SECTION I: INTRODUCTION

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

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

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50 Practical Negotiation Tactics

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

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This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. some will in retrospect even remember being the victim of one or two of them. with neighbors. at a flea market. they pay the sticker price. • A child wants a new toy now. Who. Unfortunately. Most readers will no doubt recognize some of these strategies. But if you scored 8 or less. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job.negotiator! Pass this book on to someone else who needs it. exactly. accept what is given. 4 50 Practical Negotiation Tactics . such as these: • You receive the wrong order at a restaurant. practical tactics useful in real-life situations at work or at home. few people understand that normal interactions represent bargaining opportunities. • A co-worker asks for volunteers for a new project. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement. with family members. but many of us miss the opportunity to bargain in other situations. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. Instead. or engage in an unproductive argument.

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

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. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. the facts. but I believe it adds value to our house.” To a neighbor you can say. and the tactics that might move the negotiations along. Once a settlement is reached.time to look over this performance review and respond point-by-point. 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. and meet with you again. and use the forms in the back to identify the issues. “I see why you want to cut down the tree. 6 50 Practical Negotiation Tactics . You can then use one or more of the tactics presented in this book to achieve the best possible settlement. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. the parties and their interests. 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.

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

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

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

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

but we won’t be completely tied to operations as they are now. Rick: Well. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Conclusion By masking his real objective (giving himself two more years as president before retiring). you’ll have a guaranteed “in” to protect your people. to tell you the truth. I’m hoping to retire in two years. Surely you’ll be able to “protect” your people if they are as good as you say. I certainly want to do all I can until then to protect my people. would it? Rick: Well. 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. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. Let me get back to you. This wouldn’t have anything to do with your own plans for the future. Rich almost lost the deal. that might work. 20 50 Practical Negotiation Tactics .

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

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

about your bill. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. rather than give them the “advantage. though. Larry: But Will. After all. When you first told me about your project. and he and Larry have always gotten along. Let’s get the guys back in who gave you estimates. When we got into it.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. Things turned sour. Larry: Just make sure you’re comparing apples to apples. It was twice as high as the estimates Larry received from other plumbers before they started the project. and show them the actual work that got done. it became clear that all of those pipes had to be pulled and new ones put in. you are likely to resent them for it and hold out. but was shocked at the amount of the bill. I would have charged anyone else much more. This uncomfortable negotiation followed: Larry: Will. Will: Larry. If they tell us that they either Preparation 23 . Larry was thrilled. based on objective criteria (think property appraisals in real estate). I gave you my “family” rate. If you think that the other party knows more than you do. I was kind of surprised at how high it was. Will is a licensed plumber. I did get some estimates from plumbers. I anticipated much less work. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what.” This can hold up an agreement and cost you in the end. when Will presented Larry with his bill. Larry: Well. Larry had expected to pay him for his time. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. and they were much lower than this. Believe me.

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

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

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

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

thus removing them from the discussion table.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. Then negotiations can resume on the remaining 43 items. other trade-offs are proposed and agreed to until only a few items remain.

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

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

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

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Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). Tactic #43 (Nickel and Diming). In some cases. such as a third-party negotiator. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. and Tactic #48 (Walk Away). A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 .Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. as well as their bargaining history and financial and political positions. you must first evaluate your needs and those of your opponent. cooperative manner. Some of the tactics listed in this book are only suitable for single-session negotiations. The overall strategy chosen does not limit the use of other tactics. Tactic #33 (Bluff). but in practice it will likely influence the whole process. After you have evaluated these factors. Before you can do this. Third parties sometimes have their own hidden agendas. as it can substantially alter the negotiations between two primary parties. such as a buyer and a seller or a city and its union. Identify all outside influences and hidden agendas before you develop your strategy. such as Tactic #19 (Make a First and Best Offer). if you want to begin in a friendly. Are there any outside people who might influence the process. Tactic #12: Find Common Interests can be helpful. A neutral. for example. Be sure you are aware of this at the beginning. might step in and help settle negotiations between a union and administration negotiators. decide whether the negotiations should be continuous. If you prefer to take a firm and direct approach. or one-time-only. 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. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. uncaring approach (Tactic #9: Control Your Emotions. For example. a third party can serve as a mediator (a legislative body. 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.

