winwin” approach to negotiations worked well. finally agreeing to split the difference on the remaining amount (distributive items).
6.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. No Strike/No Lockout 10. (#5) a new drug testing program. They proceeded to draft the language to settle these issues. Health Insurance Employees pay 20% Continue cur. Clothing Allowance Based on senior. First. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). Next. signed. Next. Overtime Assignment 8. Finally. eleven of the thirteen original issues to be negotiated had been agreed to. Paid Funeral Leave 9. and (#9) to continue the often-discussed no strike/no lockout provision. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Job Security 13. Shift Differential 11. Subcontracting 12. At this point. they began to trade off the exchange issues of similar value and nature.Distributive rent program co-pay Exchange Exchange 7. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). one Making Counteroffers (The “Give and Take”) 97 .Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. 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. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). Because they held opposite positions on these issues. and removed from the table.
but it can be very effective when a negotiation situation involves several issues. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. They then identify each as compatible. if both parties start from reasonable positions. Conclusion This tactic is simple. exchange. when you exchange items so that each party achieves their desired outcome on one of the two. Third. negotiations begin on a positive “win-win” note. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. or distributive so that the negotiations can begin in an organized manner.side’s gain is the other’s loss. 98 50 Practical Negotiation Tactics . Second. but a middle ground was eventually found on each and negotiations ended. the most difficult issues (often involving price or some other economic measure) can be negotiated because you know that most items have been settled successfully and only a few remain. when you agree on the items where both parties have similar desired outcomes. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. you can use the process to settle many of the other issues on the table. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. The tactic offers several advantages: First.
Rob: Wait a minute. and looks like you are belittling them. and refrigerator. The final issue had to do with “lights out” and quiet times for studying. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. and from a strategic standpoint. Rob stays busy all day and evening with other activities. Rob: Making Counteroffers (The “Give and Take”) 99 . A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. Mutual respect must be part of the negotiation process. and studies late into the night. Here is how the last issue was handled: Okay. and on what would be considered acceptable “sharing” of each other’s junk food supplies. each side is expected to put an offer on the table. do not offer a counterproposal right away. even if you aren’t going to accept their offer. the location of the TV. It is especially important that you do two things: take your time before rejecting any offer from the other side. 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. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. stereo. they decided to establish “room rules” so that they would both be comfortable with the room assignment. and can help you reach your goal. So when’s a good time? Jasper: (without hesitation) No way. Jasper: Finish or not. They agreed on which part of the room each would have. This isn’t high school. I’m not interested in a curfew. Waiting a respectful amount of time to counter. you know. so he wants a quiet room late at night. so I can study. will make your opponent feel good about the process.Tactic 24: Wait to Counter As the negotiations begin. last item: I’d like it quiet in the room at night. Since they didn’t know each other well. Let me finish.
The appeals procedure would have to be altered to reflect the restructuring. Jasper: (without taking a breath) At best. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. The union contract required that management renegotiate this change in the grievance procedure with the union. and the union foreman would report directly to the plant manager. Under the restructuring. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . and d) a hearing with company owner if the matter is not resolved in 20 days. Jasper: Midnight. b) written complaint to a floor manager if the matter is not resolved in 5 days. and that’s not negotiable. No agreement was reached. but changed his mind when he saw Jasper’s attitude. the positions of non-union crew leader and floor manager would both be eliminated. is all I’ll consider. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader.m. and that’s it.m. midnight during the week is the only thing I’ll consider. curfew on TV and other noise every night. 10:30 p. Under ABC ‘s contract with the union. 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. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy.Rob: (Rob was about to suggest midnight on Mondays through Thursdays.) Listen. I want a 10:30 p. Rob: (there is no hesitation in this voice) No.
any objection to the change. Union: As you know. Company: (rather abruptly) Let’s not drag this out. We’ve got a couple of alternative models for you to consider. and I’m certain your members will be okay with it. because those management layers are gone. (Note: An attitude change sets in. Company: (no hesitating) Trust me. We’ve simply eliminated the first two steps. In fact. If the union foreman felt that the grievance had merit. An aggrieved employee can make a request for a meeting with the plant manager.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . rather than go on to appeal it to the company owner. this redraft is a very simple change to the contract. our grievances often signal to management that there are real problems on the shop floor. no one can complain about that. The redraft is simple and straightforward. 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. 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. Certainly. We just cut out two steps. If in 20 days he/she has not been satisfied. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. ABC Company’s negotiator explained the management changes soon to be implemented. and everything else stays the same. but to dictate. rather than as a judge on the merits of the grievance. Union: Hold on. We’d like you to consider the plant manager’s role as a problem-solver. he/she can take the grievance to the plant owner for a hearing. the employee and the foreman would meet with the plant manager and attempt to resolve it. and began the negotiation session concerning the grievance procedure. After initial pleasantries were exchanged. Union: You obviously didn’t come here to negotiate. Company: Here’s the new draft of the grievance procedure. The union was prepared to accept the plant manager’s position as final.
two-step grievance procedure instead of a four-step procedure. the two parties did meet again. rather than in the 35 days the current system provides. You can’t be serious. This time. After a cooling off period. We’ll see you on the picket line. Union: We’re very serious. and actually accepted a three-step procedure. 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. and we’ll strike if we have to. 102 50 Practical Negotiation Tactics . 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.
Mom says you. Bill. Next year. 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). two sisters. Bill’s family won. it’s just too much to do both. The couple used to have Thanksgiving dinner at both families’ homes. They flipped a coin to see who “got” them and the new baby this year. established goals. Nancy: Sue. and identified the range of options they feel comfortable with negotiating. Sue: Yes.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. They’ve done the research. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. one sister. Be open minded.m. you can adjust your demands or goals to include such new ideas. Bill’s family (parents. Making Counteroffers (The “Give and Take”) 103 . we’ll get to our side. and ten nieces and nephews) always ate around 5:00 p. their spouses. But after the negotiation gets started. and do not dismiss something said by your opponent just because it came from the opponent. and we’re really not able to enjoy either one. and now have a new baby girl. four brothers. If you are flexible. 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 Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. 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. Example 1 Sue and Bill have been married four years. two brothers. Even before the baby’s arrival. Sue’s sister Nancy called her to talk her into coming anyway.m. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. Sue’s family (parents.
Nancy: If we keep the time at 5:00 p. we’ll come to Mom’s. 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. but she won’t tell you. Nancy: I’ll let you know. By being flexible. When that goal looked out of reach. Celebrating the next day seems odd. either. Mom’s very upset. Nancy: We’d make it special by all of us being together. 104 50 Practical Negotiation Tactics . I mean. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. I know that I would rather not do two Thanksgiving dinners on Thursday. but then I realized that the rest of you already go to your in-laws earlier in the day. it’s okay with me if you can sell it to everyone else. Sue: I don’t know. I thought of asking Mom if she could move dinner up to noon or so.Nancy: It just won’t be right without you guys.m.. There’s nothing “special” about Friday. some people have to work on the Friday after Thanksgiving. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. Sue: Next year. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. and it became the family’s new tradition. So that doesn’t work. Thanksgiving is Thursday. the holiday will be over. she suggested a unique alternative. I bet everyone could make it on Friday. Bill won the coin toss for this year. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present.
depending on the cost of the land. but the principal of the fund can’t be touched.000 a year for operations. Foundation officals: Oh. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Unfortunately (for Kids’ Home). 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. City officals: We can probably give you the land for free. we’re committed in theory. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. City: Can’t you borrow the money from a bank to build the facility. We only have maybe $2 million a year to put toward this charity. Each year.Example 2 Kids’ Home. the interest income of around $6.5 million is available for distribution to numerous charities. Kids’ Home hoped to get $500. We need the city’s help by allowing us to get the city land donated to us (for free). The foundation has a substantial endowment fund. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. the foundation’s regular annual grants come to roughly half of their available funds. we hope to break ground early next year for the new orphan home. but we can’t fund all of the $12 or $15 million. Kids’ Home: That’s why we brought the foundation’s officials with us. a non-profit organization for orphaned children. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . but we need some assurance that you will be able to build and operate the orphan home at that location.
Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. If we borrowed $15 million at 10% interest. We’ve never committed our funds to pay back a bank loan. We probably would not be able to participate. 106 50 Practical Negotiation Tactics . I’ll contact the state tomorrow. and really taxes our ability to raise funds. We’re not familiar with that program. 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. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. We’re a nonprofit group.Kids’ Home: Borrowing the money gets very expensive. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. but we’re willing to look at it. it could end up costing double that amount. We wouldn’t want to make such a commitment to a bank.
and often lasted until 2:00 or 3:00 a. and trust can only be established if all parties interact truthfully. However. They asked to meet with the Smiths to talk about these disagreements. it is not acceptable to lie. you might not want to reveal all of your priorities at first. Mr. the neighbors began to have problems. and we would very much like to talk about how we can resolve these issues. and asked the officers to cite the Jones kids for parking too close to a corner. Making Counteroffers (The “Give and Take”) 107 . Jones: We’ve obviously gotten off on the wrong foot. In order for a negotiation to be successful. Before the Jones family moved into the neighborhood. At the same time. Mr. the Smiths could count on parking their car directly in front of their house. The Jones family suspected that the Smiths called the police. Successful negotiations depend on trust.m. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. Example 1 Soon after the Jones family moved in next door to the Smiths. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. Smith: We don’t know what you’re talking about. It is perfectly acceptable to say that you are not ready to reveal certain things. But the Jones clan had four cars altogether. each side has to know generally what each other wants to accomplish. and often took up all the space along the street in front of the two houses.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. These parties could get rather loud. The Smiths called the police to complain about a late-night party. yet not reveal all of your goals and objectives.
