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

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

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

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

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

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

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 .The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. 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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providing them with a very good income for life. 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. They learned that their assets would be easy to sell and were worth more than originally estimated. inventory. and final offer. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. was a power play. The union negotiators convinced the employees that this too.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. selling became an attractive alternative to a strike or prolonged battle. and it now employs 230 craftsmen. and equipment. best. as a last resort. Conclusion Selling their business was the Jaggers’ BATNA. The union negotiators thought the Jaggers were bluffing. With only two weeks remaining before a threatened strike.” which was refused. When negotiations with the union became hopeless. The Jaggers gave the union their “last. The union is demanding wage and benefit increases. notified all the employees of their intentions. 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. as Harvey had for many years. The $56 million dollar business took them 30 years to grow. In this case. For the past two months. his BATNA was not to hold out for more money. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. 16 50 Practical Negotiation Tactics . The threatened strike became a reality. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. but rather what the buyer planned to do with the car. the Jaggers decided to seek buyers for their land. The owners.

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

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

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

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

and go play somewhere! Cybil: Well … Okay. (thirty minutes later) Bailey: So.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. it’s a deal. Bailey: Cybil: Preparation 21 . Cybil. the frog is everybody’s favorite. such as a hotel conference room. girls. I like the frog. Make up your minds. they have the information they need at their fingertips.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. 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. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. they control the breaks and environmental factors. Mother: Hush. too. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. and so on. (Think of the showroom tactics used by car dealers.

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

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

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

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

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

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

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

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

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

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

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

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

000. You are not likely to get more than you request. She has had it on and off the market for the last five years. Buyer: We really like the house. We also think that the neighborhood has improved over the last few years. Carol: Maybe not. so think this through well ahead of time. Finally.000 is very high. The market hasn’t gone up that much in six years. And I don’t see a lot of difference in the neighborhood. with no success. but quite frankly. six years ago you bought it for $60.000. it is likely that your opponent will. Your demand should be high enough to give you room to compromise. If you consider the demand ridiculous.000. but not so high as to end the negotiations before they begin. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. but the house has increased in value. Be realistic. but we simply can’t take less than $160. we think $160. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Carol wants $160. Surely there’s some flexibility in your asking price. but certainly not exceptional in any way. After all. and then look at the demand from your opponent’s perspective. one buyer shows some interest. Buyer: The air conditioning might have increased the value of the house. Each time. but the redecorating is of little value.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Anyone buying the house would want to change wall colors or add new carpets. However. First. your request must not be so low that the other party concludes that you are not negotiating in good faith. so do not underestimate what you might be able to achieve. and just refuses to reduce it. Planning a Strategy 35 . as well. It’s a good neighborhood. Carol: We really want to sell. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.

In any event.000? Carol: We really can’t take less than $160. We’re curious. as to how you think the name is going to benefit you. though. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name.000.Buyer: What if we offered you $100. When Carol refused to budge. Neither Edward Bits nor Edmund Bites. Carol drove off a potential buyer by setting an asking price that was just too high. the buyer took it as a signal that either Carol didn’t want to sell. Inquiries to other law firms were not very helpful because in almost all of the instances. we are certainly interested in your request to “buy” our firm name to use in your city. Here’s how the initial negotiations went: Partners: Well. The other law firm was prepared to pay $100. Example 2 The law firm of Bits & Bites was a Sioux City institution. 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 founders of the firm. but they have no idea what the value of their firm’s name might be in this nearby city. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. The partners are interested in selling the name. or she has unreal expectations. and then $10.000 offer by coming down in price at least a little.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. were still alive. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites.000 immediately. 36 50 Practical Negotiation Tactics . enjoying a statewide reputation for quality representation.