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

her real estate agent told her that they were probably not going to get a buyer because she is asking too much. After all.000. but not so high as to end the negotiations before they begin. It’s a good neighborhood. She has had it on and off the market for the last five years. We also think that the neighborhood has improved over the last few years.000. Buyer: We really like the house. However. so think this through well ahead of time. six years ago you bought it for $60.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Finally. Be realistic. but certainly not exceptional in any way. as well. your request must not be so low that the other party concludes that you are not negotiating in good faith. but quite frankly. First. we think $160. Carol: Maybe not. Each time. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. with no success. Your demand should be high enough to give you room to compromise. Surely there’s some flexibility in your asking price. If you consider the demand ridiculous. Carol wants $160. Carol: We really want to sell. so do not underestimate what you might be able to achieve. and then look at the demand from your opponent’s perspective. it is likely that your opponent will. You are not likely to get more than you request. but the house has increased in value. Example 1 Carol has been unhappy with the house she and her husband bought six years ago.000.000 is very high. but we simply can’t take less than $160. but the redecorating is of little value. Anyone buying the house would want to change wall colors or add new carpets. one buyer shows some interest. Buyer: The air conditioning might have increased the value of the house. Planning a Strategy 35 . The market hasn’t gone up that much in six years. And I don’t see a lot of difference in the neighborhood. and just refuses to reduce it.

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

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

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

I’ll go home and you can call me if you two can reach an agreement. Peggy: That’s fair. since they are sitting out in the driveway with it. I can use them. threatening. Peggy: I assumed they went with the mower. what’s your price? Andy: $1. etc. I heard that you want to sell your riding mower. I want to keep those. you’re really moving! I hate to see you leave. Half what it cost us new. 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. Andy: No. not for $1.400 if the catcher and can are included. Peggy. only three years ago. and I know how you take care of things. Example 1 So. Andy: No. Andy and Paula: Yes. Paula: Go ahead and ride it home.200. angry. so I’ll take it. Peggy: I’m hearing one thing from Paula and another from Andy. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Peggy: Planning a Strategy 39 .Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. They cost about $300. Andy: I want them… Paula: Go ahead and take them. I don’t know what the deal is now. (bad guy) and implies that his or her side will hold firm on their demands. And take the leaf-catcher attachment and the gas can. we won’t need it at the new condo. while another acts difficult. Andy and Paula. Peggy: So.

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

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

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

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

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

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

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

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

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

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

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

and should therefore handle the problem.investment decision or deal with an error in a bill. 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. he argues that she is the expert. and Point of Service (POS) plans.” If you spend many hours learning about Health Maintenance Organizations (HMOs). 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 . 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. Preferred Provider Organizations (PPOs).

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

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

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

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

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

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

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

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

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

Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000 Buyer Initial Offer ($21. The negotiator firmly states that it is their best offer in an attempt to gain a nice. for example.000) Target Point ($23. as illustrated in the following figure: Seller Resistance Point ($22. “Distributive” bargaining (“win-lose” or “zero sum”) is used. by Michael R. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.000 22 23 24 25 26 27 Initial Offer $28.750–$25. 190–192. This is a practical starting point that will not anger the other side (and might even be expected).000) Settlement Range ($22.500) Fig.750) Target Point ($24.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. (2004). 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. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. such as proposing to continue at the current rate or price. 2: Distributive Bargaining Process. quick agreement.500) Resistance Point ($25. None is as important as the first one. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. Another common strategy is to start with the status quo.500) M $21. 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. Carrell and Christina Heavrin. Exchanging Initial Offers 61 .