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. that wasn’t us. and was met with the following: Mr. but we do know that someone has complained. we have a problem walking long distances in bad weather. they kept it. (A week later. Also. Mr. Jones: Okay. they’re hitting baseballs into our yard. Mr. and they won’t be having friends over more than one night a weekend from now on. It is really very disturbing. In spite of the Smiths’ assurances. the late-night parties are a problem. At our age. Smith: You know that your boys are causing our dog. yes. Smith: Yes. since you’ve asked. a lot of problems. we’d like to be able to park our car in front of our house. then they’ll need to come in at midnight so that their talking doesn’t disturb you.) 108 50 Practical Negotiation Tactics . and not in the back yard. In good weather. we’re good now? Mr. Mr. Jones: I wish you had mentioned that the last time we talked. I guess. Mr. So. Almost every day. And the music is to be off at midnight. Jones came to see what the problem was. we thought you might have called the police about our kids’ party and our cars. Mr. And we’ll make sure none of our cars are parked in front of your house. Jones: Well. Smith: No. Smith: Well.Mr. if they are outside. Is that everything now? Mr. Smith: Well. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. we would like to work out some solution. Muffin. fine. Jones: We’ve already talked to the girls about the parties. the next time the boys were out playing and the ball came into the Smiths’ yard. I’ll talk to the boys and we’ll make sure they play baseball in the park.
but Neno cannot tell the union this. although none of the facilities outside the U. because they didn’t like a grievance decision. Its local headquarters has a union to handle its international shipping. You obviously don’t want to be “good neighbors. The union knows that the company is up for sale. Neno’s president and the Union representative met to discuss the walkout. 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. We would have fixed the tree if you had asked. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. or the deal is off.Mr. or European companies do. Neno has been negotiating the sale of its business to a British company. the British firm will walk away from the deal.S.S. Smith: Well. The union laborers walked off the job on Friday. Making Counteroffers (The “Give and Take”) 109 . You could have seen that yourself. Jones: Sure. irate) I can’t believe you people called an inspector on us. Mr. Jones: (at the Smiths’ door. Japanese companies often do not “recognize” labor unions the same way U. Why didn’t you tell us? We can’t read what’s on your mind! Mr. But we didn’t call the inspector. Example 2 Neno Enterprises is a shipping company with extensive global operations. Union officials are afraid that a Japanese company might purchase it.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. The British insist that a very strict confidentiality provision be part of the negotiating process. and the deal is close to being final. have labor unions. Unless Neno can get the Union members back to work on Monday. the tree was clearly over the fence. you’ve said that before.
Anyone who buys the company will have to honor the contract we have. Neno: Look. whether it’s for one weekend or a week. I promise you. Therefore. it will impact our marketability.Neno: You know this is a wildcat strike and that it is in violation of our contract. we don’t. If everyone is back on Monday. this is a legal strike under the contract. We’ll meet with all of the parties on the grievance first thing Monday. I need your guys to come back to work on Monday. I’ll forget all about the strike. Have the guys back on Monday. We can’t put up with the kind of decision we got on our grievance. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. Neno: Look. any interruption in our shipping could affect how these buyers look at our business. I’m certain that if we can sit down and talk next week. 110 50 Practical Negotiation Tactics . It’s not the time to have one. then there’s probably no harm done. we will resolve it to your satisfaction by the end of the day. no harm-no foul. You really don’t want to do that. But if your guys are out past Sunday. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. and if the guys are back on Monday. so the union won’t be hurt by the buyout. I know it’s not news to you that this business is up for sale. I think it already has. You don’t want to mess up our negotiations. Our guys are prepared to stay out a lot longer than Monday. is still a labor shutdown. do you? Union: No. If they do come back. Union: What aren’t you telling me? A labor shutdown. Neno: All I’m saying is that there is a difference. I can’t really be more explicit than that at this time. But I have to have everyone back on Monday. maybe by next Friday or the week after that we’ll have our guys back to work. Union: We think that the grievance decision affects our wages. We’ve not had a labor shutdown in 20 years. And one company that is interested has a really good track record on expanding the businesses they buy. If that’s going to have a bad effect on your being able to sell the business.
But I need to tell my guys that this is important to them as well. Because the parties had dealt honestly with each other in the past. Can you assure me of that? Neno: Yes.Union: It’s that important to you? Neno: Yes. while the grievance was being resolved. Union: Okay. we’ll be back to work on Monday. rather than make up reasons. was the right decision to make. He told him that it would mean that the union would not only keep its jobs here. I’m going to go along with you because you’ve always dealt straight with me. I would be more specific. Union: Okay. the sale was finalized. Conclusion On Monday. But I can’t. Neno called the union negotiator in and briefed him on the sale. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. and it’s that important to you as well. as well. If I could. Making Counteroffers (The “Give and Take”) 111 . I can. but the British firm will allow them to organize at their foreign locations. the union was willing to trust Neno—even though he couldn’t tell them everything.
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
Roberto: Well. Amber resisted the chore she hated. (long pause) Felipe: Let me give you three options: A. B. that is enough time.000 for advertising. I’ll find a way to do without one part-time person. she chose the one she most preferred. but the company president does not share your optimism on this program. I’m not going back to him again to discuss this program. Felipe: Sorry. keeping her Saturday free. I’ll approve $15. but I will cut your travel budget out completely. Roberto: But it will never generate enough interest if no one knows about it. I can’t help. Example 2 Roberto: I can’t properly advertise this new program with a $5. or we lose a whole year. I’ll do it now.Amber: row before your basketball game.000. I can accept B. Use the $5. I have three hours. Felipe: (Roberto’s supervisor) Sorry. and clean it. or C. but no TV or anything until it’s done! (pause) Okay. Conclusion At first. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics .000 budget! I need at least $20.000 for advertising. Clean it after your game. Roberto: But I need to start the direct mail and newspaper ads within two weeks. but I will cut your staff by one part-time person (or $15. Felipe: Well. I’ll approve $15. Three. But when her mother laid out the schedule and gave her alternatives. Take it or leave it.000 in the budget.000).
Conclusion Felipe was willing to think “outside the box. thus achieving his goal of not having to ask for a larger budget. would enable him to adequately promote the program. One alternative. Making Counteroffers (The “Give and Take”) 117 . which was his goal. Roberto believed.” He offered Roberto three alternatives of equal cost.
Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. If his opponent cannot agree to the demand but does not want to end the negotiations. 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. You know my commitment to this company. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. I think you would agree with me that I have performed well above expectations this past year. Susan: I hope so. Unfortunately. nearing her third year with the company. Example 1 Susan. After a few minutes of silence. This should have resulted in an automatic promotion and a sizable pay increase. I very much appreciated the fair job performance review you gave me. you are a valued employee. Here’s how the negotiations went. She was determined to hold her ground for at least a 13% pay increase and a promotion. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. he can make an open-ended statement. Jones. but one side comes back with a non-negotiable demand. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. 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.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. Jones: I certainly do. inviting a response. Susan: Mr. It was 16% less than she had been led to believe she would be getting. 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. The negotiator for the other side says nothing. and 118 50 Practical Negotiation Tactics . the promotion had not yet been approved.
the company’s refusal to grant them now was a harder position to support. I would very much appreciate it if you could ask the company to reconsider.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. I could probably find a way to phase it in over a two. (says nothing) If I can’t get that pay increase approved right now. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. maybe we can talk about the promotion later in the year. and I’m sure management will agree. and I think that I really haven’t been dealt with fairly. Making Counteroffers (The “Give and Take”) 119 . Well. it could help. I must ask you to try to get both. if management can see their way to giving you the pay increase now. Conclusion Mr. Jones to continue to offer solutions. but a pay increase of that size might be more difficult. Susan’s silence prompted Mr.or three-year period. of course I will be glad to do that. (says nothing) Or. I suppose I could get the promotion approved with the proper presentation. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. Once he acknowledged that both items might be awarded sometime in the future. I really want you to stay with the company. because I feel my future with the company might be at stake here. Okay? (says nothing) Let me check it out and I’ll get back to you. If there is some flexibility in your request. Promotions of this type are all but automatic around here. and sell it to management that way.
She has not decided what she’s running for. by saying that she might run for Chair.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. The mayor. The term of the original agreement was nearing its end. Also. Mr. 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. Mayor) said that she was considering running for office. This is how the negotiations went: Town Council Representative: Well. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . My bosses might not have been inclined to expand the agreement anyway. Town Council Chair). He decided to push for a simple renewal of the original terms. Town Council Representative: I think you’re wrong. her plans really don’t have any bearing on these negotiations. I don’t think it’s a problem. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. The parties agreed to continue the previous terms of the agreement. The end of the agreement coincided with the election cycle for the two towns. and until she does. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. has colored these negotiations. 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 the officials had hoped to complete the negotiations prior to anyone involved announcing for office. Mayor’s representative: No. but now they’ve got to ask what Madame Mayor’s motivations are. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. and were trying to settle on new and expanded areas when one of the elected officials (Ms.
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. and the agreement was renewed with no new provisions. I’ll go back and tell Madame Mayor your position. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued.represents have to worry that her desire to switch governments might taint the negotiations. He either had to end the session or figure out what to say to reengage the other side. Mayor’s representative: Well. I don’t know what her reaction will be. Conclusion By remaining silent. I hate not to attempt to add some additional areas to the agreement. In the end. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. Making Counteroffers (The “Give and Take”) 121 . the Town Council representative’s position prevailed. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. the Town Council’s representative left the mayor’s representative with no room to maneuver.
The brook 122 50 Practical Negotiation Tactics . after the gazebo had been there for about five months. Madeline built a gazebo about 500 yards from the brook. As was sometimes the case in these parts. Madeline: Hi. The reason I built it was so that I could protect my patio. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. This range for maneuvering is not the same thing as the list of items you make at the outset—it’s the last space separating you and your opponent. “I have to have this. the brook was the property line separating her property from a neighboring farm. and began to renovate it as a home and a pottery shop. which an upstream neighbor had built. She discovered that a rock barrier. One day. Neighbor: Well. you should always enter the talks with a good idea of what you are willing to agree to. I have a problem. You will have to remove the rock barrier. 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.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. the brook and rock barrier are on my property. It calls for compromise. in a small clearing. had redirected the brook further into her property. Example 1 Madeline bought an old farmhouse outside of a small town. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Madeline. when one of you might say. She traced the brook back along its course to see why and where it had changed its path. or we will be at an impasse. The property came with three acres of forest alongside a meandering brook. she noticed that the brook came within 100 yards of it. Obviously. Having an iron-clad demand probably won’t give you enough room to reach an agreement. Joe.
Madeline: But by diverting the brook. you have not only threatened my gazebo. Neighbor: I can do both of these things. and allow the neighbor to protect his home. 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. Also. and return everything as it was. Madeline: Well. Neighbor: I’m sorry. When she found out that this was not going to solve her neighbor’s problem. What if you removed the barrier for a short time. This will put these houses right next to me. I’ve lost 400 yards of property on my three acres. My neighbor on the adjacent farm wants to sell part of his property for a housing development. I couldn’t have that. I understand that. what I need is to protect my property line and my gazebo. I won’t remove the rock barrier. She left room for a compromise.extended right up to my back door when the rain was heavy. Then. if the brook is redirected. but I don’t know what I can do about it. I can’t have the brook in my house. Madeline: Yes. at least I’ve maintained my property line. restore her property line. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. Making Counteroffers (The “Give and Take”) 123 . It might not be necessary to make such a dramatic change. which enabled her to achieve her goals. 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. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. but you’ve changed the boundary line of my property. Madeline was able to protect her gazebo. she widened her range of options. By expanding the range of options available to resolve the dispute.
