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SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
but many of us miss the opportunity to bargain in other situations. Instead. such as these: • You receive the wrong order at a restaurant. • A co-worker asks for volunteers for a new project. But if you scored 8 or less. accept what is given. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job.negotiator! Pass this book on to someone else who needs it. few people understand that normal interactions represent bargaining opportunities. exactly. with family members. Unfortunately. some will in retrospect even remember being the victim of one or two of them. or engage in an unproductive argument. practical tactics useful in real-life situations at work or at home. they pay the sticker price. Who. • 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. 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. Most readers will no doubt recognize some of these strategies. 4 50 Practical Negotiation Tactics . at a flea market. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement. with neighbors.
” When you recognize that something can be negotiated. perhaps the employee can say. Decision-making ability. such as price. For example. that can be negotiated. 3. There are flexible elements to the situation. What are my alternatives?” During an employee evaluation. Your boss reviews your past year’s performance. “I’d like Introduction 5 . The parties involved can make a decision by themselves. condition. Mutual goals. some resolution must be negotiated. A neighbor wants to remove an old tree on your property line. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. A service repair person gives you an estimate on some work.• • • • • • • A hotel clerk tells you that your reservation was lost. Interdependency. and each side can involve one person or several people (each representing one “side” of the issue). 2. In some situations. In some circumstances. The parties are interdependent: what one party does affects the other. Multiple parties. perhaps you can say to a hotel clerk. A teenager wants to buy his/her first car. one party is only allowed to follow policy or must wait “until the manager arrives. since you lost my reservation. Your spouse wants to buy new furniture. 4. or items of value. Each one has the five key characteristics necessary for bargaining: 1. be prepared to bargain. There must be a conflict in the sense that what one wants is not what the other wants. “Well. 5. time. you must advise the other party of your intention to negotiate. Two or more sides are involved. and I don’t have time to wait for another. Both sides want a settlement. Flexibility. The parties involved are interested in reaching a common goal. A friend is about to select the movie he/she wants everyone else to see. Therefore. All of these situations are opportunities to negotiate.
negotiations can be concluded with a written or oral agreement. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. “I see why you want to cut down the tree. and meet with you again. 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.time to look over this performance review and respond point-by-point. Once a settlement is reached. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. the facts. but I believe it adds value to our house. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. Keep this book handy when preparing for any type of negotiation. the parties and their interests. 6 50 Practical Negotiation Tactics . and use the forms in the back to identify the issues. and the tactics that might move the negotiations along.” To a neighbor you can say. the other party will realize that you intend to negotiate and do not accept the situation.
have you ever required a written agreement covering chores. The last time you received sub-par service or food in a restaurant. In the past. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. allowance. Do you routinely negotiate for better accommodations when you check into a hotel? 3. or child. Yes No Self-Assessment Quiz 1. etc.? 10. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. Do you wish you could negotiate a change in your job duties or salary? 7.How good are your negotiation skills? Place a check in the box that applies to you. do you believe that you negotiated the best possible deal? 4. In the past. When you purchased your last home or car. When making a major purchase. do you routinely negotiate a last add-on before you close the deal? 9. but you did not? 8. As a parent. or division of household duties. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . did you request appropriate compensation? 6. spouse.
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The “Quick Model” approach outlined below is good for simple negotiations. decide how complicated the issue is. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). thus allowing each side to achieve one of their goals. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. etc. The Negotiation Process 9 .) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. the process will probably take several weeks or months as the parties move through all the stages. state. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). Examples: • office location (city. one for another. including those that are less obvious. the process will be fairly straightforward.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. On the other hand. They’re referred to as “win-win” because each side can achieve their goal. If it is a relatively informal situation.
Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. rearranged. Depending on the situation and the parties involved. What one side gains. or even skipped altogether. the other side loses. Examples: • an item sold by one party and bought by the other • wage increases won by one side. 10 50 Practical Negotiation Tactics . The Comprehensive Model Negotiation is more of an art than a science. stages can be combined. but feel free to try them when they seem most appropriate to your specific circumstance. 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.
Information.The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
16 50 Practical Negotiation Tactics . best. The $56 million dollar business took them 30 years to grow. The union negotiators thought the Jaggers were bluffing.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. was a power play. In this case. The threatened strike became a reality. The owners. inventory. For the past two months. They learned that their assets would be easy to sell and were worth more than originally estimated. and equipment. The union is demanding wage and benefit increases. With only two weeks remaining before a threatened strike. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. the Jaggers decided to seek buyers for their land. The Jaggers gave the union their “last. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company.” which was refused. but rather what the buyer planned to do with the car. 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. selling became an attractive alternative to a strike or prolonged battle. as Harvey had for many years. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. providing them with a very good income for life. and it now employs 230 craftsmen. When negotiations with the union became hopeless. and final offer. The union negotiators convinced the employees that this too. notified all the employees of their intentions. Conclusion Selling their business was the Jaggers’ BATNA. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. his BATNA was not to hold out for more money. as a last resort.
How much are you thinking it’s worth? John: Well. sure. I guess I couldn’t take less than $20. Are you finally ready to sell it? Yes. it’s to your advantage to know what is behind a seller’s decision to put it on the market. 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. because if the company does not provide relocation benefits. If you are the party making the offer on the house. you know. A person who has to sell her home because her company is relocating her. John: Tom: John: Tom: Tom. Just as important is the why. I’ll have to think about that. 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. what the other party’s desired outcome is. she might have to take a lower offer just to be able to move. for example. Preparation 17 .000. so Tom was surprised when John called him out of the blue one day with a proposal. I think so. it’s still perfect. you still interested in my rifle? Of course. Gosh. Example 1 Tom had always admired John’s 1861 Confederate rifle. and told John several times to let him know if he ever wanted to get rid of it. John assured Tom that this would never happen. This is a good thing to know. at some point. I’ve been thinking of getting rid of it for a while. What changed your mind about getting rid of it? It is still in perfect condition. right? John: Sure. Make me an offer. It is extremely rare—one of only 100 made with that bore and handle. Tom: $20.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know.000? That’s more than I planned. Just running out of space.