The settlement range is the distance between the resistance points.In this example. 62 50 Practical Negotiation Tactics . if the buyer’s initial offer was $25. After initial offers are exchanged. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. the other side does not agree to this value).000 and $28. these points have set the outer limits. yet is positioned well above or below what the party believes to be the opponent’s resistance point (thus avoiding the so-called winner’s curse). See Tactic #18: Agree on Something As Soon As You Can. When the two parties agree to a price within the range. A target point is the desired settlement value a party has set as a goal when negotiations begin. thus producing a true “win-win” negotiation.000. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. and is the range in which most negotiations actually occur. In the example. 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).” but the settlement price.000) is reasonable. usually. each initial offer ($21. it is termed the settlement point – not the “right price” or “fair price. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. 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. thus starting out on a positive note. the process quickly narrows to the range between the initial offers.

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

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

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

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

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

Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. Here’s how it works: Party A exchanges the item for something of true value. it’s a great car and a fair deal. and noticed that none of the vehicles have a green exterior. but in reality.” Party B thinks that A has sacrificed one important objective to gain another. you don’t want your opponent to know what these things are. but he makes a mental note to use color as a “throwaway” item. It is a useful tactic in any negotiations. Mr.” Throwaway items are those things that hold little or no value to you. so be sure you present them in a way that suggests importance. But for this price. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . Salesman: Let me talk to my manager. I know. Hobbs: Yes. according to my figures. quickly checked the dealer’s inventory of sport utility vehicles in stock. not revealing that the item exchanged is a “throwaway. Hobbs. when the two sides are only a few dollars apart. Example 1 The buyer. Salesman: Well. He doesn’t really care about the color of the new vehicle. A has gained something of true value and given up nothing he values in return. according to the Consumer Reports listing of the cost of the vehicle. we’ve got expenses and we need to make some profit. I can go to another dealer and get a green exterior—the color I like best. At a point late in the negotiations. but the key to making it work is to include the throwaways in an initial list of demands OR add it in at a strategic time. but … Salesman: But what? Hobbs: Well. However. this conversation takes place: Hobbs: Yes. you are making $200 profit over the true dealer’s cost. I’ll go get him.

Miguel.. The manager was convinced enough to sacrifice a final $100 for the throwaway.. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I .no it’s not. The days in question are: Exchanging Initial Offers 69 . All three employees must agree to the schedule. The three are sitting at a lunch table to discuss the schedule. and seniority will be used to determine who gets to choose the first day.. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). Conclusion Mr. At the very end of the negotiations.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. Employees will be paid time-and-a half for each of these days. I’ll take the red one for $100 less. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. Then we have a deal. Example 2 The office supervisor told the three internal sales representatives (Jenny. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. Hobbs successfully chose color as a throwaway item.

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

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

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

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

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

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

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. Kathy: I suppose we should look at the school loans next. and XYZ Co. Tim: Well. Tim: Okay. as long as the cost was approximately the same. When we bought them two years ago. ABC usually uses UPS 76 50 Practical Negotiation Tactics . about the house and furnishings. If both of us had been working the year I went to graduate school. an art gallery. and you got your sports car. Example 2 ABC Company. Okay. hold on. and he could pay it in annual installments over a five-year period. I got my convertible. I don’t intend to “stick” you with anything. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. I can hardly argue with that. They also agreed that Tim wouldn’t have to pay her that amount for five years. 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. a wholesale art dealer. I think that makes sense. I think it only fair that I take over repayment of all the school loans. 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. The monthly payments are about the same.Kathy: Hey. yes. we would have paid down our school loans more. Frankly. as you remember. 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. Kathy: Now.