And we cannot afford that $1. As best as we can tell. Pilots: Look. The company wants to trade paying for dependent coverage for better pension benefits. Over the next five years. then the pension benefits overall will increase by $10. with all wage and operations issues resolved fairly early.000. and are willing to keep pension benefits the same.000. 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. as it has always been. However.000. the company can make your pensions much better. If we invest the $200.000.000.000 (which we reasonably should have expected to pay in premiums) in the pension account now. The pilots want dependent coverage paid for by the company. With long-term planning and investments. and the premiums for health care just keep going up. what they really need is for you to cover the costs of dependent coverage. The projections for the next five years were that these costs would increase to about $1. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. The airline industry is in a slump. Everyone was afraid that the dispute would cause an impasse and a possible strike.000 to cover the premiums for dependent coverage.000. Company: This could not come at a worst time for us. the airline paid a total of $200.000 a year over the next five years? Company: Yes. you are taking a risk on the costs increasing. that would be the minimum increase. we know that health insurance premiums might skyrocket. But only a few of our people are close to retirement age.000. 124 50 Practical Negotiation Tactics . This is just a cash-flow problem that your members have to understand. and we know that with this new contract term of five years. This would be a better benefit in the long run.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. Over the last five years.000 figure.
the company will not be expected to give us this benefit. Company: If the company spends the $200. we are. The health insurance market stabilized.000? Once the cap is met. then those funds will not be available to invest in the pension plan. however. Conclusion The company was committed to limiting its exposure to $200.000 available. so the decision to be flexible was a good one.000 the first year on the premiums. It initially believed that the only option was to put that money into pension benefits. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.Pilots: But you do have the $200. The $200. If we can get two or even three years out of the $200. Company: Then it’s okay with us. with a cap of $200. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. can we agree to a year-to-year agreement on dependent coverage. The pilots expanded the range of options. and the pilots knew what to ask for when the contract expired. by agreeing to let the company cap its exposure for dependent health coverage.000 actually carried them through four years. if they were that high. The dependent coverage is more important to us now than the pension benefits. that would be worth it. Making Counteroffers (The “Give and Take”) 125 .000.000 to either pay one year of the premiums. or invest in the pension plan? Company: Yes.
Saleswoman: With your 740 in trade.000 car. Saleswoman: I’ll be right back. Phrases such as “for only pennies a day. Buyer: Yes. If you are on the receiving end of such a tactic. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. $45. I love this car. if I can give you this car with a $300 monthly payment. what monthly payment did you have in mind? Buyer: More like $300 per month. it’s a deal? 126 50 Practical Negotiation Tactics .” “affordable weekly payments. and compare it to your strategic objective.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. I guess it would be around $600 per month.500! Saleswoman: Yes. I recall the day you drove it out of here.” 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. do you want to look at something else? Buyer: No.000 for a Volvo? I bought the one I’m driving for $19. Example 1 Car buyer: What. be sure to add up the total cost.… (20 minutes later) Saleswoman: So. but that was several years ago. Buyer: Way too much! Saleswoman: Well. I just can’t imagine the monthly payment on a $45.” and “low monthly rates” are examples of the salami tactic.
Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. Once the buyer volunteered that $300 was an affordable “slice. can’t you? Buyer: Yes.” she had him—she worked around the $300 slices. and payout slices to reach the total price she wanted. with your car and $6. You can do that. and added the trade-in. I can’t discuss another client’s account.00 per month. I can’t afford that much. But my neighbor pays $39. do you want HBO? How much? $5. Sure.00 per month. Great! So. Making Counteroffers (The “Give and Take”) 127 .000 down. but let me see the numbers. do you want Disney? Yes.Buyer: I don’t see how you can do that. it will be a five-year lease. (looks at the numbers) That looks good. as promised.00 per month for your service.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. I can afford $6. Let’s see.99 per month. Saleswoman: Simple.000 price into “slices” the buyer thought reasonable. but what else must I buy? Only the basic service for $8. you can get the Disney channel for only $5.” She decided to cut the $45. Instead of a three-year lease. down payment.
2? How much? $8.00! Why? Because he judged the per-slice price to be reasonable. 2. The total is $38.00. and probably felt much better about the total negotiated package because it was presented in modest individual slices. Any other kids’ channels? Yes. but he agreed to six “salami slices” for a total of $38. That’s another $5. they asked about the Cartoon Network. 3. Thanks. That’s $5. What about the music package? Yes. 128 50 Practical Negotiation Tactics .99 per month. Great. instead of one total amount. we had that before.00 per month was far too much. and SI 1.00 a month. Conclusion The owner thought his neighbor’s service at $39.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Okay. and my wife wants the old movies. I really want the sports channels. Disney is for the kids! The sports channels are for me. Yeah. But that’s all! Then we’ll hook you up on Monday.00 per month.
Applying Pressure 129 . Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. so are you ready to make a deal? This might convince a few buyers. It should be used with caution: It can end negotiations immediately. When both sides believe that each has equally strong positions. angry negotiations.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. In some cases. but others will walk out the door. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. turned off by the tactic. today. For example. but in tense. pressure tactics should probably be avoided. the traditional car salesperson might tell the buyer. which can be successful if the opposing team has two or more members who hold different views of an issue. 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. but it can be used effectively when one party clearly has an edge. and it can destroy your credibility. and the use of humor. Humor might not look like pressure.m. 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). “I can only guarantee this price until 6:00 p. Tactic #33 (The Bluff) is a classic pressure tactic. however. it is effective.
he and Chloe wanted to buy out Don’s and Abby’s interest. big news! I’ve been promoted. but Don. Such exaggerations are easily revealed or uncovered. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. I think Chloe and I would be willing to pay more than just the money you guys put into it. Abby really loves that boat. It 130 50 Practical Negotiation Tactics . Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. Don: Wow. In the last couple of years. Your opponent will consider you untrustworthy and might even be insulted by your attitude. together and separately. Lacey: Don.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. and we need to talk to you about how we can buy you guys out. And we don’t want to be unfair. Lacey: I know. but it is not a good idea to exaggerate what you are offering or what you are giving up. Although I do think there ought to be some consideration for the two years you had use of the boat. We’d hate to give it up. Lacey and Chloe didn’t know that Don and Abby were. Chloe and I would like to take the sailboat with us. Lacey. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. and we’ll be moving south in the next month or so. Don: Absolutely. I don’t know. in fact. When Lacey found out that his employer was transferring him to another city farther down the coast. Don and Abby now use it less and less. getting a divorce and each moving away (and would have no more use for the sailboat). boat prices have really gone up. and they will weaken your credibility. The two couples used the sailboat a lot the first couple of years.
Applying Pressure 131 . Let me talk to her. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. Lacey and Don’s negotiations changed considerably.) Lacey: Don. Abby is having this conversation with Chloe) Chloe: Abby. Don. It’s about time now for some major investment. I’m sorry. We’ll be leaving here for the Midwest. he likely would have found himself in a stronger negotiating position. 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. which you would have to share if you want to retain half-ownership. I was afraid something was going on when you all-butstopped joining us on the boat. After all. I’ve been thinking. big news!! Don got his promotion. the boat has depreciated. though it’s not so happy. Don and I are getting a divorce. I have big news too. Abby told Chloe about the divorce and about how she never wants to see the boat again. and neither of us put much in for upkeep.is just about the most important thing we own. but separately. (After Lacey and Chloe had a chance to talk. and we’re moving farther south. Lacey: Cut it out. I’ll be glad never to see it again. Don: Lacey. and I’ll get back to you. Abby: Well. (Around the same time. It just reminds me of how happy Don and I used to be. Abby: That boat. Chloe: Oh. I thought you understood how important this boat is to Abby. I’m surprised by your attitude.
Company president: Well. the company president decided to use the stock price as a negotiating tool during the current union contract talks. I can’t see how today’s numbers really impact the long-term profitability of this company. and that the economy is strong. our production line changes at least three times a year. the situation in the stock market is not good. Union negotiator: The stock price might be down right now. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. I’m telling you the stock price is having a huge impact on us already. I’ll be looking to you to make some major wage concessions on this upcoming contract. I read in the papers every day that the market is still strong. I’ll have to show them 132 50 Practical Negotiation Tactics . I’m afraid that with this current information. in fact. The current stock price is the lowest it has ever been. I’ll be going back to them as soon as next week.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. And as you know. Here’s how these negotiations went: Company president: Well. And while these fluctuations have little to do with the health of the company itself. we will need to make drastic cuts in our operating costs just to survive. I think you’ll have to agree with me that wage increases in this next contract will not be available. but this has been such a crazy situation. they will make their decision based on a review of the stock price that day. in this global market. 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.
We think this company is very healthy and can withstand the temporary downturn. If the stock goes up next week. Give me your proposal for wage concessions. let’s talk about it. Union negotiator: Well. but your proposal to cut wages is just not going to fly. Conclusion Because the company’s president over-emphasized the impact of the market on the company. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. When the market took a swing up during the negotiations. Let’s get back together next week. If you put it that way. here’s what happened. Company president: All right. So. okay. they would do a thorough analysis and look at the health of the company over the long haul. (In the interim. Applying Pressure 133 . this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. They told union officials that it would be very rare for a bank to make its decision solely on stock price.that we’ve cut expenses to counter the losses in the stock market. and I’ll have our people look at it. When negotiations resumed. he lost the trust of the union. the union checked into the Letter of Credit transaction with some experts in banking. and the union ended up with a substantial increase in their contract. The union became hardened in its position that the employees needed wage increases in the new contract. the company’s position was weakened even more. no concessions! In fact.) Union negotiator: I’m sorry. but I checked it out and it’s not totally true. we’d like to reopen talks on next year’s pay increase. Union negotiator: I know that’s what you told me.