has begun negotiations to sell his firm to BigManu Company. Without some trust. let’s do it. Rick needs to remain president of the company for the next two years. Was Tom interested? Tom declined. but then he will be happy to retire. I don’t think I can go higher than $18. and we’re committed to keeping it open as a major division of our company. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. I’ve been thinking about your offer. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position.Tom: Okay. When Tom found out why John decided to sell his rifle. fearing that this will put all of his employees out of work. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. However. we 18 50 Practical Negotiation Tactics .000. but I could get the money to you right away.500—we’d have a deal. He is two years away from retiring and does not want his business to fail before he does. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. we really want to buy your company. Well. The sale price for the company has not yet been agreed to. Tom: Okay.500 had an 1861 for sale. John: Well. parties to a negotiation are not likely to reach agreement. BigManu: Rick. Conclusion Tom entered into the negotiations suspicious of John’s motives. and now the two-year requirement has become a stumbling block in the negotiations. Example 2 Rick. if you could come up a little—say $18. let me think about it and I’ll get back to you.) Tom: John. No longer worried about John’s motives. the owner of a small manufacturing company. Tom now felt comfortable negotiating the price. but thought this might explain John’s sudden interest in selling the rifle. it made the negotiations easier.
You’ll be in place to participate in our employment decisions. you will have a say in how the employees are treated. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. I just can’t go through with this sale. they decided to put their price on the table and revisit the issue after a price was agreed upon. and we think it’s an odd request anyway. Without this commitment. (Between negotiating sessions. my employees will prove to you that they are uniquely able to run this place. We still can’t find a way to do it. and I hired every one of these people. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you.) BigManu: Okay. and he accepted it subject to agreement on the two-year employment guarantee clause. I need to give them some sense of comfort if this deal goes through. Let’s talk later. In hopes of pushing the deal forward. I just don’t want it to change after I’m gone. BigManu: We just don’t see a way to give you what you want on this. Working as a division of your company. We just can’t make good operational decisions with our hands tied. Rick: These people are the best at what they do. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame.cannot guarantee to you that ALL of your employees will be retained for two years. The price they gave Rick was actually more than he had expected. Within the parameters of efficiency and effectiveness. Rick: I built this business from the ground up. Preparation 19 . BigManu: You know we want you to stay on and manage this division for us. let’s talk about the job guarantee you wanted. I just want them to have a real chance to show you how good they are.
Let me get back to you. but we won’t be completely tied to operations as they are now. that might work. This wouldn’t have anything to do with your own plans for the future. Surely you’ll be able to “protect” your people if they are as good as you say. would it? Rick: Well. you’ll have a guaranteed “in” to protect your people. I certainly want to do all I can until then to protect my people.BigManu: We intend for you to stay and become a big part of our company. I’m hoping to retire in two years. Rick: Well. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. 20 50 Practical Negotiation Tactics . to tell you the truth. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. Rich almost lost the deal. Conclusion By masking his real objective (giving himself two more years as president before retiring).
Make up your minds. Bailey: Cybil: Preparation 21 . Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. I like the frog. it’s a deal. the frog is everybody’s favorite. they have the information they need at their fingertips. and so on. Cybil. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah.Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking.) Let’s take all our Beanie Babies to my house to trade! Okay. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. (thirty minutes later) Bailey: So. and go play somewhere! Cybil: Well … Okay. they control the breaks and environmental factors.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. such as a hotel conference room. (Think of the showroom tactics used by car dealers. Mother: Hush. too. girls.
The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. as long as they met in the boardroom of Team B.Conclusion Bailey. 22 50 Practical Negotiation Tactics . while members of Team B were able to stay fresh.” The chief negotiator for Team B agreed. Both sides desperately needed to settle a property dispute. Team A agreed to change the meeting place. around the clock. Team A agreed to a settlement almost identical to the one rejected days before. The firm deadline was only four days away. They were blamed for accepting the same deal that had been rejected only days earlier. About thirty-six hours later. having set up beds. not one member of Team A was chosen to return to the table. non-stop negotiations wore down the members of Team A. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. Team A was whipped physically and emotionally. was still going strong. After forty hours of negotiating. until we have a settlement. The physical and emotional demands of 24-hour. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. in their own familiar setting. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. although only ten years old. Team B. meals. When negotiations resumed in two months over another piece of property. That’s why she wanted to go to her house. Team B had clearly used its home turf to gain a substantial advantage. and other conveniences in the adjoining room.
it became clear that all of those pipes had to be pulled and new ones put in. rather than give them the “advantage. and show them the actual work that got done. If you think that the other party knows more than you do. when Will presented Larry with his bill. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. I was kind of surprised at how high it was. and he and Larry have always gotten along. based on objective criteria (think property appraisals in real estate). Let’s get the guys back in who gave you estimates. After all. When you first told me about your project. It was twice as high as the estimates Larry received from other plumbers before they started the project. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. you are likely to resent them for it and hold out. Larry had expected to pay him for his time. though. but was shocked at the amount of the bill. about your bill. If they tell us that they either Preparation 23 . Will: Larry. Larry: Just make sure you’re comparing apples to apples. Things turned sour. I did get some estimates from plumbers. Larry was thrilled. I would have charged anyone else much more. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. I gave you my “family” rate. Larry: Well. I anticipated much less work. When we got into it.” This can hold up an agreement and cost you in the end. This uncomfortable negotiation followed: Larry: Will. 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. Believe me. Will is a licensed plumber. and they were much lower than this.
Conclusion When the other plumbers looked at the work. they had to agree that their early estimates were low. they said. he used his financial expertise to analyze the investments of the college’s endowment fund. Had they actually prepared bids on the work. The estimates would have been higher than what cousin Will charged.disagree on the need for that work or that they would have done it for less. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . Comparing the estimates to Will’s actual costs would have been counterproductive. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. Example 2 After Stuart was appointed to the college’s Board of Trustees. I’ll revise my bill to meet the lowest estimate you get. they would have had to revise the figures. I certainly didn’t mean to offend you. and no one had ever questioned her performance. 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. The college’s budget officer was understandably offended. He was disappointed in the performance of the fund. Budget Officer: I don’t know what your problem is. and decided to bring the matter up at a Board meeting. she had been investing the college’s endowment funds for many years. Larry: That sounds fair. because (as Will pointed out) it wasn’t an apples-to-apples comparison. while she wasn’t an expert. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. From a look at the portfolio.