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

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

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

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

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

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

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

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

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

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

the company president. as requested by the human resource director. the sellers obviously would have accepted and Jay and Sue. Both parties felt that they made a good deal. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company. The buyers were very motivated to sell. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No.) Bob: I’d do it for $3. Give us your lowest price. then let them make a counteroffer.000. they had offered $325. I can’t tell our realtor $290.Sue: Don’t be crazy. That’s an insult! Jay: Well. since they had already bought another house.500—half the difference! Sue: Great.000 for each of us—$6. (Bob and Frank meet privately to discuss the situation. (the next day …) Jay: They made us a counteroffer of $307. Exchanging Initial Offers 87 . was very impressed with their presentation. Frank: Me too.000 total. Sue: Then you do it. but who knows what they are planning on offering. realizing they offered too much. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. If. as Sue had first suggested. and the offer was based on fact: the prior negotiated price. Lyle Foxworthy.000. They outlined how they would develop a new employee performance-appraisal system.

Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. They also ended up getting three times ($18.000. Bob: That’s fair. and you two come highly recommended. 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. We’ll do the job. but we can’t pay more than $18. and it would not apply. That is all that’s left in this year’s training budget.) Lyle: Okay.000.000) their minimum price of $6. I’m out of time. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. but we know you must have an amount budgeted for this and we are willing to do it for that amount. Lyle: Okay. What’s the cost? Bob: We want the job. We’ve waited long enough. 88 50 Practical Negotiation Tactics .

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

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

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

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

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

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

500 $2. These are all permanent immediate needs. and we both get things we want.000 $2.000 $1. We have $1. Can we split it evenly? Brooks: Okay. Maureen: No.500 $5. which takes another $3. that makes sense.000! Brooks: Good. Making Counteroffers (The “Give and Take”) 95 .200 $200–$2.000 $5.500 left.# 1 Sod Item Cost $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. which I’d like to keep in the bank. I’d like to spend some of it on lighting upgrades.000 $3. I’ll trade your sidewalk and trees for my whirlpool bath.500 $500 $1. $750 for lighting and $750 in the bank.000 $500 $1.

management and union negotiators found that a “winwin” approach to negotiations worked well. All items to be negotiated and their desired outcome for each item were put in writing for review. Pension Increase 3. During that time. Length of Contract 2. both sides exchanged lists of initial demands at their first meeting. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. even in difficult years. Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. finally agreeing to split the difference on the remaining amount (distributive items). Drug-Testing Program 96 50 Practical Negotiation Tactics . Profit-Sharing 5. The combined lists total thirteen different items: Desired Outcome No. 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). Wage Increase 4.Conclusion By taking the time to list all the items each person wanted and their cost estimates. This year.

one Making Counteroffers (The “Give and Take”) 97 . First. Job Security 13. (#5) a new drug testing program. and removed from the table. eleven of the thirteen original issues to be negotiated had been agreed to. Overtime Assignment 8. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Health Insurance Employees pay 20% Continue cur. 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. Next. signed. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Paid Funeral Leave 9.6.Distributive rent program co-pay Exchange Exchange 7. They proceeded to draft the language to settle these issues. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). and (#9) to continue the often-discussed no strike/no lockout provision. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11).Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. At this point. Because they held opposite positions on these issues. Shift Differential 11. No Strike/No Lockout 10. they began to trade off the exchange issues of similar value and nature. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). Clothing Allowance Based on senior. Finally.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Subcontracting 12. Next.

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

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

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

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

the company entertained the ideas the union had tried to propose before. rather than in the 35 days the current system provides. After a cooling off period. 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. and we’ll strike if we have to.two-step grievance procedure instead of a four-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. You can’t be serious. the two parties did meet again. and actually accepted a three-step procedure. Union: We’re very serious. This time. We’ll see you on the picket line.