Tom: Oh. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. She knew that if she made such a demand and threatened to leave him unless he made a commitment. but Christy thought the relationship was heading in that direction. and I really wanted to see the new Lenny Bruce movie. it might backfire. I called Charlene and she was available. I really hate it that you chose to see the movie with Charlene. they are bluffing. I guess I’m just surprised. are you? Christy: I don’t want to be. The couple had not discussed marriage. either. We don’t have that much free time together. Sara said she saw you at the movies with Charlene yesterday.Tactic 33: Bluff! Bluff with caution. Poker players know all-too-well-that bluffing can be very costly. 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. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. Example 1 Christy and Tom had been dating for about a year. Charlene. This can come back to haunt you. but I really am. I knew you had a class. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. 134 50 Practical Negotiation Tactics . you will have lost credibility with your opponent. If you subsequently agree to begin talks again. so their “free” time was very limited. Here’s how the discussion went: Christy: Tom. You’re not upset about that. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. yeah. and they really have no intentions of doing so. and she didn’t think Tom had. If one party threatens to walk out of the negotiations if a demand isn’t agreed to.
Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. If that’s not possible. Conclusion Tom didn’t want to lose Christy. If Tom had “called” Christy’s bluff. He believed she was sincere. I just thought of her because I knew you weren’t available. then I’m afraid I want us to stop seeing each other. she paid her own way.Tom: She’s a friend who happens to be a girl. Tom: I have friends of long standing who are women. Applying Pressure 135 . Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. if you can’t make that kind of commitment. I won’t go out with any woman friend. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. She convinced Tom that her feelings were strong. 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. Actually. Since he wasn’t sure about that. and at first he thought she might bluffing. It’s made me realize that I want us to have an exclusive relationship. I’m willing to risk losing you. I certainly don’t want to lose you. It is. so he didn’t call her bluff. The union negotiators. but very little progress had been made. I’m not “dating” anyone else. 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. Christy: I just can’t see it that way. I need to have your commitment that you won’t do that. Tom: Okay. he had to make a commitment or risk losing her.
much less today. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. And I don’t believe you’re going to go call for a strike over this. We need an answer today.) 136 50 Practical Negotiation Tactics . Here is what happened at the next negotiations session: Nexon: I’m sorry. Nexon: We’ve got lots of issues to discuss. it will cost too much. decided to threaten to walk out of the negotiations and have the membership vote on a strike unless Nexon made some concessions at the next meeting. Union: You don’t seem to understand. Second. Nexon: I’m just not prepared to give you one. we’re really prepared to go the distance on this benefits issue. We need some agreement on this today. We’re not going to reach agreement on this at all. This is a critical issue to us. Another bargaining session was scheduled. Union: You’re wrong. or else we’ll be asking the membership to strike. This is something we just have to have. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. Many of our union members who are working part-time hope to work full-time.believing that Nexon would not risk a strike. Nexon: I’m sorry. but working without benefits is simply not acceptable. we want the part-time workers to apply for and fill fulltime positions as they become available. Why don’t we put this one aside for now. First. If we’re not able to reach agreement on this. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. then all of our other demands will change. The union members ended up voting not to strike at this time. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
the guy was in no position to dicker over the price of the repair. not blessed with many household repair skills. there were times when there was no pressure and no emergency. Try bargaining with a plumber! This homeowner. for example. On the other hand. The same kind of thing happened a couple of years before that: In the middle of August. 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. while the other is not—that is. once had to call a plumber in for emergency repairs. when one side has “leverage” over the other. Example 2 Let’s face it: Sometimes one party holds all the cards. because this is the busiest time for that industry. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. He was at the mercy of the company that could install an appropriate unit the fastest. its union has the advantage in the weeks just before Christmas. If the employer is a shipping and express mail company. It is sometimes referred to as “pressure bargaining. such as the advantage of time. and was forced to pay whatever they demanded. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. his air-conditioning unit went out. Since the heating and air conditioning company held no leverage over him. Unions can strike at any time to achieve their goals if they have some leverage. he was able to successfully bargain for other services. Since his toilet had overflowed and water was continuing to run all over the floor.” Example 1 We have all been at the mercy of someone who uses pressure bargaining.
This gives it the upper hand in negotiating with employees. When one side places undue pressure on the other side. if the unemployment rate is high and jobs are few. however. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. will what goes around come around? 142 50 Practical Negotiation Tactics . etc. then you are in a position where you can set reasonable demands on wages. consider whether or not the two parties will likely meet again in the future to negotiate. but they are less willing to negotiate several months ahead. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. low employee motivation. she has leverage and can more likely hold firm on her price.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. If so. and other undesired outcomes. On the other hand. despite strong resistance. Other employers find themselves in situations that actually reverse the leverage (when. What goes around comes around. When the employer proposed adding duties to the job classifications. unemployment is low and jobs are plentiful. (Team owners are notoriously unpredictable. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. there are likely to be long-term repercussions. but before you choose such a tactic. it is the union’s turn to hold firm on its demand). A note of caution: Circumstances in one round of negotiations might give one side an advantage.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. the employer has the advantage: a supply of jobs. The employees had no power to resist the demands of the employer. can suffer repercussions in the form of sabotage. for example. If you have a special skill that an employer needs and few others have that skill. either individually or through collective bargaining. benefits. he didn’t have to be flexible because the employees believed that they had no alternatives.
Susie: Okay. This time. About an hour into the drive. and here’s how the “negotiations” went: Dad: You two stop fighting. Why? A sudden surprise can disrupt the dynamics of a negotiation. the girls had been fussy. (In a few minutes. We’ve got a long ride ahead of us. (Their dad pulls to the side of the road and turns to face them in the back seat. and Susie. the little girls began to fight over the doll. because you will probably only get to use it once.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. the fighting starts up again. Example 1 A father and his two daughters were on their way to visit the grandparents.) Dad: Stop it right now. Andrea had taken them off the doll. Andrea: Okay. Consider making a suggestion or a proposal that completely surprises your opponent. Susie: The doll belongs to both of us. Andrea: The doll is mine. You’re driving me nuts. I can’t drive if you keep this up. Andrea. you have it when we drive home. and I can’t stand it. and Susie hid them under the seat. you have it this part of the trip. but use this tactic judiciously. Tell Susie to let me have it. Almost from the beginning of the three-hour drive. Mom said so. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. The doll can be shared. Their dad tried to reason with them. the argument is over the doll’s shoes. I took it out of the box.) Applying Pressure 143 . Just share the doll. Just because you saw it first doesn’t make it yours.
The auditor asked to meet with the editor to explain his position. The litigation itself had been going on for more than three years. he slowed down. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation.Andrea: Give me the shoes back. 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. Dolly doesn’t need shoes on in the car.) Dad: Now there’s no more fighting over the doll. to no avail. charging that they breached their duty in their handling these funds. The tactic was so successful. in fact. so it was worth the risk. but nothing else up to that point was working. Daddy said I got the doll on the way to Grandma’s house. The local newspaper was prepared to urge the auditor to end the litigation. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. and that they had invested and spent the tax dollars wisely. Susie: Daddy didn’t say anything about the shoes. The defendants contended that the auditor’s actions were politically motivated. and reached back for the doll. Conclusion Dad’s use of a “surprise” tactic was extreme. and I hope I can convince you of that. (They continued to argue and whine and pinch each other. Both Andrea and Susie were so shocked by their dad’s action. Finally. I think I have acted properly. He initiated the litigation against the local school board members and several banks that invested the money for the board. 144 50 Practical Negotiation Tactics . Dolly has to have her shoes. I want the shoes. Dad tried correcting them a few more times. He grabbed it and threw it out the window. She can have them later. they didn’t say another word. at great expense to the auditor’s office and the school board.
The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. this case needs to be dropped. Conclusion The editor wrote an editorial urging a resolution for the good of the community. perhaps you should just cut your losses—and just drop the suit.Editor: I’m certainly willing to listen. the bank would not have done that had we not proven our case. They are very persuasive that this is just a political battle. as a matter of fact. rather than drop the case. there’s just nothing to back up your allegations. and a significant amount of money will go toward the tax fund. but actually superior to some other entities you supervise. but recommended that the parties reach a settlement. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. one of the banks settled with my office. Auditor: I appreciate their arguments. Thank you for coming in. Editor: Well. From what I can see. and it is costing your office money and good will. We believe the other defendants will soon follow suit. I guess we’re finished here. That’s really the reason this has gone on so long. I really think the community would be better off. 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. This morning. Your reporters will probably want to follow up on it. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. Obviously. Here are the papers. Editor: Well. but I have to warn you that from what I’ve seen and heard so far. I think I have something here that will convince you otherwise. They’ve been making that same argument from the beginning. Auditor: Well. Applying Pressure 145 .
I’d 146 50 Practical Negotiation Tactics . Dad. you might be able to dilute their power by identifying their different interests and addressing them separately. and a car is more important to him than a pool table. night after night. I want to talk about a car! Mike: It’s really not one or the other. they’ll be mobile! The last thing I want is for them to be out cruising around. but I think it will get a lot of use. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. I can remember spending hours playing with my friends and family when I was growing up. Tina is against it because she doesn’t think it will be used that much and it will take up a majority of the floor space in the family room. I know we’ll all enjoy it.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Kevin: So am I. although getting your license and getting a pool table are connected. 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. Kevin is against it because he is turning 16 years-old soon. Mike: I know. If the other side involves more than one person. especially Kevin. Tina and their son Kevin are against the idea. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Kevin: I don’t really care about a pool table. Mike knows he needs to get either his wife or his son on his side. Tina: I’m really against this pool table idea.
And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. Here’s how the negotiations went. A pool table could attract them here. she joined his side of the debate. and Kevin and his friends use it often. the chief negotiator for the company. Conclusion Mike found an argument that divided Tina and Kevin. But I’m not going to hang out here all the time. Once Mike convinced Tina of the idea’s merits. A number of contract changes have already been worked out and Wylma. don’t you think you guys would use it? Kevin: I guess so. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. then maybe it’s not such a bad idea. I’m surprised. Mike: I really do. Wylma: Tom. I thought we were making real progress. Kevin. She noticed that Jim (another member of the union’s negotiating team. has just presented the company’s initial wage offer. Instead of both opposing the idea. received it without comment. What happened? Applying Pressure 147 . only Kevin did. some. They bought the pool table. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. Tina: Well. the head of the union negotiating team. Tom. Wylma was surprised the next day when Tom started the meeting off with an out-and-out rejection of the wage offer and made a demand for a wage increase of four times the company’s offer.like them to hang out here more.