In this situation. and its resources are limited. Stuart: No problem. there might be increased risk and some expenses for commissions. I don’t want you directing how they’re going to go. Stuart: Yes. but some of these stocks have really lost their value. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. 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. Preparation 25 . but we can ask them to plan and cost out each move. because she did not have the background in investments necessary to trust such advice. I have a suggestion. then you and I can talk about changing our investment strategy. the college is a private institution. Okay? Budget Officer: Okay. I find that a more aggressive investment strategy produces a better return. Now. considering commissions and all. As you know. but such a strategy also increases risk and costs more money to administer. but I think they more than offset the gains. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. 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. but I want to be involved in the discussions with them about what we’re asking. I don’t question that they were sound at one time.were stale. Budget Officer: Yes. if both of them demonstrate a similar strategy and produce better results after expenses. At the end of two months. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated.
a sixteen-year-old who lives with her parents and three younger sisters. cut the grass. Example 1 Shari. wash the cars. what else can I do. (3) more chores. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. You can’t treat me the same! Mother: Well—so we’re talking about several issues. if I give you an increase. Mother: But your allowance is based on what you earn in your weekly chores. your little sisters will want equal treatment. This strategy can build trust in the negotiation process itself. and ask the other party to add to the list. baby-sit your sisters. not on what you want to spend. Mother: That’s a large increase—and we just raised it last year! Shari: Well.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. Shari: I’m four years older than the next-oldest. I need more money for clothes and CDs. not just an allowance increase! There is: (1) a $10 increase. Once you both agree on the list of things to be negotiated. has asked her mother for a $10/week increase in her allowance. It will cost me more than $10—about $35 per week. 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. and for going out with my friends. (2) a later curfew. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . Shari: Well.
but unlike your sisters. and item #23 (the wellness program voucher). since all of their items were included as requested. Shari got the $10 she wanted and a later curfew. Now it is time for each side to list their desired outcome for each item. you get to stay out an hour later that night. in the first session.Shari: Right! Mother: So … I suggest no allowance increase. And if you clean the whole house on Saturday. if you agree to our proposals on item #3 (the paid vacation schedule). was avoided. The trading of items (where initial demands are discussed and agreed upon) begins. opens by proposing the list of items. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). item #11 (the clothing allowance). Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. I’ll pay you $10 to babysit every Wednesday night. An allowance increase. Then a “win-win” solution could be determined. Management agrees. which the other children would have requested as well. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. while your Dad and I go out. Now we have a package deal to propose … Preparation 27 . The union’s chief negotiator. while the mother won a Saturday house-cleaning and a night out each week. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands.
other trade-offs are proposed and agreed to until only a few items remain. 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. 28 50 Practical Negotiation Tactics .
time of day.000? No. I love this car—restored it myself. say. as he left the supermarket. but money doesn’t mean anything to me at this point in my life … Well. Not even for. Would you possibly be interested in selling it? No. thanks. Prepare carefully. One day. As the man got out of his car. on Briarwood Road. That’s a generous offer. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. which turned out to be only a few blocks from his own house. he noticed a FOR SALE sign in the yard. $12.Tactic 6: Timing Is Everything The exact month. Bob made it a point about once a month to go out of his way and drive by the man’s house. The external pressures put on the parties involved (which might not be related to the issues under negotiation) can sometimes be used to advantage if you know about them. my name is Bob Hillard. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. It was nice meeting you. I live a few blocks from here. (For the next three years. he saw an elderly man get in his dream car and drive away. and general circumstances under which negotiations take place can substantially impact the outcome. and do your homework. One day. Hi! What can I do for you? I’ve admired your ‘63 Impala for years.) Preparation 29 . just out of curiosity. He stopped and knocked on the door. Bob followed the man home. day.
I can’t take it with me.000. for tax reasons. The board members had met twice before. the proposal would die at midnight. and I promise to take good care of it. Follow me. 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. Can you come back on Monday at 10:00 a. had issued a deadline of December 31st.m. beyond which the project would have to be abandoned. The partner organization. Can I see it? Sure. if a seventh vote could not be found by the pro-agreement side. as a matter of fact. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams.m. December 31st. (after a careful inspection) It’s a very nice car! I’ll give you $12. resulted in another 6-6 30 50 Practical Negotiation Tactics . Example 2 It was Sunday. to seal the agreement at the courthouse? Sure. A third vote at 3:00 p. A majority was needed to pass the partnership agreement. Then it’s a deal? Yes. so I guess I will be selling it. I’m moving to California to live with my daughter. and the vote was a 6-6 tie each time. I’ll see you on Monday.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. Well. Conclusion While Bob did not achieve his goal during his first negotiation effort. that’s a fair price.
Preparation 31 . Both sides caucused: The leaders on each side met to negotiate a compromise. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. When the meeting resumed at 4:00 p. A member of the pro-project group quickly called for a vote after the leader gave a signal. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. and it worked. and the meeting was adjourned. as predicted. 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. during an hour break in the meeting.. in the end...deadlock. timing was everything. The measure passed 6–5 at 5:45 p.m. a member of the anti-project group left the room.m. the project had been stalled by 6–6 votes. At 5:30 p. He planned for it accordingly. For weeks.m. That effort failed.m. Then.. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage.