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

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

Estimates for building a new orphan home ranged from $12–$15 million. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . City officals: We can probably give you the land for free.Example 2 Kids’ Home.5 million is available for distribution to numerous charities. a non-profit organization for orphaned children. We only have maybe $2 million a year to put toward this charity. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. They are meeting with the city to ask that the land be donated by the city for the project. the foundation’s regular annual grants come to roughly half of their available funds. Kids’ Home: That’s why we brought the foundation’s officials with us. Kids’ Home hoped to get $500. we’re committed in theory. We need the city’s help by allowing us to get the city land donated to us (for free). had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. but the principal of the fund can’t be touched. Foundation officals: Oh. The foundation has a substantial endowment fund. we hope to break ground early next year for the new orphan home. the interest income of around $6. Unfortunately (for Kids’ Home). Kids’ Home: As you know.000 a year for operations. but we need some assurance that you will be able to build and operate the orphan home at that location. Each year. depending on the cost of the land. but we can’t fund all of the $12 or $15 million. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. City: Can’t you borrow the money from a bank to build the facility.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

500! Saleswoman: Yes. I recall the day you drove it out of here. I just can’t imagine the monthly payment on a $45. and compare it to your strategic objective. I love this car.… (20 minutes later) Saleswoman: So.” “affordable weekly payments.000 car. $45. Saleswoman: With your 740 in trade.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. Buyer: Yes. it’s a deal? 126 50 Practical Negotiation Tactics .000 for a Volvo? I bought the one I’m driving for $19. but that was several years ago.” and “low monthly rates” are examples of the salami tactic. Phrases such as “for only pennies a day. 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. Buyer: Way too much! Saleswoman: Well. Example 1 Car buyer: What. if I can give you this car with a $300 monthly payment. do you want to look at something else? Buyer: No. Saleswoman: I’ll be right back.” 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. be sure to add up the total cost. what monthly payment did you have in mind? Buyer: More like $300 per month.

Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. but what else must I buy? Only the basic service for $8.Buyer: I don’t see how you can do that. with your car and $6. and added the trade-in. But my neighbor pays $39. it will be a five-year lease. Let’s see.” she had him—she worked around the $300 slices.000 down.99 per month. down payment. can’t you? Buyer: Yes. Making Counteroffers (The “Give and Take”) 127 .” She decided to cut the $45.000 price into “slices” the buyer thought reasonable. I can afford $6. as promised. but let me see the numbers. You can do that. Sure. Saleswoman: Simple.00 per month. and payout slices to reach the total price she wanted. Once the buyer volunteered that $300 was an affordable “slice. Great! So. do you want HBO? How much? $5.00 per month. I can’t discuss another client’s account. you can get the Disney channel for only $5.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. Instead of a three-year lease. (looks at the numbers) That looks good. I can’t afford that much. do you want Disney? Yes.00 per month for your service.

3.00.99 per month.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. we had that before. I really want the sports channels.00 per month. That’s $5.00! Why? Because he judged the per-slice price to be reasonable. and probably felt much better about the total negotiated package because it was presented in modest individual slices. 2. Conclusion The owner thought his neighbor’s service at $39. But that’s all! Then we’ll hook you up on Monday. 2? How much? $8. Any other kids’ channels? Yes. instead of one total amount. Okay. Yeah. That’s another $5. 128 50 Practical Negotiation Tactics . Thanks. What about the music package? Yes.00 a month. and SI 1. but he agreed to six “salami slices” for a total of $38. and my wife wants the old movies.00 per month was far too much. they asked about the Cartoon Network. The total is $38. Great. Disney is for the kids! The sports channels are for me.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and reached back for the doll. Susie: Daddy didn’t say anything about the shoes. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. that they never fought over a toy in the back seat of the car again!! Example 2 The editor of a local newspaper was planning on writing an editorial critical of a locally elected auditor who had filed a very nasty lawsuit. The defendants contended that the auditor’s actions were politically motivated. and that they had invested and spent the tax dollars wisely. The auditor asked to meet with the editor to explain his position.Andrea: Give me the shoes back. to no avail. charging that they breached their duty in their handling these funds. Daddy said I got the doll on the way to Grandma’s house. so it was worth the risk. The litigation itself had been going on for more than three years.) Dad: Now there’s no more fighting over the doll. 144 50 Practical Negotiation Tactics . Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. in fact. Dolly doesn’t need shoes on in the car. She can have them later. He grabbed it and threw it out the window. and I hope I can convince you of that. Conclusion Dad’s use of a “surprise” tactic was extreme. at great expense to the auditor’s office and the school board. The local newspaper was prepared to urge the auditor to end the litigation. (They continued to argue and whine and pinch each other. I want the shoes. Dad tried correcting them a few more times. but nothing else up to that point was working. he slowed down. Both Andrea and Susie were so shocked by their dad’s action. The tactic was so successful. Dolly has to have her shoes. they didn’t say another word. 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.