Wylma: Let’s take a break. as Jim can point out to you. But Tom. Wylma: Jim. This is just what we think is fair. you’ve heard our demand. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. you certainly are aware of our financial situation. but he added some workplace changes that Wylma was comfortable negotiating. Do you think this is reasonable? Jim: (looking uncomfortable) Well. forcing them to reconsider their demand.) Wylma: Now Tom. Your demand is totally unreasonable. you’ve seen our sales projections and production costs. Let’s start again tomorrow morning. When the negotiations began again. Tom: We don’t think so. Right. these are our actual accounting figures. Wylma distributed copies of financial data that showed the company’s current condition. (When they resumed. these are accurate. 148 50 Practical Negotiation Tactics .Tom: Wylma: Nothing happened. Wylma: Tom. Tom had reduced his wage demand significantly. Jim? Jim: Yes. I think you need to rethink your demand.
It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. but the thought that matters. Sometimes the argument got heated. Cory: Madison. When are you going to grow up? Madison: (very emotional) I can’t believe you can say that to me! Christmas should mean something! Cory: It’s just silly for adults to exchange presents. and had children. get over it. so what’s the point? I don’t need another tie! Madison: It’s not the gift. but it is really important to me. Madison: Okay. and it makes me very sad. You are almost 40 years old. When all of their children were small. Stay alert and watch for clues that a negotiation is about to get out of hand. That will just make a bad situation worse. so pressure grew to draw names and exchange gifts. I don’t feel Christmas in the way I used to. Ever since Mom and Dad died. Applying Pressure 149 . Example 1 The four Jones kids grew up. so you can find a way to quickly neutralize it. it was easy to agree on just giving presents to the children. Tempers flare and people say things they shouldn’t out of anger or frustration. We can’t afford to buy each other things we really need. some of the siblings decided they liked giving presents to one another. but as the children grew up and had families of their own. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults.Tactic 38: Break the Tension Tension is inevitable in most negotiations. married. but it should never be at anybody’s personal expense. Humor often works to break the tension of the room. the oldest and youngest Jones children. I want to say something. especially between Madison and Cory.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
This page intentionally left blank
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.
I want to play “Princess” and I want Dara to be the “Prince. was ready to color. and that doesn’t happen without compromise. If I can be the Princess. (In a successful negotiation. they were the last children left in the playroom for the remaining two hours of the day. Okay. 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. Mr. Julie wanted to play “dress-up. they would have to play ball with older children. If there is resistance to compromise. Dara.” Dara.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. but since the other children in their room were not there. C. who was outside with older children. I want to play “Prince and Princess. When that point is reached. or maybe tomorrow. don’t you want to play? We could color before your mom comes.: Julie: Dara: Julie: Girls. however.” Can I color now? You said we would color later. the individual might be afraid that the exchange isn’t equitable). the exchange will be between things of equal value. it is better not to compromise. One day. Example 1 Julie and Dara both attend a local preschool. C. The day-care worker wanted to take them outside for a while so that he could visit with his friend. how about going out to the yard for a while? You can swing or play ball. Then we can color. Isn’t it “later” yet? Right now would be a good time to go outside. At some point. 154 50 Practical Negotiation Tactics . each side must decide whether or not one more compromise will produce an agreement that they will later regret. not the Prince. Both of the little girls liked to play ball when they were outside.: Julie: Dara: Mr.” but she needed Dara to play with her.
or apply for a variance. wouldn’t you like to go outside first? After you swing for a while or play ball. The owner and a small group of neighbors met to talk about these problems. failed to offer the children something that was as important as the plans they had made. They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. neighbors became concerned about the changes to the mall. The owner decided to try for a variance. When his variance application was made public. however. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. They did all the compromising they were willing to do. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. and teenagers attracted by Making Progress 155 . According to the city’s zoning laws. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. the owner had to supply additional parking. and they still had time to color. C.: Julie: Hey. We don’t want to go outside.” No. 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. C. Conclusion The children stayed inside and played dress-up. the parking lot will start to look trashy. The existing parking lot didn’t meet the current parking standards for that size theater. We want to play dress-up and then color. Mr. you can come back in and play “Prince and Princess.Mr.
the north lot is used more. And. not having direct access to the south lot from the street would be unworkable. The neighbors: Owner: 156 50 Practical Negotiation Tactics . Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. I’m afraid. the south parking lot has not been used much. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. even though I’m not adding any parking. You could have all of the traffic enter from the north lot. but it’s not ever full. With the Comedy Club and the grocery store on that end. We hope you’re right. only when that lot is full would cars come around the mall and park on the south side. lights in and out at night can be very annoying. the closest parking to it is along Elm Street. I could put a privacy fence along the east and west—at the backs of your yards. We’d like you to prohibit cars from entering or leaving from the south lot. So. Not having in and out traffic to the south of the mall is just not very practical. as you said. and we’d like to keep it that way. What if I changed the entrance to the middle of the lot? That way. driveways on the south side of the mall are along the east and west side of the parking lot. Right now. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. with your plans to put the entrance of the theater on the east side of the mall. Many of our homes back up to that lot. We’d really like to block off that cut-through and have the theater face the south. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. We’re just not convinced.the theater will start to hang around and maybe wander around our yards at night. In fact. and break in his door. Right now. if I agree to move the theater entrance to the south side.
and make sure the parking lot is kept clean. If the fence was set back the width of a driveway onto your property. there could still be access from the street to our garages—just not to the main parking area. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. Making Progress 157 .The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. But you’re going to have to have some kind of security as well. Teens can form into gangs if left unwatched. and they discouraged patrons from parking on neighborhood streets. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. set back a driveway width. then will you agree not to push for increased private security? Yes. add a new entrance into the south lot. Now you’re talking about considerable expense. Agreed. Conclusion Both sides had to give up something on certain items in order to reach agreement. the neighbors reported that they were very happy with the way it all worked out. And a year after the theater opened. If I agree to move the theater entrance to the south. The compromises were what everybody could live with. however. put a privacy fence along both the east and west sides of the south lot. The fences created a buffer from the lights and noise.
but going out of your way to be friendly is an especially helpful tactic. She learned that everyone in the neighborhood had complained at least once. Mrs. Joan had a new baby. she just didn’t think it was a serious problem. Lonely’s only companionship.m. and I just moved in next door. Joan was already pretty tired. I’m Joan. and that as angry as they were. Your opponent might give in readily. This gives you an advantage. but be friendly. She didn’t believe her neighbors ought to complain about the barking. and because she was hard of hearing. incident was usual or unusual. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a.. just forget it. Lonely: If you’re here to complain about my Rocky. so her neighbor’s barking dog came as an unpleasant surprise. thinking that you will be just as easy to work with on the sticky issues. because you are the one to set the tone for agreement. Mrs. Example 1 Joan was new to the neighborhood. Lonely.m. Present your position forcefully. and what kind of complaints might have already been made.Tactic 40: Be Friendly Being polite. Close your windows at night and don’t listen. Joan decided to at least try and talk to the neighbor. If your opponent is aggressive or angry. professional. 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. respectful. Joan: Hi.m. and started to get upset. and pleasant always enhances one’s ability to reach an agreement. The dog was Mrs. they had gotten nowhere. and didn’t stop until 6:00 a. They might even start to underestimate your negotiating skills. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. 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.
Lonely: Joan: Mrs. I’d like to introduce you to my new baby. Lonely: Joan: Mrs. Well. I might have to talk to you about Rocky. Do you think his age has contributed to some of that? You know. I guess that would be okay. I’ve only got my Social Security. not at all. but she took her baby and went to visit Mrs. isn’t he cute! He’s a handful. The barking at night has been mentioned to me. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. Here’s my little angel. When he does. He’s been keeping me up at night. Why. Lonely again. Maybe I could come back tomorrow and bring him? Oh. (Joan’s sleep was disturbed by another night of barking. I know that some of these people around here don’t like him. no. I can’t pay for something like that. Well. I just wanted to come by and introduce myself. is a really sweet dog. I guess so. too. don’t worry about that. though. I sure hope he starts sleeping through the night soon. I’ve got a friend who is a veterinarian. Lonely: Joan: No. He’s a real comfort to me. I’ll see you. it’s probably because they just haven’t had the time to get to know him. Who. Lonely: Joan: Mrs. I stopped by and visited with him over the fence this morning. Lonely: Joan: Mrs. How long have you had him? Almost eight years now. Mikey. by the way. Making Progress 159 . and I’d like to have him stop by and look at Rocky—would that be okay with you? Well.Joan: Mrs. sure. then. No.) Hi. I need to get the baby home.
he prescribed medicine that gave Rocky a more regular sleep schedule. that’s very understanding of you.S. Lonely didn’t have to pay for the medicine she could not afford. 160 50 Practical Negotiation Tactics . that the press got hold of the story of our company’s activities before we could call you to let you know. Lonely’s needs and arrive at a workable solution to the problem. and Mrs. They anticipated that it would be an unpleasant meeting. The barking all but stopped. Under its new corporate structure. its 150 management and sales employees could continue to work in Happy City. you would have. agreed to meet with the mayor. After Joan’s veterinarian friend visited with Mrs. Company ZZZ. I think that if you could have let me know ahead of time. 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. When he heard the news on the radio. Joan took up contributions from the neighbors.A. U. Here’s how the meeting went: Company ZZZ: We’re very sorry. of course. It’s very difficult to make a move of this type without having it leak out. Company ZZZ: (surprised) Well.. recognizing that the layoffs would be an issue in upcoming local elections. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. Lonely and Rocky.Conclusion Joan’s friendly approach enabled her to understand Mrs. overseeing a factory in Mexico and selling products in the states. the mayor called and asked for a meeting with Company ZZZ officials. Mayor: (very friendly) I understand how these things happen. Hearing about this from the press obviously puts you in a very embarrassing situation.
because I’d hate for us not to make an appropriate pitch to them.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. Mayor: Great! Let me know when we can talk again. and I want them to know that. We recognize that your new corporate owner is a large company located in Malaysia. This strategy worked. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. and the mayor was reelected. Would you be in a position to talk to me about such a deal. Unfortunately. Mayor: Please let me know as soon as you can. Company ZZZ: I’m not sure what to tell you on that. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. or would we need to involve the Malaysia group? Company ZZZ: Certainly. the 150 management/sales jobs did end up moving to Mexico. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. They need a really good deal on the plant price. The buyer is a “disadvantaged business” we have been working with for some time. the city has a potential buyer for your plant building. We just haven’t heard anything yet. You’ve been very understanding about this. so we need to understand how we can affect their decision on keeping an office here. Many laid-off employees did indeed find new jobs at the plant. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. I think I can prevail upon the Malaysia group to let us handle the disposal of the property in such a way as to repair some of the damage our layoffs have created. By the way. Making Progress 161 .
thus becoming a source of embarrassment. or simply “bad faith” methods have been used by the other party. until Susan said they would evenly split what they bought. Alexis agreed. the investigator. Then he played the tape. or used to pressure the other side to agree to certain demands. age 15. The two sisters had saved up a little money so that they could buy souvenirs.00. South Carolina. Susan repeated her demand. threats. the accused.00 to spend. are talking about a possible settlement of the issue. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. 162 50 Practical Negotiation Tactics . who was disappointed to hear that she might propose such a deal. Alexis knew this was not fair. Alexis. He asked his elder daughter about the arrangement. this time in front of a hidden recorder. and Alexis. Jones’s supervisor.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. She borrowed a tape recorder so she could ask her father if this was a fair deal. the younger sister. and Jones. Conclusion For the first time in her life. Michael Wood. Susan denied it. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. Example 1 Susan. age 14. Alexis then played the tape for her father. They might worry that the tapes will be made public or given to others. The effect on the other party might be even more substantial if lies. Fred Adams. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. but Susan had only $20. Susan understood the impact a tape recording can have when it reveals a lie. had $40. Somehow. were on vacation with their parents in Myrtle Beach.