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Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). decide whether the negotiations should be continuous. Tactic #43 (Nickel and Diming). Before you can do this. After you have evaluated these factors. if you want to begin in a friendly. cooperative manner. Are there any outside people who might influence the process. a third party can serve as a mediator (a legislative body. 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. In some cases. 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 . If you prefer to take a firm and direct approach. Third parties sometimes have their own hidden agendas. For example. such as a buyer and a seller or a city and its union. 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. Identify all outside influences and hidden agendas before you develop your strategy. and Tactic #48 (Walk Away). you must first evaluate your needs and those of your opponent. such as a third-party negotiator. as it can substantially alter the negotiations between two primary parties.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. Tactic #33 (Bluff). The overall strategy chosen does not limit the use of other tactics. A neutral. uncaring approach (Tactic #9: Control Your Emotions. but in practice it will likely influence the whole process. might step in and help settle negotiations between a union and administration negotiators. such as Tactic #19 (Make a First and Best Offer). for example. Be sure you are aware of this at the beginning. or one-time-only. Tactic #12: Find Common Interests can be helpful. Some of the tactics listed in this book are only suitable for single-session negotiations. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. as well as their bargaining history and financial and political positions.
The buyer said he wasn’t interested. half-serious. The agent explained that the seller was desperate. with “All right. two people on the team will be more successful because they evoke different emotions from the other side. 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). If there is a significant weakness in your position. For example. The buyer loved the location. Weeks later. 34 50 Practical Negotiation Tactics . By assuming opposing roles.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. the seller’s agent called the buyer about the property. The desperate owner agreed. and the buyer was able to completely renovate the house and still have a great deal. “Please make any offer—they are motivated!” The buyer responded. I offer half the asking price. but the inside was a complete turnoff.” The agent took the offer to the seller. His teenage sons had “trashed” the house. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). 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.
but the redecorating is of little value. Carol: Maybe not. it is likely that your opponent will. but the house has increased in value. and then look at the demand from your opponent’s perspective. but we simply can’t take less than $160.000. Surely there’s some flexibility in your asking price. She has had it on and off the market for the last five years. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. After all. And I don’t see a lot of difference in the neighborhood. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. but not so high as to end the negotiations before they begin. However. We also think that the neighborhood has improved over the last few years. Buyer: We really like the house. your request must not be so low that the other party concludes that you are not negotiating in good faith. Carol: We really want to sell. Carol wants $160. Each time. so think this through well ahead of time. If you consider the demand ridiculous. Be realistic. so do not underestimate what you might be able to achieve. we think $160.000. Finally. The market hasn’t gone up that much in six years.000 is very high. Planning a Strategy 35 . one buyer shows some interest. First. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. It’s a good neighborhood. six years ago you bought it for $60. but certainly not exceptional in any way. Your demand should be high enough to give you room to compromise. Buyer: The air conditioning might have increased the value of the house. and just refuses to reduce it.000.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. with no success. as well. but quite frankly. You are not likely to get more than you request. Anyone buying the house would want to change wall colors or add new carpets.
36 50 Practical Negotiation Tactics . the buyer took it as a signal that either Carol didn’t want to sell.000 immediately.000 offer by coming down in price at least a little. enjoying a statewide reputation for quality representation. 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. The partners are interested in selling the name.000? Carol: We really can’t take less than $160. the founders of the firm. The other law firm was prepared to pay $100.Buyer: What if we offered you $100. Neither Edward Bits nor Edmund Bites. Example 2 The law firm of Bits & Bites was a Sioux City institution. though. In any event. Inquiries to other law firms were not very helpful because in almost all of the instances. When Carol refused to budge. Here’s how the initial negotiations went: Partners: Well. but they have no idea what the value of their firm’s name might be in this nearby city. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. We’re curious. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. Carol drove off a potential buyer by setting an asking price that was just too high. or she has unreal expectations. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. were still alive. we are certainly interested in your request to “buy” our firm name to use in your city. as to how you think the name is going to benefit you. and then $10.
Thanks so much for meeting with me. We weren’t really thinking about that amount of money. And even though you don’t have an office in our city. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 .New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. (surprised) Well. we do. because we were not even close to that number. expect to pay for that. I guess this is just not something we’ll be able to pursue. In every instance. If at any time we feel that you have “harmed” our name.000 initially. I really don’t feel comfortable doing that now. you have a very solid reputation there. And we. Yes. I’m kind of embarrassed now. of course. So. starting with the ten partners you describe. What number were you thinking about? Well. then. that is a very high number. To offer it now would be an insult. We should assume. (concerned about loosing the opportunity) Wait. we reserve the right to withdraw our permission. Let’s just pretend this didn’t happen. it would be impossible to create a new name out of the names of our key partners. but we get to keep all of the money we’ve received up to that point. We probably won’t be insulted. Well. that’s just our initial figure. because you are in the state capital and your firm has handled a lot of high-profile political cases. that you anticipate to build a very profitable law firm. we want $500. Using the Bits & Bites name can only enhance our profitability. Give us some range. one of these two attorneys carries the surname of the firm they are leaving. and then 10% of your profits each year for as long as you use the name.
Bits and Bites should have let the prospective firm make the first offer. The price they were willing to pay would have indicated what the naming rights were worth.Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. In this situation. since they had initiated the contact. It immediately dropped the idea. rather than negotiate. because there was no “objective” criteria available to help them set a reasonable price. Both parties were probably at a disadvantage. 38 50 Practical Negotiation Tactics . Either side could have asked for too much.
(bad guy) and implies that his or her side will hold firm on their demands. Peggy: So.200! We should get $1. I can use them. etc. Paula: Go ahead and ride it home. and I know how you take care of things. I don’t know what the deal is now.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. so I’ll take it. since they are sitting out in the driveway with it. I’ll go home and you can call me if you two can reach an agreement.200. Peggy. Peggy: That’s fair. we won’t need it at the new condo. I want to keep those. what’s your price? Andy: $1. Andy: No. Half what it cost us new. threatening. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. while another acts difficult. not for $1. And take the leaf-catcher attachment and the gas can. Example 1 So. Andy and Paula: Yes. Andy and Paula. Andy: I want them… Paula: Go ahead and take them. Peggy: I’m hearing one thing from Paula and another from Andy.400 if the catcher and can are included. Peggy: Planning a Strategy 39 . you’re really moving! I hate to see you leave. I heard that you want to sell your riding mower. Peggy: I assumed they went with the mower. angry. only three years ago. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. They cost about $300. Andy: No.