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

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

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

000 in service calls last year alone because your damn people don’t take care of the equipment. For the past three years. She realized that it put her in an impossible negotiating position. Liz: But we still want to renew your contract. Miguel: Well. Miguel: But not at this ridiculous rate. your rate of $3.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down.000 per month is one of the highest in town. Sandy. we’re here to negotiate a new service agreement. 40 50 Practical Negotiation Tactics .Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. we’ve been fairly happy with your responsiveness. You are located outside our primary service area. Miguel: I’ve figured $4. Sandy: What? First of all. and your training programs. firm offer if they decided to continue negotiations. causing our reps to spend hours on the road. We estimated that it has cost us more than $50. the quality of the technicians’ work. perhaps even unintentionally. She very wisely recognized the routine and forced Andy and Paula to give her a clear. your account has taken too much time. Let’s talk. And we want to change the 24-hour service response time to 48 hours. And cut the training hours from 55 to 20. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). And we need to add a clause that holds your company responsible for machine damages. Sandy.

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

This will put you at a distinct disadvantage from this point on. made some very good purchase decisions for his small business. 42 50 Practical Negotiation Tactics . He had. 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. in fact. because we have had a sick relative out of town and we used long distance a lot this past month. He decided that the best approach was to act indignant when he spoke to the company representative. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. he was very unhappy. 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.00 a minute. I noticed this. 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. such as deals on computer packages and phone services.10 a minute rate at my office location. The fault was partly his because he did not stay on top of changes. 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.Tactic 9: Control Your Emotions Stay cool. How may I help you? Hello. So. I have a problem with my recent bill and my billing rate. It seems that the rate you are charging me on my home phone is $1. but I recently was sold a $.

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

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

they would become dissatisfied with their pay and want their base pay increased. Owner: Now. The employees’ negotiator finally decided to use “indignation” to break the stalemate. and it’s getting old. and you just can’t be too careful. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. 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 told the employees that he was worried that during the overtime shifts. 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. 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. lesssenior employees might be at greater risk of injury because they have to handle explosives. and that they should be asking for a fairer base wage for the work they do for you. and it’s not what we’re even talking about. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. On those overtime shifts. I’ve got to have the employees with the most experience to protect this place. that’s just not fair. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . They will be putting the plant AND their fellow workers at risk by not being here. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks.

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

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

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

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

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

Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. you gain an edge when negotiating a new plan for your company. 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 .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. and should therefore handle the problem. Preferred Provider Organizations (PPOs).” If you spend many hours learning about Health Maintenance Organizations (HMOs). and Point of Service (POS) plans. he argues that she is the expert.

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

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

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

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

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

Allan: (One hour later. 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.) I understand the December 31 deadline. and I don’t like it. we can’t get the reports we wanted in 48 hours. Conclusion Knowing the external deadline gave David a significant negotiating edge. Obviously. Planning a Strategy 57 .

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

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

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

Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse.000) Target Point ($23.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.750) Target Point ($24.500) Fig. for example. quick agreement.500) M $21. The negotiator firmly states that it is their best offer in an attempt to gain a nice. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.750–$25. Carrell and Christina Heavrin. such as proposing to continue at the current rate or price.000 22 23 24 25 26 27 Initial Offer $28. 2: Distributive Bargaining Process.500) Resistance Point ($25.000) Settlement Range ($22. as illustrated in the following figure: Seller Resistance Point ($22.000 Buyer Initial Offer ($21. 190–192. by Michael R. Exchanging Initial Offers 61 . (2004). This is a practical starting point that will not anger the other side (and might even be expected). 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. “Distributive” bargaining (“win-lose” or “zero sum”) is used. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). 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. Adapted from Labor Relations and Collective Bargaining. Another common strategy is to start with the status quo. None is as important as the first one.

62 50 Practical Negotiation Tactics . Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out).In this example. You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table. See Tactic #18: Agree on Something As Soon As You Can. thus starting out on a positive note. the process quickly narrows to the range between the initial offers. 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. the other side does not agree to this value). Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse.000) is reasonable. each initial offer ($21. it is termed the settlement point – not the “right price” or “fair price. if the buyer’s initial offer was $25. and is the range in which most negotiations actually occur. When the two parties agree to a price within the range. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. The settlement range is the distance between the resistance points. usually. 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. After initial offers are exchanged. these points have set the outer limits. In the example. yet is positioned well above or below what the party believes to be the opponent’s resistance point (thus avoiding the so-called winner’s curse). thus producing a true “win-win” negotiation.000.000 and $28. A target point is the desired settlement value a party has set as a goal when negotiations begin.