I think I can write my recommendation. he also lost his negotiating position. But by refusing to repeat his answers. Conclusion Jones had knowingly lied when he denied the charges. Mr. I simply asked her to make copies for me as quickly as possible. Appleton both claim they saw the incident and will testify.” meaning something other than copies? No. to quote you. Your request. So you refuse to repeat the answers you just gave us? Yes. He failed to think about what might be the next step. Stuart. You never touched any part of her body? Not even accidentally? No. exactly what you said to Ms. Making Progress 163 . stares.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. “Do what I want. No one could have possibly misunderstood your intentions? No reasonable person. So. Starr. and now I’ll ask you to repeat your answers—on tape. I’ve brought a tape recorder with me. When Adams set the tape recorder on the table and revealed that he had witnesses. Jones suddenly realized that his strategy would not work. you are aware that the next step in this process is to ask witnesses to come forth. Ruiz and Ms. Mr. (a long pause) I want to see my lawyer. Well. and gestures did not have a single hint of sexual implication or innuendo? None at all. And please describe your general manner. And you did not threaten her job if she did not. Jones.
Their dad instructed them to share the candy bar. which certainly is large enough (he naively thought) for two young children to easily share. with the remaining part going to the person who did the dividing.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. because you did the cutting. Oh. one person is given the task of dividing the object(s) into two parts. Realizing the potential of getting the “smaller half. Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. Maria and Roberto: No. Roberto will get to choose which half he wants. of course. take this knife and slice the Snickers into two halves.” the divider. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. Many of us learned this one from our parents: After two people agree to the strategy. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . Maria.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. is usually careful about dividing the object into two equal parts. The second person then chooses which of the two parts they will receive. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. the classic “split and choose” tactic might be the best way to settle the issue.
quickly recognize the fairness of the divideand-choose method. Lots must be at least one acre to be developed. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. both parties. I don’t really care which lakefront lots I keep. Archie is ready to build a retirement home on the property. They have a recent appraisal that values the property at $150. The problem is that one of us will get four lakefront lots and the other will only get three lots. Then I will choose which parcel I want. and wants to divide it into two separate parcels. according to county deed restrictions. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. Making Progress 165 . Archie: I really don’t care either. Archie: That’s true. Deal? Clarence: Sure. Clarence agrees to divide it. They all have a great view and are equally desirable to build on. but is not sure how to arrive at a fair split. There is only one place for an access road that must serve all lots. Example 2 Two friends and business partners. 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. even children. jointly purchased fourteen acres of lakefront property several years ago. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others.Conclusion When two people desire the same object and it is something that can be divided in some way. Give me the map and a pencil. Archie: Here is the map. Clarence and Archie.000. That makes them more desirable. that sounds fair. Clarence: Right. so we should be able to divide the property fairly.
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. Archie chose the parcel with the three lakefront lots. and the second parcel with four lakefront lots and one other lot.
His tactic was to throw in a “nickel” in order to make lots of “dollars.” thus extending the scope of the negotiations. However.” Under store policy. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. “Okay. 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. so the salesperson delivered the suite himself. With a great deal of effort. attach legs. delivery was limited to a small geographical area. 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 . Conclusion The amount the couple spent was fairly large. and the delivery carrier doesn’t set up mirrors. etc. What started out as a single issue is now a combination of a major issue and a much smaller issue. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. Brenda did her part when she said. we’ll take the suite if you’ll throw in free delivery and set up the furniture. Her husband Jason. supposedly the bargainer in the household. he also set up all of the furniture in a second-floor bedroom. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. miles from their home. is expected to dicker over the price.” Many people have witnessed or used this effective negotiating tactic.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.
important item. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. so be prepared to withdraw the nickel and dime item at the hint of trouble. If one party misjudges the situation.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. we’ll agree to Health Plan A with another ½ cent on the pension fund. it can be a dealbreaker. This experienced bargainer said. 168 50 Practical Negotiation Tactics . In one case. “Okay. At the end of negotiations. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars.
and performance evaluations for people to come across as likeable. decision-making meetings. Donna: Okay.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Kathy: I’ll take the pool table. Donna: They match. Donna: I’ll take the bar with stools. You can go first.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. thus creating the impression in others that the good qualities they see are present all the time. Donna: No way! These are the last two pieces of furniture. and all the rest is small junk. I’ll take the color TV. People tend to make an effort to put their best foot forward. Kathy: Then I’ll take the couch and love seat. but they are two pieces of furniture. Kathy: But they are a matched set. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . This creates what is called a “halo effect. Kathy: I suggest we take turns choosing which of these things we want. trustworthy. or knowledgeable.
Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. Let’s call Johnny Ryan. He’s our cousin. Johnny had the “halo” of an honest person. the team representing the city management found itself unable to convince the union negotiators that their newly proposed staffing plan would provide adequate personnel for each firehouse. with a record of labor involvement that included three recent strikes. The union negotiators. He might or might not have also been a good arbitrator. and ask him if the couch and chair should be one item or two. I want the stools.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. I want the love seat. Good idea. (Pause) We’ve got to settle this today and get this stuff moved. Example 2 During a heated labor negotiation. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. what can we do? Give me the couch and love seat! No. What for? Tell him the situation. and if the bar and stools should be one item or two. 170 50 Practical Negotiation Tactics . and he has always struck me as an honest person. I trust his judgment.
This time. He solemnly told the union negotiators that he had been hired to review it. Making Progress 171 . but the power of the so-called halo effect was great. The union accepted the proposal. without any reservations. Two weeks later. the former union president. and that he did. The teams took a weekend break from the stalled negotiations. 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. when negotiations again stalled on a retirement plan issue. the consultant did not speak. Boston was widely known as a totally honest man who speaks his mind. even if the proposal appeared to be valid. as a consultant to review their proposal. Boston went to the negotiation table with the management team. They might have stretched his halo farther than his expertise and experience warranted. the management team hired Sam Boston. but his mere presence caused the union leaders to accept a management point as valid. thus bringing the negotiations to a conclusion. On Monday. the city management again hired Boston. He said he believed that it would work as presented by management.simply did not trust the management team. During the break.
Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Sometimes. $235. but you’ve priced it way too high.000. Sam Jones.000.000. The owner. 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. the other party will ignore or refuse to believe the information. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000. Here’s a list of the five that are about the same size as yours. but we feel that it’s a fair offer. They believe it is overpriced.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. What? That’s $35. $237. but the key is to gather facts that you might need—not just the facts that you will need. They sold for: $225.000. 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.000. We love your house. I’ll get back to you.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. has owned the house for 24 years and is downsizing to a condo. This offer is for more money than any four-bedroom houses on this neighborhood list.500. and we are countering with an offer of $250. $229.000 under the listing price! We realize that. but the right facts presented at the right time can chill or astound and completely turn things around. and $237.
who was not particularly knoledgeable about real estate. That’s the bottom price. We accept.000 each. and did his homework.400 each. I’ll be… Okay.600 for a computer. and wisely chose exactly when to present them in order to make his point. Making Progress 173 . The last 20 were over $2. Hatfield: While I was at purchasing. Well… We have a written counter of $245. Conclusion The Joneses had based their asking price on the advice of a friend. We’ve talked with purchasing and we have the authority to buy seven for $2.600 unless the company president approves. He found facts that supported his position. No one can go over $1. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. Supervisor: Well. Hatfield: My staff has done a lot of research.000. Supervisor: If I okay this purchase order. Example 2 Supervisor: You know the policy. let’s not worry about it. if other departments have ignored the policy. Conclusion Hatfield had anticipated what his supervisor’s position would be. Here it is.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Order the new computers. I’ll get called on the carpet. You can’t pay more than $1. I asked for a list of all new PCs bought this year. and we know that only this model will meet our needs.
If you trust me. reveal misperceptions or lack of knowledge about positions that can be corrected. They can help you identify or better understand what the other side really wants. 174 50 Practical Negotiation Tactics . and two are for my husband. The effective use of probing questions can help achieve a favorable settlement. Example 1 Maureen: What. But I can’t break the limit rule—it is an absolute rule here.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. A maximum of three books can be checked out to a person at any one time. Would I do that? Jenny: Maureen. Maureen: Well. but I don’t set the policy and I can’t make exceptions. Maureen: Well. Otherwise. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. some people would have forty or fifty books out at the same time. I trust you. I can’t check out these four books? Jenny (Librarian): That’s the policy. you know me. I can do that within the rules. can you check out two on a card for him? Jenny: Well. 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. yes. Maureen: So you trust me with the books. I want two of these. but you don’t want to jeopardize your job? Jenny: Yes. I’m sure you would not. Maureen.
and Kenzie. we can’t do that. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. Who does have access clearance? Mike. Brooks. Jay. But this forces us to make decisions without complete information! Yes. They say it’s a security issue. Making Progress 175 . and they don’t even have a use for the sales data. it could kill us. Why? Some policy? Yes. I couldn’t find anyone who knew it. If that data ended up in the wrong hands. Can you get me the number? Sure. Mary and Kenzie? They are 2-3 pay grades below us. Sue. (Next day) Do you have the policy about giving out product sales information? No. Security? Right. Mary. but it’s because you don’t have access clearance. Babu. are you sure I can’t get your information technology people to give us direct information on product sales? No.Conclusion Maureen used probing questions to uncover a way to solve her problem and make it easy for Jenny to stay within the library rules. What’s the policy number or date of approval? I don’t know.
that’s been the policy since I’ve been here. Jack was able to receive clearance as well. When can I get the data? Mark: Today.P.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. I’ll sign now.Mark: Well. Once he discovered that employees in lower pay grades had access clearance. Jack: Here. if we can have access? Mark: I guess so. 176 50 Practical Negotiation Tactics . Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. Jack: Can you ask your V. His probing questions turned up a critical fact. I’ll get it for you ASAP.