000 per month is one of the highest in town.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. Sandy. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). and your training programs. Liz: But we still want to renew your contract. we’ve been fairly happy with your responsiveness. your rate of $3. We estimated that it has cost us more than $50. And we need to add a clause that holds your company responsible for machine damages. Sandy: What? First of all. And cut the training hours from 55 to 20.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. You are located outside our primary service area. your account has taken too much time.000 in service calls last year alone because your damn people don’t take care of the equipment. And we want to change the 24-hour service response time to 48 hours. Sandy. perhaps even unintentionally. Miguel: I’ve figured $4. 40 50 Practical Negotiation Tactics . For the past three years. firm offer if they decided to continue negotiations. Miguel: But not at this ridiculous rate. Miguel: Well. She realized that it put her in an impossible negotiating position. causing our reps to spend hours on the road. She very wisely recognized the routine and forced Andy and Paula to give her a clear. Let’s talk. the quality of the technicians’ work. we’re here to negotiate a new service agreement.
Any luck. with a position he knew was unreasonable. Liz. I’m afraid our relationship is over. If not. I’ll explain on the way back to the office. Planning a Strategy 41 . I want to keep you as a customer.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. even though it was far above the previous contract. Sandy. Miguel! We’ve worked out a deal I think you can live with.m. you two? Good news. I’ll stop back about 2:00 p. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. I hope you can meet my terms. I’m going on to lunch. Sandy. but Miguel’s right. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. these terms will put me out of business—I’m a small 20-person operation. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. Our customer base has grown. Sandy. (Three hours later) I’m back. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later.
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. I noticed this.00 a minute. made some very good purchase decisions for his small business. but I recently was sold a $. 42 50 Practical Negotiation Tactics . He decided that the best approach was to act indignant when he spoke to the company representative. in fact. he was very unhappy.10 a minute rate at my office location. because we have had a sick relative out of town and we used long distance a lot this past month. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. The fault was partly his because he did not stay on top of changes. How may I help you? Hello. He had. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. It seems that the rate you are charging me on my home phone is $1. such as deals on computer packages and phone services. Your opponent might conclude that they have made a serious misjudgment and want to make a conciliatory move to get you back to the bargaining table. I have a problem with my recent bill and my billing rate.Tactic 9: Control Your Emotions Stay cool. This will put you at a distinct disadvantage from this point on. So. 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. and might even harden your opponent into an unfavorable position (for you or for both of you). 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.
But I am able to offer you a $. but this was quite a shock. to begin now. how would anyone who might only have residential service even know to ask? Well. It hasn’t been increased at any time. and I also realize that if I had examined my bill closely. (beginning to sound irritated.I expected the bill to be higher than usual. I realize that that might be the rate I started paying when I first took your service over eight years ago. I would think you would have given me the best rate you offer new customers. I see that the rate you are being charged is the rate we offer for the type of service you have with us. Customer representative: Let me pull up your account. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . we certainly would have discussed your options. Had you brought this to our attention before. 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. But as a very good customer of yours. Mike. Well.10 per minute rate on your long-distance service. 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. I would have known I was paying too much.
either. there’s no reason for this conversation to continue. she kept Mike as a residential customer as well as a business customer. I … (interrupting and in a stern. but I can’t do that. If you can’t get me someone to talk to. He was walking a thin line. however. (with a much angrier tone) Madam. and I should be treated with more respect! I’m sorry. don’t think this is directed at you personally. But I’m looking at a $500 longdistance bill. a long-time customer of your company. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. In doing so. I am. 44 50 Practical Negotiation Tactics . strategic anger and abusive behavior. which should rightly be $50. and I want to speak to someone in authority so I can terminate my service. Wait—I’ll get my supervisor. but I am very angry with Over-the-Air Company. controlled voice) I need to talk to someone who can do it immediately. The best we can do is fix the rate for the future. The latter would not have produced the desired results.10 per minute. We certainly don’t want to lose you as a customer. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. I would hope that you would credit my account for this better rate for past service. between controlled. Mike’s willingness to show a measured “flare of temper” brought results. after all.Mike: I would imagine so.
Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. they would become dissatisfied with their pay and want their base pay increased. On those overtime shifts. The employees’ negotiator finally decided to use “indignation” to break the stalemate. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. and it’s getting old. and it’s not what we’re even talking about. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. lesssenior employees might be at greater risk of injury because they have to handle explosives. Working with fireworks is working with explosives. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. I’ve got to have the employees with the most experience to protect this place. Owner: Now. and you just can’t be too careful. that’s just not fair. Where are your managers? Where is the training necessary to make Planning a Strategy 45 .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. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. They will be putting the plant AND their fellow workers at risk by not being here. and that they should be asking for a fairer base wage for the work they do for you. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. The owner told the employees that he was worried that during the overtime shifts.
That’s all. he became more reasonable. You are not addressing the real issue for you: money.Owner: Negotiator: Owner: Negotiator: Owner: sure these employees can protect themselves? Are you telling me that your employees are being put in dangerous conditions without adequate training and safeguards? No. the negotiator would have had to find a way back into the negotiations without losing ground. The safety of the plant demands it! (standing up to leave) This is just ridiculous. most of them continued to take all the overtime they could get. The end result was that the most-senior employees did win the right to refuse overtime. Had the owner let him leave. don’t be so hasty. All I’m saying is that the most-senior employees have to be on the overtime shifts. Then you can’t have it both ways. In practice. Until you’re ready to talk about that. now. I’m not coming back. 46 50 Practical Negotiation Tactics . No one who takes a job with us can be unaware of that. not at all. though. After the employees’ negotiator threatened to walk out. but not all? Conclusion The owner was on shaky ground with this one. or they’re not. either the employees are properly trained. sit down. Sit down. The negotiator was also running a risk with his flare of temper. or they’re not. But we protect our people. But the fireworks business is a business that involves risk. (He begins to walk out. Either they are properly protected.) Now. What if we were to agree that the senior employees could refuse half of the overtime offered to them.