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

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

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

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

the parties returned to the room. (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. let’s move on.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 think that what you’re proposing is a really good idea. we’ll be back in 5 minutes. and the parties were able to complete their negotiations.) I’m sorry. Good. Now. I thought that the contract would cover one or the other for everyone. Exchanging Initial Offers 67 . Negotiator #1 regained his footing. and I apologize for explaining it poorly. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and houses in this area sell fast. but you feel cursed because you gave away too much. then $320. and that two similar ones on the same street sold for $330.e. That’s a fair price. never give them their asking price. because you have settled quickly. is the most (or least) the other side will accept. 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. offer $150.000. of course. 2) Start out with an old number. We don’t know how anxious they are to sell or if they know the market. such as last year’s price.000 for a house that sold for $185. The other party will probably come back with an equally ridiculous offer. which can be very useful). Let’s low-ball them and offer $290.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.000—what they paid for it. Jay: No. think things through before you make or accept the first offer. or 3) Make an unrealistic offer (i. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. particularly if you don’t know the other party’s “settlement range.) To prevent this from happening.000 this year. Their realtor told them that it sold for $290. thus requiring greater concessions on both sides.000 three years ago). before someone else does. Jay: No. 86 50 Practical Negotiation Tactics .” The perfect first offer.000 and $337.. The sellers must be willing to come down a few thousand … Sue: Well.000. and you cannot withdraw it in good faith. Avoid giving away too much at the outset. They found one they both like that lists for $325. at minimum cost.000 two years ago. 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. Sue: Let’s offer $325.000.” (You have won a settlement.

They outlined how they would develop a new employee performance-appraisal system. and the offer was based on fact: the prior negotiated price. Sue: Then you do it.000.000.500—half the difference! Sue: Great. the company president. Lyle Foxworthy. I can’t tell our realtor $290. The buyers were very motivated to sell. as Sue had first suggested. then let them make a counteroffer.) Bob: I’d do it for $3. (the next day …) Jay: They made us a counteroffer of $307. but who knows what they are planning on offering. as requested by the human resource director. That’s an insult! Jay: Well. was very impressed with their presentation.000 total.Sue: Don’t be crazy. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company. (Bob and Frank meet privately to discuss the situation. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. Give us your lowest price. the sellers obviously would have accepted and Jay and Sue. If.000 for each of us—$6. realizing they offered too much. Exchanging Initial Offers 87 . Both parties felt that they made a good deal. they had offered $325. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. since they had already bought another house. Frank: Me too.

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

what appears to be an outer limit of the settlement range when the process starts can. labor negotiators. In some negotiation situations. Experienced negotiators seldom reveal their exact priorities and objectives. is likely to pull away from the table. because if you do not at least appear to be flexible. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). Expect that the “total pie” will be different from what it was at the outset. One or more parts might be acceptable or indicate movement from their previous positions. which is often the case. be enlarged (see Tactic #27: Expanding the Pie). and attorneys use tried and true tactics in giving and receiving offers. which would most likely weaken their position (see Tactic #26: Keeping Secrets). the other party. and do not flatly reject it because it is not your offer.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. When the other party makes an offer. seeing no common ground. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. Also. do not dismiss it because it is not all you want. but possibly of different values to your opponent. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. Skilled negotiators such as salespeople. carefully evaluate an opponent’s offer. T Making Counteroffers (The “Give and Take”) 89 . It has often been said that the key to negotiations is to be flexible (see Tactic #25). Instead. in fact. 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.