Tactic #49 (Final-Offer Arbitration) should bring about a settlement. When multiple issues are at stake and most have been agreed upon during negotiations. this process can easily result in a final settlement.Stage 7: Reaching Agreement he final stage! It might come minutes. They bring it out when a dispute arises. this tactic can produce an agreement. days. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. In this process. 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). When two parties believe they have an oral agreement. and the child learns an important lesson about life. hours. 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. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. If friends or neighbors need to settle something but prefer to avoid the negotiation process. 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. 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. or even months after the first offer is presented. T Reaching Agreement 177 . and the classic Walk Away (Tactic #48).
Tactic 47: The Premature Congratulation This tactic draws its strength from timing. 3) and adds one last key demand to the congratulation sentence. 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. She said.C. His wife had carefully planned her exact “premature” vacation agreement. “I’m thinking of agreeing to your plans for vacation. Larry Snyder gets bored staying in any one place for many days. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. 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. After days and weeks of on-again. but his wife Nancy likes to stay put and relax. D. off-again discussions. Example 2 Negotiations can take a long time and incorporate many issues. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday.” Conclusion The husband was so excited about visiting Washington.C.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. Let’s do go to Virginia Beach and Washington D. Nancy brought up the subject of vacation again after dinner. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . As he hugged her. 2) allows the other side to feel the release that comes with completing the bargain. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation.
he turned on a large warm smile and extended his hand to shake. but held firm on remaining operating principles. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. symbolizing that he was agreeing to the entire final offer. because it makes you pretty vulnerable. I felt the tension in the room. My team had convinced me that doubling the time frame would create a real problem on the shop floor. Ted said. fit. but acceptable. but the other side continued to ask for 60 days.) Here’s what happened: Bob: I knew that the other side was similarly harried. and rested. Reaching Agreement 179 . However. as the negotiator came closer. When the chief negotiator emerged with his team and headed toward my team. (This is a bad position to be in. we made some small concessions on financial matters. but also that they sensed the weariness of my team. we held firm on this and did not discuss the probation issue and many other “dead” issues for days.almost willing to accept any deal. One operating issue involved the probation period for new employees. “…as long as you give us a 45-day probation period. “It was hard for us. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. Therefore.” Bob: Ted timed this perfectly. There were grins and handshakes coming from the other side. My team was afraid we would not even come to an agreement. We all knew that it could come down to agreement or strike. One of the best pieces of negotiation advice is to remain fresh. It was so close. The old agreement specified a 30-day period. but we agree to everything in your final proposal…” Members of my team shouted hooray. In our last offer. The celebration had begun. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes.
knowing that it will probably be agreed to in order to continue in the euphoria of the moment.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. 180 50 Practical Negotiation Tactics . The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. However. the negotiator skillfully finishes his words of congratulations by inserting one last key demand.
He stopped by Pembroke one day to look at the new models. or go after you and perhaps make a new concession in order to get you back to the table. Sue: I remember you. but his Avalon has been a good car. (Vahaly drives the new Highlander home. how did you like it? Jay: Okay. Jay. but I thought I might want to try a new Highlander. right? Jay: Yes. He really likes it. a veteran salesperson. You bought your wife a new van just last year. Sue: Well. but my Avalon is a good car. You had time to assess my car. all from Sue Wilson. I’ve worked with you before. and he can simply buy it when the lease expires. I don’t want to negotiate. Whether you are really bluffing or you are serious. I like it.) Jay: Sue. be sure you think this through beforehand. My name is Jay Vahaly. Your opponent will have to either let you go and run the risk that things are really over. and the lease on my Avalon is about to expire. here are your keys. too.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. if I roll over the lease to a Highlander. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. Jay. 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. Jay: Hi. The next morning. the following exchange occurs.
Jay accepted. $100 more. 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. Sue: I’ll try. Please go back and work out a lower lease payment. These Highlanders are hot items! Jay: Well.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. Sue called him as soon as he walked in the door and offered another $50 break on the lease. I thought I’d get a fair deal. He effectively used the walk-away tactic to let Sue know that he was firm on the price. They’ve talked about retiring in recent months. (15 minutes later) Sue: Well. they came down to $199 more on a thirty-six month lease. Jay—wait. I’m disappointed. Jay. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. Jay.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. but 182 50 Practical Negotiation Tactics . (Jay got in his car and drove home. That was the figure he was looking for. a successful musical instrument sales and rental store. at most. (He walks away) Sue: No. He was prepared to keep his Avalon if the lease was even $1 more than his limit. Let me try again. Sue: Sorry.
Michael: Well.5 million.) 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. visited their store. a local developer. In reality.5 million. they were prepared to accept $5. Larry.both of them love their store. Judy: Larry. Michael calls on them again with a check for $5. our accountant said it’s worth $6 million. Larry: Michael. come out here! (Judy comes out from the back room.5 million. go back to your office.) Larry: Michael is here again. but their continued walkout convinced Michael that they would hold firm. and he is offering us $4. Reaching Agreement 183 . so why are you here? Michael: I’ve discussed it with my partners.5 million for the building. One day. Michael: I have a check right here for 4. He met with Bizannes twice before. which the Bizannes accept. Larry: Yes. Michael Roberts. let’s eat lunch. and I’m prepared to offer you $4. after no contact from Larry or Judy. today. and I’m not interested in less. How’s business? Larry: Great! I’m surprised to see you again. Two months later. (Judy and Larry walk into the back room and close the door. You rejected it. and we gave you our price. with a certified check. Larry. Larry: Judy.0 million. and I only need your building to own it. What do you think? Judy: Larry. I still want to develop this block. you’ve already told us that. Michael: Good morning.
which she has kept in a barn for over ten years. 184 50 Practical Negotiation Tactics . but they wanted to give Jenny $500 for her “share” of the machine. I offered it to you for nothing. In arbitration. 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. Keep the $1. Lynne and Gary bring the restored Singer to Jenny’s house. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. In ﬁnal offer arbitration. which is generally voluntary. Lynne responded that this was their intention. Example 1 Jenny and Lynne are sisters. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. both sides have agreed in writing to accept the arbitrator’s decision. That was the deal. Both involve the use of third parties who are objective. Jenny: No. In mediation. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. 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). We have a few dollars invested in parts and we had fun working on it. I won’t take it. and would be able to restore hers as well. Jenny has an antique Singer sewing machine. Six months later.000.000. Lynne told Jenny that she and her husband Gary have restored two other Singers. One day Lynne dropped by for a visit and the discussion turned to the old Singer. Each party wants their offer chosen. In most arbitrations. Lynne: No. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). They inform her that they put the machine on e-Bay and have an offer of $1. Jenny told them to sell it. Let’s split the money. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision.
Tina. The union’s position could have run into millions of dollars. so I am invoking the finaloffer arbitration ground rule we have in place. the old machine was only worth $50 when Lynne hauled it away. As a brief explanation. binding decision on the three items. Tina: Yes.) Judge Ryan: Here is my written. I have chosen management’s offer to keep it as it is under the current contract. At best. My troops are getting restless.m. we are down to only three unresolved items. based Reaching Agreement 185 . Tina: Good. he did not need to “haggle” with them. Ralph: Right! (Friday at 3:00 p. and meet back here in 72 hours—3:00 p. on Friday. I’ll buy that.m.” Lynne proposed a 50-50 split. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. but we’ve made no movement on any of them since we started. Any increase in value was due to the work of Gary and Lynne. first on the health insurance co-pay. Their father found Jenny’s position to be the most reasonable. after six weeks of negotiating.Jenny: Dad: Okay. Ralph: I know. since he could only choose one offer. Example 2 Ralph: Well. I can’t see any way to reach an agreement. They should get the other $950. Then we both submit our final offers to Judge Ryan within 48 hours. (One week later) I think Jenny’s position is the most reasonable.
Second. but we agreed to this process. I have chosen the union’s final offer. Now let’s get a signed contract. nor why their method was superior. It will only cost $120. reasonable resolution to their last three unresolved issues.Ralph: Tina: on last year’s data. I have chosen management’s offer because the union did not justify why the past practice should be changed. Conclusion The final-offer arbitration process enabled the parties to gain a fast. and an item that large should have been negotiated at the table. I’m sure you realize that we could have taken six more weeks to reach the same point.000—less than 1 percent of the total package. At least we both saved time. money. Finally. 186 50 Practical Negotiation Tactics . Ralph. Well. and stress. No increase has been given for six years. I’m not happy with your decisions. and peacefully finalize a contract that contained several important gains for both sides. on the merit pool distribution method issue. on the clothing allowance.
and while Bill and Paulette had been using an agent to help locate houses. Seller: Yes.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: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay. and felt that they would have to work fast to make an offer before someone else did. Obviously.000. Bill: Reaching Agreement 187 . we won’t be involving our real estate agent. Bill pulled the seller aside. If we shake hands on it right now. everyone is busy grappling with the details of the negotiations. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. At the very least. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. They finally looked at a house they really liked. however. they looked at this particular house on their own. Seller: We’re asking $152. not the furniture. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. and one of the other couples looked very interested. They were not the only couple to come to the open house. and decided to stop by to see if they liked the house. We’d like to make you an offer of $150. During a discussion. Example 1 Bill and Paulette had been house-hunting for some time. all the usual stuff in a sale. The owners were selling the house without a real estate agent. Bill and Paulette fell in love with the house.000. They saw the “For Sale” and “Open House” signs.