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. a well-known negotiations professor from Harvard University. I’m willing to pay or let it go for $800. However. called the “Reciprocal Buy-Sell Offer. with the highest bidder paying the amount to the other side in compensation for their loss. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. and split the proceeds. with winner taking all. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. I’ll give you 48 hours to decide the price. A fourth option. (two days later) Mary Anne: Well. The second party then decides to either buy it at that price and pay the first party. Susan. you’re the oldest. since this one is in perfect shape and it was Mother’s. Mike.” is the recommendation of Howard Raiffa. Both sisters covet it. The first party decides on a price for which he or she will either buy or sell the object to the second party. All the rest of the estate has been divided among the family. 3) They can agree to sell the object to a third party. the executor of the estate. 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. Planning a Strategy 47 . so you set a price at which you agree to buy or sell the coffee grinder. Then Susan. Mike: Mary Anne. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. 2) They can flip a coin.
(sixty days later) 48 50 Practical Negotiation Tactics . Both sisters felt that the process enabled them to resolve the issue fairly. 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. in writing. I suggest a slight modification to the process. You will both agree. Lectures on Negotiation Analysis. They thus were able to determine the highest price each was willing to pay for it or receive for it. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner).Susan: Mike: Well.” Howard: Since in this case you are talking about a multi-million-dollar business. They accepted his suggestion to use the “reciprocal buy-sell strategy. to submit a sealed offer to buy/sell the business sixty days from today. which will bind us to the outcome. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Two business partners had been working together for ten years to build a successful business. Here is my check for $800. I choose to buy it. I’ll pick it up tonight. Thanks for making this last step as easy as possible. After I open the bids. Both came to Raiffa to help negotiate a settlement. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. and then decide how much more “emotional value” it held.
but only if they could become the sole owner. Abe. Planning a Strategy 49 . your bid is $190 million. I will arrange to sell him my half-interest for $180 million. and we close by July 1st. And I will arrange financing to pay you $180 million to become sole owner.Howard: Abe: Bobby: Abe. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. Bobby was willing to pay more than Abe to remain sole owner. and to close within ninety days. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. Conclusion Both parties wanted to keep the business. and both men had carefully estimated the market value of half the business. Agreed. you agree to sell your half-interest to Bobby for $180 million. your bid is $170 million. Bobby.
so when the husband wants them to make an 50 50 Practical Negotiation Tactics . Example 1 A young couple were discussing a possible purchase of new furniture for their living room. she glanced at it and immediately deferred to his opinion. It can also work in reverse: establishing the other person as the expert. The couple decided to limit their selection to those rated “excellent. This strategy worked. and forcing him or her to control the discussion of the issue.” but there were substantial differences in price—differences that the wife did not see as a problem.” and then argue for the frugal alternative. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. When he showed his wife the detailed spreadsheet. When it came to comfort. he decided upon a strategy: First establish himself as the “dimension expert. Conclusion The husband became the “expert” in this situation by doing the homework.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. Looking at these statistics. The husband found the dimensions of the couches in the brochures and Web sites. They both expressed an interest in finding a couch that offered the most “interior” space. and created a spreadsheet to compare the five best-rated couches on their list. the one that was the most expensive was superior. He thus ended up having greater negotiating power. the one he wanted (one of the least-expensive) was superior. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. This approach can also be reversed: The wife in this situation is a banker. and the husband felt like he saved them hundreds of dollars.
Preferred Provider Organizations (PPOs).investment decision or deal with an error in a bill. and Point of Service (POS) plans. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . you gain an edge when negotiating a new plan for your company. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. and should therefore handle the problem. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert.” If you spend many hours learning about Health Maintenance Organizations (HMOs). he argues that she is the expert.
This time. point them out at the very beginning of negotiations and refer to them throughout the process. and then asked their mom for a chance to negotiate with each other. Unless you can convince me otherwise. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. Russ: 52 50 Practical Negotiation Tactics .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. you both want to complete negotiations by a certain date. she decided to try something different. because I am so conscientious about my paper route. she made them share whatever it was. here’s what they said to her: I think I should be rewarded with the piece of cake. neither of you want to be embarrassed at the outcome. and their mother was tired of it. Usually. and neither boy was very happy. the last piece of cake will get thrown away. Example 1 When Russ and Bill got home from school. That simply rewards your continual squabbling. like we usually have. Be clear on what you have in common at the start. I missed dessert the other night because I had to get to baseball practice. particularly when things seem to be at a standstill. These positive things are part of your goals and objectives. I wouldn’t care so much. The boys quickly huddled. 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. They immediately began to fight over it. The two boys fought over the last piece of everything. I also took out the garbage last week without being asked twice. If this was chocolate icing. When they boys returned. you want to reach an agreement that is favorable to an outside party. and so on. and I really love the banana/butternut/ sour cream frosting on this cake.
and her children were in school.m. so these hours worked out well. to 3:00 p. Marilyn originally set her shop’s hours for 10:00 a. It was the type of shop the nearby residents preferred. Planning a Strategy 53 . your new shop hours have caused your customers to park in our parking spaces. I helped with the bags without being asked twice. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. Residents: Marilyn.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice.m. We really want you to go back to your original times. 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. so that your customers can park on the street. This cake is white cake. 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. and I really like white cake. We realized that if we cut the cake lengthwise. because there is no parking along the street during morning and evening rush hours. and keeps it open longer so she can attract customers on their way to and from work. she opens her shop at 7:30 a. and that’s not my favorite either. she got a visit from some of the residents. One day.m. Now that her children are in college. I can have the part with the icing and Bill can have the part with the cake and filling. and better than a fast-food restaurant with late-night hours and a drive-through window. Customers have started to park in nearby apartment lots. The last cake we had was chocolate cake. That sounds like a wonderful solution.
rather than after work. Identifying their shared interests caused the nearby residents and the customers to reach agreement. and 6:00 p. If you need to have the shop open more hours. Most of our residents are gone by 8:00 a. But I really am increasing my sales by being open longer hours... We think they’ll be agreeable to the morning parking.? Residents: We certainly want you to stay in business here. But in order to keep my new customers.m. and see if it works. and I close at 4:00 p. Lets try it.m. the off-street lots probably won’t be used by my customers. Okay. and 9:00 a. we have to be willing to tow the cars that violate it.m.m. Between 7:30 a. I really need that extra income to stay in business. It is very costly to have cars towed.m. The shared parking arrangement did work out for Marilyn. let’s see what the options are.m. if residents haven’t left for work yet. if I go ahead and open the shop at 7:30 a.00 a. and 9:00 a. 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 we don’t think you want your customers’ cars towed. then we’ll try and accommodate you.m. Marilyn: Conclusion Marilyn needed the extra parking. Do you? Marilyn: No. and is probably empty in the afternoon if they haven’t gotten home yet. 54 50 Practical Negotiation Tactics . and usually the car is gone by the time a tow truck shows up anyway. and the residents needed Marilyn’s shop.m. my customers can’t park on the street. and between 4:00 p.m. The parking lot used for apartment residents is probably full from 7:30– 9. 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. or so anyway. I don’t think that would be very good for business. I have to convince them to come before work..I’m sorry this is happening.m. So.