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

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

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

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

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

000 $500 $1.000! Brooks: Good. which takes another $3. and we both get things we want. Making Counteroffers (The “Give and Take”) 95 . $750 for lighting and $750 in the bank. These are all permanent immediate needs.500 left.500 $5. I’d like to spend some of it on lighting upgrades. which I’d like to keep in the bank.# 1 Sod Item Cost $1.200 $200–$2.000 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.500 $2. Can we split it evenly? Brooks: Okay. Maureen: No. I’ll trade your sidewalk and trees for my whirlpool bath.000 $3.000 $2. that makes sense. We have $1.000 $5.500 $500 $1.000 $1.

Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. During that time. Wage Increase 4. 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). All items to be negotiated and their desired outcome for each item were put in writing for review. finally agreeing to split the difference on the remaining amount (distributive items). Length of Contract 2. both sides exchanged lists of initial demands at their first meeting. This year. Profit-Sharing 5.Conclusion By taking the time to list all the items each person wanted and their cost estimates. 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. management and union negotiators found that a “winwin” approach to negotiations worked well. even in difficult years. Pension Increase 3. Drug-Testing Program 96 50 Practical Negotiation Tactics .

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

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

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

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

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

the two parties did meet again. 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. Union: We’re very serious.two-step grievance procedure instead of a four-step procedure. rather than in the 35 days the current system provides. This time. and actually accepted a three-step procedure. 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. 102 50 Practical Negotiation Tactics . We’ll see you on the picket line. You can’t be serious. the company entertained the ideas the union had tried to propose before. After a cooling off period.

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

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

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

106 50 Practical Negotiation Tactics . 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. 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. I’ll contact the state tomorrow. 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. 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. We wouldn’t want to make such a commitment to a bank. We probably would not be able to participate. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. We’re not familiar with that program. If we borrowed $15 million at 10% interest.Kids’ Home: Borrowing the money gets very expensive. but we’re willing to look at it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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I’m not going back to him again to discuss this program.000 for advertising. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . and clean it. Example 2 Roberto: I can’t properly advertise this new program with a $5. I’ll find a way to do without one part-time person. I’ll approve $15. Three. or we lose a whole year. Felipe: Sorry. Take it or leave it. she chose the one she most preferred. I’ll approve $15. but no TV or anything until it’s done! (pause) Okay. Amber resisted the chore she hated. but I will cut your travel budget out completely. Clean it after your game. Roberto: But it will never generate enough interest if no one knows about it. But when her mother laid out the schedule and gave her alternatives. that is enough time.000 budget! I need at least $20.000 in the budget. keeping her Saturday free. I have three hours. I can’t help. but the company president does not share your optimism on this program. (long pause) Felipe: Let me give you three options: A. Felipe: (Roberto’s supervisor) Sorry. Use the $5. but I will cut your staff by one part-time person (or $15. Roberto: Well.000.Amber: row before your basketball game. Conclusion At first. Roberto: But I need to start the direct mail and newspaper ads within two weeks.000). B. I can accept B. I’ll do it now.000 for advertising. Felipe: Well. or C.

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

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

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

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

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

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

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

you are taking a risk on the costs increasing.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. the company can make your pensions much better.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. what they really need is for you to cover the costs of dependent coverage. However. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. and we know that with this new contract term of five years. This would be a better benefit in the long run. then the pension benefits overall will increase by $10. we know that health insurance premiums might skyrocket.000. And we cannot afford that $1. Over the next five years.000.000. As best as we can tell. The pilots want dependent coverage paid for by the company. the airline paid a total of $200.000 a year over the next five years? Company: Yes. as it has always been.000. and the premiums for health care just keep going up.000 to cover the premiums for dependent coverage. Company: This could not come at a worst time for us. dependent coverage could cost us $1.000 (which we reasonably should have expected to pay in premiums) in the pension account now. With long-term planning and investments. Over the last five years. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. Pilots: Look. This is just a cash-flow problem that your members have to understand. But only a few of our people are close to retirement age. with all wage and operations issues resolved fairly early. The airline industry is in a slump. that would be the minimum increase. 124 50 Practical Negotiation Tactics .000 figure. If we invest the $200. The company wants to trade paying for dependent coverage for better pension benefits. and are willing to keep pension benefits the same. The projections for the next five years were that these costs would increase to about $1.000.000.