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

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

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

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

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

Cory:

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

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

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

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

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

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

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

According to the city’s zoning laws. Conclusion The children stayed inside and played dress-up. We don’t want to go outside. the parking lot will start to look trashy. and teenagers attracted by Making Progress 155 . The owner decided to try for a variance.” No. C. the owner had to supply additional parking. neighbors became concerned about the changes to the mall. failed to offer the children something that was as important as the plans they had made. Example 2 The owner of a small strip mall in the heart of a residential neighborhood was planning to add a small movie theater to the other businesses in the mall. The owner and a small group of neighbors met to talk about these problems. however. or apply for a variance.: Julie: Hey. C. 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. They did all the compromising they were willing to do. wouldn’t you like to go outside first? After you swing for a while or play ball. When his variance application was made public. and they still had time to color. We want to play dress-up and then color. you can come back in and play “Prince and Princess. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. Mr. 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 neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces.Mr. The existing parking lot didn’t meet the current parking standards for that size theater.

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

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

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

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

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

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

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

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

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

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

Archie chose the parcel with the three lakefront lots. and the second parcel with four lakefront lots and one other lot. 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.

so the salesperson delivered the suite himself. delivery was limited to a small geographical area. Jason was having a hard time getting the salesman to lower the price. supposedly the bargainer in the household. His tactic was to throw in a “nickel” in order to make lots of “dollars. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. is expected to dicker over the price. we’ll take the suite if you’ll throw in free delivery and set up the furniture. etc. However. 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 . he also set up all of the furniture in a second-floor bedroom. miles from their home. and the delivery carrier doesn’t set up mirrors. With a great deal of effort. attach legs. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. “Okay.” Many people have witnessed or used this effective negotiating tactic. What started out as a single issue is now a combination of a major issue and a much smaller issue.” Under store policy.Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way. Conclusion The amount the couple spent was fairly large. Brenda did her part when she said. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).” thus extending the scope of the negotiations. Her husband Jason.

At the end of negotiations. we’ll agree to Health Plan A with another ½ cent on the pension fund. 168 50 Practical Negotiation Tactics .important item. This experienced bargainer said. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. In one case. “Okay. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. If one party misjudges the situation. so be prepared to withdraw the nickel and dime item at the hint of trouble. it can be a dealbreaker.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan.

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

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

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

$235. and $237. $237. the other party will ignore or refuse to believe the information. They believe it is overpriced. We love your house. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. $229. The owner.000. I’ll get back to you.500.000. but you’ve priced it way too high.000 under the listing price! We realize that.000. but we feel that it’s a fair offer.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. has owned the house for 24 years and is downsizing to a condo. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. This offer is for more money than any four-bedroom houses on this neighborhood list. Sam Jones.000. but the key is to gather facts that you might need—not just the facts that you will need. but the right facts presented at the right time can chill or astound and completely turn things around. They sold for: $225. Sometimes. and we are countering with an offer of $250. Here’s a list of the five that are about the same size as yours.000. What? That’s $35. (Next day) We’ve reviewed the records you’ve produced.000. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.