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). 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. How can I do that? You all live in this town and you know this house. I don’t. let’s all take two hours to look around and make a list of things we might want. That will take days! I haven’t been in this house for twelve years.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. 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. Then we can sit down at this table at 3:00 p. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. Well. A few hours? I can’t—I’ve got to leave shortly for the drive home. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. one at a time: the youngest. etc. But at Planning a Strategy 55 . we can each take turns selecting things … Like each tool or dish.m. Example 1 Four adult children have gathered at the home of their recently deceased mother. Well. the first. We just don’t have the time … We’ve got to do this—the house is sold! Okay. 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.
can sell or give away what is left. However. Sue. Agreed.m. Example 2 Allan: As the negotiating team for the city. if I cannot carry a negotiated and signed deal to my board by noon on December 31.. 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. we all leave. Okay. All of us must come back before Saturday to take what is ours—agreed? Okay. your attorneys know the tax laws. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. 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. And besides. being the oldest.Sue: Mary: Jenny: 5:00 p. and I appreciate your interest in the historic structure. 56 50 Practical Negotiation Tactics . December 31. if we are not finished. David: I understand your concern. this is December 29.
we can’t get the reports we wanted in 48 hours.Allan: (One hour later. Let’s continue. Conclusion Knowing the external deadline gave David a significant negotiating edge. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. and I don’t like it.) I understand the December 31 deadline. Planning a Strategy 57 . Obviously.
There will be times during a negotiation when you will want to catch your opponent off-guard. and you can neutralize its effect on the negotiations. don’t get mad. Have a clear goal in mind AND all the information you need to make your points. we need to talk. 58 50 Practical Negotiation Tactics . but I have a problem in my Spanish class. before your opponent tries to catch you off-guard. Did you buy it? Jason: Yes. Mom: What’s that? Jason: A few weeks ago I lost my workbook. and I missed some assignments. Unfortunately. Mom: All right. as well as those of the other side. Jason: Mom. but remember that both sides have weaknesses. while watching TV.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. Now. so he was able to prevail upon her to let him continue. I bought the second one. first-quarter grades are coming out at the end of the week. and Jason knows he is getting a D in Spanish. He decided to preempt the discussion in order to make the best deal. as well as strengths. Control the use of the information. He knows that a D will mean that he will have to change the way he studies. and we used it a couple of times. The objective is to negotiate from a position of strength. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. but his grades are good. and this usually means having all the right information. and one of the ways to do that is to reveal a weakness at the beginning. One day mine disappeared. Then the teacher went back to the first one. but that was actually a different workbook. I’ll need to buy it again. Mom: I gave you money to buy a workbook a few weeks ago. We had one at the beginning of the semester that we were using pretty often. But don’t lose it again. I’ll give you money for it. His mother disapproves of his study habits.
But that Spanish grade needs to come up to a B!! Jason: Okay. she trusted it more. I don’t think you’re taking your schoolwork seriously enough. Mom: Well. 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. It’s because I didn’t have the book. but I think you do need to change your study habits. or borderline B. All of my other classes are A. Thanks. The location was ideal for a convenience store or a fast-food restaurant.Jason: Another thing. Although his Spanish grade was only a C+. Example 2 Jane once owned a piece of property she wanted very much to sell. but all three deals Planning a Strategy 59 . Its owners found out that at least three other buyers had been in contact with Jane. Conclusion All of Jason’s grades did improve over the next quarter. he was able to continue to study the way he wanted to. Since I missed some assignments. and since he offered her the information up front. If I don’t pull the D up to a C or better. and the D is directly related to my losing the book. Pizza Boy was interested and had even made inquiries about the property. And those are hard classes—Algebra. all right. Mom: Well. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. Obviously. then I’ll agree to make changes. The work I did turn in was fine. Environmental Science. B. I think I can do that. And I know I have to be better about getting in all of my assignments. I’ll give you more time. my study habits are okay. so there’s no reason to think I need to change my study habits. Mom. English. I’m sorry. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV.(maybe C+). Jason: Spanish is just one class. His explanation made sense.
Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives.had fallen through. What are her grounds for complaining? Jane: She doesn’t have any. I know. A tentative deal was signed. 60 50 Practical Negotiation Tactics . though. it’s only the neighbor to the right of the property who has a problem. They decided not to fight a disgruntled neighbor. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. she started her campaign to keep them from closing the deal. we’re not interested in neighborhood fights. Pizza Boy: Well. and it’s zoned for commercial use. she will want you to think it’s the whole neighborhood. and was able to politely ignore her. which was way below the price they were actually willing to pay. I’m very happy you’re interested in my property. the other interested buyers already have businesses in the neighborhood. What are you asking for the property? Conclusion Jane told them her asking price. Furthermore. I think you’ll find that this is only one person. This is how the negotiations went: Jane: Pizza Boy. Actually. since they were well aware of the negatives. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. When she contacts you. The real problem. Jane: Oh. really. there were no unpleasant surprises to stop the deal. however. When the neighbor heard about the new buyer. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. let’s assume that you are right. either. I’m sure. Pizza Boy was prepared for her call. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. But unlike your company. Pizza Boy: Well. however. Pizza Boy: We’ve checked the property out. You are a big enough corporation to withstand her objections.
in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. Another common strategy is to start with the status quo. This is a practical starting point that will not anger the other side (and might even be expected). The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. (2004). by Michael R. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). None is as important as the first one. quick agreement. 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. Carrell and Christina Heavrin.000 22 23 24 25 26 27 Initial Offer $28.500) M $21.000 Buyer Initial Offer ($21. “Distributive” bargaining (“win-lose” or “zero sum”) is used. as illustrated in the following figure: Seller Resistance Point ($22. 2: Distributive Bargaining Process. Exchanging Initial Offers 61 . such as proposing to continue at the current rate or price. 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. Adapted from Labor Relations and Collective Bargaining. for example.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.750) Target Point ($24.000) Settlement Range ($22. 190–192. 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.500) Fig.000) Target Point ($23.500) Resistance Point ($25.750–$25.