that would be worth it. Company: Then it’s okay with us. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. then those funds will not be available to invest in the pension plan.Pilots: But you do have the $200. however. so the decision to be flexible was a good one.000 to either pay one year of the premiums. with a cap of $200.000? Once the cap is met. the company will not be expected to give us this benefit. and the pilots knew what to ask for when the contract expired. If we can get two or even three years out of the $200. The health insurance market stabilized. can we agree to a year-to-year agreement on dependent coverage. Company: If the company spends the $200. if they were that high.000.000 available.000 actually carried them through four years. The pilots expanded the range of options. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.000 the first year on the premiums. by agreeing to let the company cap its exposure for dependent health coverage. Making Counteroffers (The “Give and Take”) 125 . It initially believed that the only option was to put that money into pension benefits. The dependent coverage is more important to us now than the pension benefits. or invest in the pension plan? Company: Yes. we are. Conclusion The company was committed to limiting its exposure to $200. The $200.

be sure to add up the total cost. If you are on the receiving end of such a tactic. I love this car.” and “low monthly rates” are examples of the salami tactic. do you want to look at something else? Buyer: No. if I can give you this car with a $300 monthly payment.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party.500! Saleswoman: Yes. Phrases such as “for only pennies a day. Example 1 Car buyer: What. I just can’t imagine the monthly payment on a $45. but that was several years ago. $45. it’s a deal? 126 50 Practical Negotiation Tactics .000 car.000 for a Volvo? I bought the one I’m driving for $19. Saleswoman: I’ll be right back. what monthly payment did you have in mind? Buyer: More like $300 per month. I guess it would be around $600 per month. Buyer: Yes. Buyer: Way too much! Saleswoman: Well. I recall the day you drove it out of here. Saleswoman: With your 740 in trade.” “affordable weekly payments.… (20 minutes later) Saleswoman: So. and compare it to your strategic objective. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So.

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

Any other kids’ channels? Yes. but he agreed to six “salami slices” for a total of $38.99 per month. But that’s all! Then we’ll hook you up on Monday. Okay.00 a month. Thanks. 128 50 Practical Negotiation Tactics .00 per month. Yeah. Great. That’s another $5.00. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00! Why? Because he judged the per-slice price to be reasonable. instead of one total amount. What about the music package? Yes. Conclusion The owner thought his neighbor’s service at $39. I really want the sports channels. and SI 1. 2? How much? $8. and my wife wants the old movies. 2. The total is $38. they asked about the Cartoon Network. 3.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. That’s $5. we had that before.00 per month was far too much. Disney is for the kids! The sports channels are for me.

it is effective. 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). When both sides believe that each has equally strong positions. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. Humor might not look like pressure. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). and it can destroy your credibility. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. but others will walk out the door. turned off by the tactic. the traditional car salesperson might tell the buyer. In some cases. Applying Pressure 129 . but in tense. which can be successful if the opposing team has two or more members who hold different views of an issue. angry negotiations. and the use of humor. pressure tactics should probably be avoided. A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. but it can be used effectively when one party clearly has an edge. For example. It should be used with caution: It can end negotiations immediately. however. Tactic #33 (The Bluff) is a classic pressure tactic. today. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. so are you ready to make a deal? This might convince a few buyers. “I can only guarantee this price until 6:00 p.m.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Michael Wood. He asked his elder daughter about the arrangement. who was disappointed to hear that she might propose such a deal. or simply “bad faith” methods have been used by the other party. or used to pressure the other side to agree to certain demands. but Susan had only $20. and Alexis.00 to spend. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. Alexis agreed. Alexis then played the tape for her father. Susan repeated her demand. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. are talking about a possible settlement of the issue. She borrowed a tape recorder so she could ask her father if this was a fair deal.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. age 15. until Susan said they would evenly split what they bought. the younger sister. 162 50 Practical Negotiation Tactics . South Carolina. Fred Adams. Example 1 Susan. Alexis knew this was not fair. age 14. Susan denied it. Alexis. Somehow. They might worry that the tapes will be made public or given to others. threats. Jones’s supervisor. the investigator.00. The two sisters had saved up a little money so that they could buy souvenirs. Conclusion For the first time in her life. The effect on the other party might be even more substantial if lies. and Jones. this time in front of a hidden recorder. Then he played the tape. were on vacation with their parents in Myrtle Beach. had $40. the accused. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Susan understood the impact a tape recording can have when it reveals a lie. thus becoming a source of embarrassment.