Seller: Okay.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. and that the problems with her job performance were. In the section for fixtures and miscellaneous items to be left on the property. When he had the chance to put the deal in writing.Seller: Just a minute. but I’d like to make sure there are no misunderstandings. In her complaint. If it’s what you meant. Conclusion The seller had always intended to leave the garbage disposal. Sign here. the refrigerator. and the two area rugs were specifically included. It worked. Bill: (pleasantly surprised to learn that the garbage disposal.) Seller: So. all window blinds and drapes. that’s what I meant. The supervisor pointed out that he had a staff of 20 or so women. The supervisor assured the employer that there was no basis for her complaint.000. and two area rugs. look this over. Let me just get the standard “offer of sale” form and fill out what I hear you saying. (The seller recorded the offer of $150. in fact. Under the section for appliances to be left on the property. he began to have “problems” with her job performance. he left the price at $150. the hutch. and the two area rugs. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. and when she refused. then we have a deal. and the garbage disposal. he listed an attached hutch in the kitchen. I think we can work something out. the house is yours. she said that her supervisor had repeatedly asked her out. and had been prepared to drop his price to $145. since he probably would have missed them) Yes. a public agency. Example 2 Monica brought a sex discrimination charge against her employer. the hutch. he listed the stove. real.000.
but it’s not standard when a complaint is formally withdrawn. you didn’t mention in the agreement that in exchange for the $100.000 without actually having to prove anything. my client is supposed to formally withdraw the complaint rather than just settle it.there was little basis for the complaint. You’re just trying to make it seem as if your supervisor did nothing wrong. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. Look. settling—What difference does it make to her? She’s getting her $100.000. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. He offered to send settlement agreement papers to her.000. but said that fighting the charges would be a long. Withdrawing. He’s happy to prove that in court. drawn-out. then Monica had to acknowledge that the supervisor did nothing wrong. It might be standard when there’s a settlement. Why’s that? Well. by this time. even though you are paying Monica because we can prove he did do something wrong. and must agree not to tell anyone about the $100. The supervisor insisted that if the employer felt he had to settle. and expensive matter.000. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents.000. And the confidentiality clause is standard. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. But the employer doesn’t want to go through the expense and publicity of a trial. Monica had. even though we’re certain we would prevail. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. I’m He: She: He: Reaching Agreement 189 .
I’ll take your offer back to her and let you know.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. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000 when all that was asked for was $100. but word did get out that a public agency paid $200. There was a confidentiality agreement.She: authorized to pay $200. to his disadvantage. 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.000. Monica accepted the $200.000 and the conditions of the offer.000 just to get the employee to “withdraw” the complaint. 190 50 Practical Negotiation Tactics .
SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. When two friends agree on what movie to see. Think of how often you have said to someone. and contract. talking is not always the same thing as communicating. One way to help the parties abide by an agreement is to put it into written form. when they engage in honest “give and take” negotiations. commitment. “That may be what I said. the three sisters reached an amiable agreement. but some of the decisions were put off for a couple of months. and when they agree to solve problems together. Unfortunately. even an informal agreement benefits from some type of written documentation. If the agreement reached at the time had been put into writing with all three sisters signing it. Reaching an agreement is the first step. depend on the kind of negotiations in which you are involved. Certainly someone has said to you. Putting an agreement into writing serves three purposes: communication. it would have been easier to resume negotiations at a later date. it is much more effective in the long run when the parties enter into “win-win” agreements. but it was not what I meant. rather than attack each other. A Communication Hearing is not necessarily the same as listening. “Oh.” By the same token. As these examples of personal and business negotiations show. operating under an agreement after it has been reached can be even more difficult. The degree of detail and formality of a written document will. reaching an agreement is sometimes a long and difficult process. of course. In Tactic #17 (Package Items). then the parties have to abide by the agreement. Putting the Agreement in Writing 191 . most certainly needs to be in written form.” Clear communication is essential if you want to reach an agreement and have it abided by. I thought you said something else. however. a written document is hardly necessary. However. A union contract.
His mom could more easily enforce the agreement if she had it in writing. seek information. If Jason fails to live up to his side of the deal. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. that is. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. 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. In Tactic #4 (Use Objective Criteria). The receiver has to decode the message being sent by trying to understand and interpret the words. When communication is limited to the spoken word only. pictures. pictures. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. 192 50 Practical Negotiation Tactics . or movements being used by the sender. sounds.944. a couple of months away. And because the sender and the receiver are two unique individuals. When you create a written record of the details of an agreement. you have created something tangible that can be referred to in the future when memories become fuzzy.Communication is a process that involves a sender and a receiver. 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. Who isn’t excited about buying a brand new SUV or truck? Until. he can be reminded of the details because it’s all there in black and white. The sender wishes to convey an idea. or express a thought or emotion through words. nine hundred and forty-four dollars—$22.” In Tactic #14 (Don’t Always Hide Your Weaknesses). sounds. the price is spelled out in the loan document as “twenty-two thousand. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. or movements.
dating it. pulling an agreement in writing. Both parties must receive a benefit or something they personally consider of value. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. and how much. where. before the trip. the address and description of the real property. In either case. one party will work if the other party pays for the work. one party will change behavior in exchange for something of value from the party who wants the behavior changed. WHO? Provide of the full names the parties necessary to the agreement. and put that information into the document.Contract Finally. Carefully and completely describe the subject matter of the agreement. the real estate contract includes information about the buyer and seller. details such as what fixtures stay or what appliances go can be easily overlooked. when. say. WHAT? The written document should clearly describe the item(s) covered by the agreement. When you are ready to commit yourself in writing. One party wishes to buy what the other wishes to sell. You can do this more formally by taking them to court (perhaps as a last resort). and dated agreement. which. If you have agreed to pay someone to house-sit while your family is on vacation. Failure to do so can lead to big problems. your plants die because the house-sitter wasn’t told to water them. and so on in standard contract form. have your spouse also agree to the details of the agreement. protect yourself by having a written. and getting all the parties to sign it usually creates an enforceable contract. Generally. leading to misunderstandings and contract disputes. signed. However. Putting the Agreement in Writing 193 . what. in writing. as many people learn when they purchase a home. 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. which kind of. how many. 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. or it isn’t an agreement—it’s merely the conveying of a gift. Here’s what we mean. ask yourself the basic questions of who.
agreed to the same thing. how much or how many. if that becomes necessary). The more-specific and clear these details are. and having all parties sign it ensures that the parties have. the better. 194 50 Practical Negotiation Tactics . It gives the parties an opportunity to really buy into the deal. dating it. in fact. which one or which kind of.The remaining questions fill in the details of the agreement. Putting an agreement in writing. And it can create a tangible reminder of the deal (or an enforceable agreement. depending upon the deal: when or where.
Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .
Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: 196 50 Practical Negotiation Tactics .
Name of Negotiation Tactic 1. ________________ 6. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 7. ________________ 9. ________________ 8. ________________ 3. ________________ 2. ________________ 4. ________________ 5. ________________ 10.
This page intentionally left blank .
and Law.. Calif. W. W. Inc. J.: New Harbinger Publications. D.. Chicago: Richard D. Domenici. 2001. New York: M. LittleJohn. Labor Relations and Collective Bargaining: Cases. Kennedy. Mediation. Herb. Lewicki. Sharpe. C.: Waveland Press. 1988. The Negotiator’s Handbook. and J. Getting to Yes: Negotiating Agreement Without Giving In. 1991. K. 2001. 2nd ed. 1988. References 199 . Eshelman. New York: Simon and Schuster. M. Gavin. Roger. Fiske. Minton. and S. and J. and B. Getting Together: Building Relationships As We Negotiate. Upper Saddle River. Inc. 2nd ed. 1991. and M. Prospect Heights. David. New York: Basil Blackwell. Cohen. 1989.E. Brown. Maddux. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. New York: Penguin Books. M. You Can Negotiate Anything. New Jersey: Prentice-Hall. R. 1996. University of Missouri: Columbia Press. Inc. Victor. 2004. Saunders. Clark. Gotbaum. 1987. New York: Penguin Books. R. Ill. Inc.REFERENCES Carrell. Inc. 1980. Negotiation Skills. George. 1997. Negotiating in the Real World. The Relaxation and Stress Reduction Workbook. Los Altos. Pocket Negotiator. R. Inc. 1999. New York: Bantam Books. M. Fisher. The Negotiation Handbook. Heavrin. Inc. and C. Fisher. and S. Fuller. New Jersey: Prentice-Hall. Oakland. Irwin. McKay. The Essentials of Negotiation. Patton. Cleary.: Crisp Publications. Upper Saddle River. Patrick J. E. Roger. Calif. 7th ed. Ury. Practice.
Howard. New York: M. Sharpe. Cambridge. Ury. 1996. 1981. New York: Penguin Putnam. Massachusetts: PON Books. 1991. Raiffa. Dudley. Massachusetts: Harvard University Press. Upper Saddle River. Massachusetts: D. Raiffa. Inc. New York: Bantam Books.org 200 50 Practical Negotiation Tactics . 1999. C. Heath and Company. The Mind and Heart of a Negotiator. Cambridge. George. 1987. Tsogas. Inc. 1994. Lexington. New York: Viking Press. 2001. The Eight Essential Steps to Conflict Resolution. Labor Relations in a Global Economy. Lectures on Negotiation Analysis. R. The Art and Science of Negotiation. William. Getting Past No: Negotiating with Difficult People.negotiationsources. Howard. Inc. Shell. Gerald I. Taking Charge/Managing Conflict. L. B. Weeks. G. New Jersey: PrenticeHall. 1982. www.E. Thompson. Stulberg. J. Bargaining for Advantage.Nierenberg. 1998. New York: Simon and Schuster. Inc. The Art of Negotiating.
Human Resource Management. which is located in the greater Cincinnati area. Morehead State University. Dr. Bakersfield. Carrell is Dean of the College of Business at Northern Kentucky University. and the University of Louisville. The Journal of Accountancy Training. The University of Nebraska-Omaha. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky.A. Carrell has held academic positions at California State University. Books published by Dr. HR Magazine. in Economics from the University of Louisville. and MBA and B. In addition. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. Personnel Journal. Personnel. and negotiations. Labor Law Journal.D. In addition to negotiating numerous litigation settlements and contracts. Organizational Behavior and Human Performance. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. and Public Personnel Management. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Business Forum. he was elected to the City of Louisville Board of Aldermen for five terms. Carrell are in the fields of collective bargaining and labor relations. and served as President of the Board and Mayor Pro-tem for three terms. The Personnel Administrator. organizational behavior. M Christina Heavrin J. He received his doctorate from the University of Kentucky. During his academic career he has received awards for both outstanding research and teaching. Marshall University. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . The Academy of Management Review.ABOUT THE AUTHORS ichael R.
Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. 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. an agreement between the State of Kentucky. Jefferson County.park and a successful industrial park in the City’s enterprise zone. the City and a for-profit hospital for guaranteed indigent health care services for city residents. Ms. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. 202 50 Practical Negotiation Tactics .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.