who was not particularly knoledgeable about real estate. and we know that only this model will meet our needs. The last 20 were over $2. Order the new computers. Hatfield: While I was at purchasing.400 each. Supervisor: If I okay this purchase order. We’ve talked with purchasing and we have the authority to buy seven for $2.600 for a computer. I’ll get called on the carpet. Conclusion The Joneses had based their asking price on the advice of a friend.000.600 unless the company president approves. Well… We have a written counter of $245. You can’t pay more than $1. Example 2 Supervisor: You know the policy. We accept. Conclusion Hatfield had anticipated what his supervisor’s position would be. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. He found facts that supported his position. I asked for a list of all new PCs bought this year. and did his homework. Making Progress 173 . I’ll be… Okay. if other departments have ignored the policy. Hatfield: My staff has done a lot of research. No one can go over $1. That’s the bottom price.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. and wisely chose exactly when to present them in order to make his point. let’s not worry about it. Here it is.000 each. Supervisor: Well.

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

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

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

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

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

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

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

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

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

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

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

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

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

everyone is busy grappling with the details of the negotiations. they looked at this particular house on their own. however. Bill and Paulette fell in love with the house. Seller: Yes. we won’t be involving our real estate agent.000. and decided to stop by to see if they liked the house. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. During a discussion.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. and felt that they would have to work fast to make an offer before someone else did. They finally looked at a house they really liked. all the usual stuff in a sale. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. and while Bill and Paulette had been using an agent to help locate houses. Example 1 Bill and Paulette had been house-hunting for some time. We’d like to make you an offer of $150.000. Seller: We’re asking $152. 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. The owners were selling the house without a real estate agent. At the very least. and one of the other couples looked very interested. Bill pulled the seller aside. They were not the only couple to come to the open house. If we shake hands on it right now. They saw the “For Sale” and “Open House” signs. not the furniture. Obviously. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. Bill: Reaching Agreement 187 .

The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and had been prepared to drop his price to $145. a public agency. the house is yours. he listed the stove. Sign here. he listed an attached hutch in the kitchen. (The seller recorded the offer of $150. in fact.) Seller: So. Conclusion The seller had always intended to leave the garbage disposal. and the two area rugs. the hutch. she said that her supervisor had repeatedly asked her out. the refrigerator. and when she refused. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. since he probably would have missed them) Yes. Example 2 Monica brought a sex discrimination charge against her employer. In the section for fixtures and miscellaneous items to be left on the property. all window blinds and drapes. and two area rugs.Seller: Just a minute. Let me just get the standard “offer of sale” form and fill out what I hear you saying.000.000 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. real. he left the price at $150. the hutch. and the two area rugs were specifically included. that’s what I meant. then we have a deal. The supervisor assured the employer that there was no basis for her complaint. The supervisor pointed out that he had a staff of 20 or so women. It worked. Under the section for appliances to be left on the property. If it’s what you meant. and the garbage disposal. look this over. In her complaint. When he had the chance to put the deal in writing. but I’d like to make sure there are no misunderstandings. he began to have “problems” with her job performance. Bill: (pleasantly surprised to learn that the garbage disposal.000. I think we can work something out. Seller: Okay.

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

but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. It was made clear that the employer had paid the additional $100.She: authorized to pay $200.000 just to get the employee to “withdraw” the complaint.000 and the conditions of the offer.000. to his disadvantage. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. There was a confidentiality agreement. 190 50 Practical Negotiation Tactics . but word did get out that a public agency paid $200.000.000 when all that was asked for was $100. Monica accepted the $200. I’ll take your offer back to her and let you know.

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

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

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

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

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

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

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

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

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

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

Ms. 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. the City and a for-profit hospital for guaranteed indigent health care services for city residents. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Jefferson County.park and a successful industrial park in the City’s enterprise zone. 202 50 Practical Negotiation Tactics . an agreement between the State of Kentucky. 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. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs.

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