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

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

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

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

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

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

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

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

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

$229. Sometimes.000 under the listing price! We realize that. We love your house.000. The owner.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . They believe it is overpriced. I’ll get back to you. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. 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. What? That’s $35.500.000. $237. but the key is to gather facts that you might need—not just the facts that you will need. (Next day) We’ve reviewed the records you’ve produced. $235. but the right facts presented at the right time can chill or astound and completely turn things around. but you’ve priced it way too high. has owned the house for 24 years and is downsizing to a condo.000.000. Here’s a list of the five that are about the same size as yours. but we feel that it’s a fair offer. This offer is for more money than any four-bedroom houses on this neighborhood list. Sam Jones. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.000. and we are countering with an offer of $250. the other party will ignore or refuse to believe the information. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. and $237. They sold for: $225.000.

Conclusion The Joneses had based their asking price on the advice of a friend. He found facts that supported his position. and we know that only this model will meet our needs. Well… We have a written counter of $245. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. I’ll be… Okay. Hatfield: My staff has done a lot of research. if other departments have ignored the policy. I asked for a list of all new PCs bought this year. Order the new computers. Supervisor: Well. Hatfield: While I was at purchasing. The last 20 were over $2.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. That’s the bottom price. let’s not worry about it. Making Progress 173 . We’ve talked with purchasing and we have the authority to buy seven for $2. You can’t pay more than $1.000 each.600 for a computer.000. Conclusion Hatfield had anticipated what his supervisor’s position would be.400 each. Here it is. No one can go over $1. who was not particularly knoledgeable about real estate. Supervisor: If I okay this purchase order. and did his homework.600 unless the company president approves. Example 2 Supervisor: You know the policy. I’ll get called on the carpet. We accept.

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

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

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

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

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

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

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

You bought your wife a new van just last year. right? Jay: Yes. (Vahaly drives the new Highlander home. You had time to assess my car. how did you like it? Jay: Okay. Jay. here are your keys. He really likes it. if I roll over the lease to a Highlander. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. Whether you are really bluffing or you are serious. I like it. My name is Jay Vahaly. The next morning. Your opponent will have to either let you go and run the risk that things are really over. but his Avalon has been a good car. all from Sue Wilson.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. but I thought I might want to try a new Highlander. I don’t want to negotiate. too. Sue: I remember you. and he can simply buy it when the lease expires. Jay: Hi. but my Avalon is a good car. what can you do on a 36-month lease? Reaching Agreement 181 .) Jay: Sue. or go after you and perhaps make a new concession in order to get you back to the table. be sure you think this through beforehand. Jay. Sue: Well. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. the following exchange occurs. He stopped by Pembroke one day to look at the new models. and the lease on my Avalon is about to expire. a veteran salesperson. I’ve worked with you before.

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

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

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

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

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

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

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

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

000. I’ll take your offer back to her and let you know. but word did get out that a public agency paid $200.000 when all that was asked for was $100. 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. 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.She: authorized to pay $200. Monica accepted the $200. to his disadvantage. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000 and the conditions of the offer.000 just to get the employee to “withdraw” the complaint.000. 190 50 Practical Negotiation Tactics . It was made clear that the employer had paid the additional $100.

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

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

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

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

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

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

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

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

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

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

Recently voters approved the merger of the City of Louisville and Jefferson County Governments. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs.park and a successful industrial park in the City’s enterprise zone. an agreement between the State of Kentucky. Ms. 202 50 Practical Negotiation Tactics . Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. the City and a for-profit hospital for guaranteed indigent health care services for city residents. Jefferson County.

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