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). thus starting out on a positive note.” but the settlement price. In the example. if the buyer’s initial offer was $25. When the two parties agree to a price within the range. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. it is termed the settlement point – not the “right price” or “fair price. usually. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. The settlement range is the distance between the resistance points. each initial offer ($21. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. 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. 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 other side does not agree to this value).In this example. and is the range in which most negotiations actually occur. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). thus producing a true “win-win” negotiation.000 and $28.000) is reasonable. See Tactic #18: Agree on Something As Soon As You Can.000. these points have set the outer limits. 62 50 Practical Negotiation Tactics . After initial offers are exchanged. 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. 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). A target point is the desired settlement value a party has set as a goal when negotiations begin. the process quickly narrows to the range between the initial offers.
A caucus gives you an opportunity to work out problems with your own team in private. because it might disturb the neighbors. make use of the opportunity to call for a caucus. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. If the negotiations have suddenly gone in an unanticipated direction. Shelly. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. If the team is feeling pressure to concede on certain items. so we’ll have the party from 7:00 p. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . Shelly: Twenty friends? You’re kidding! I’ve just started on my list. We don’t want it to be a late evening.m. You can invite up to 20 of your friends. or if a member takes on a role in the negotiations that has not been assigned to them. We’ll just have chips and soda. Unfortunately. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. 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. If the negotiations are heated. If negotiations seem stalled. There are many ways to use this strategy. Mom: We’re planning on having your party here on Saturday night. without revealing their ideas to the other side. the negotiations got out of hand when Shelly’s dad forgot what had been decided. Her mom and dad had already talked about it privately. calling for a caucus gives you a chance to get your team to recommit to a particular course of action.Tactic 15: Caucus If you are part of a negotiating team. a caucus can be used as a break to calm the situation down. and I already have 25 names.–10:00 p. Example 1 Shelly’s “Sweet Sixteen” party was coming up. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations.m. and presumably had an agreement. so her parents sat down with their daughter to discuss the details.
I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. we need to talk. It’s special!!! Well. we’ll call you when we’re ready. We could play records and you guys could dance. Jerry from down the street is in a really good band that all of the crowd likes. I’m sure we can ask them to tone it down a little. That would be great! It would keep everyone entertained. we could rent the VFW hall. And they can’t go home at 10:00 p. Your dad and I already talked about this and agreed that 20 guests would be the limit. (excited) That would be so cool. Dad. Mom! This is my “Sweet Sixteen” party. I think we can handle a few more kids—how about 35? And midnight sounds okay. Actually. I guess the VFW will work. That sounds like too many for here at the house. Time out! Dad. In fact. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds.” They would never expect a party to end before midnight. okay. We’ll get a band—everyone does. and then the number of kids won’t matter. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . (with some irritation) I’m not sure. (During the caucus.—that’s so “baby. And midnight is definitely too late.m.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. I think the band would be fine. alone. Shelly. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. Oh.
m. That way. and not a huge production. causing them to lose control and make compromises they hadn’t intended to make. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. too? No way!! I want presents!! Conclusion In spite of their prior planning. can’t we? No band. to 11:00 p.m. That’s so lame. All right. When they called Shelly back in. but no Sweet Sixteen birthday party decorations. Your mom and I agree—11:00 p. Okay. and you can invite more friends.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. Dad. but your dad and I agree on getting a DJ to play. is for little kids!! No. and we will need to approve the list.) Okay. but we’ll schedule the party for 8:00 p. Does that mean no presents.m. Example 2 The contract negotiations between the company and the union had been going on for days. But we can have the band. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. midnight. A DJ? I guess that’s okay. please!! 11:00 p. Agreed. And we’re serving chips and sodas. her mom presented the revised proposal.m. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . But you are limited to 40. we will be better able to chaperone. this mom-and-dad negotiating team became unglued during the negotiations. we’re going to rent the VFW hall. sorry.
it’s a good proposal. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. some attempt to undermine me with my members? Company: I don’t know what you’re so worked up about—we’re willing to spend the same amount of money!! Union negotiator #2: Can we take a break? Union: We don’t need a break—we’re not discussing this stupid proposal. Union negotiator #2: Please—just a moment outside. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. The tuition benefits will encourage the workers to be prepared for new job opportunities. The union’s lead negotiator misunderstood the proposal. Tuition in place of health insurances? They’ll think I’ve lost my mind. Union: (angrily) I’m not presenting this proposal to my people. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. many will want to use it for their children’s education. A lot of employees have spouses who can get health insurance coverage through their work. I’m just saying that tuition benefits are sometimes a good substitute for health insurance.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. With the cost of college educations so high. What is this. 66 50 Practical Negotiation Tactics . and the following conversation occurred. The company’s negotiator didn’t recognize the misunderstanding.
I think that what you’re proposing is a really good idea. and I apologize for explaining it poorly. Exchanging Initial Offers 67 . Now. Negotiator #1 regained his footing. and the parties were able to complete their negotiations. (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. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. Good.) I’m sorry. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. I thought that the contract would cover one or the other for everyone. we’ll be back in 5 minutes. the parties returned to the room.Union: Union: Company: Okay.
I’ll go get him. A has gained something of true value and given up nothing he values in return. not revealing that the item exchanged is a “throwaway. I can go to another dealer and get a green exterior—the color I like best. but … Salesman: But what? Hobbs: Well. this conversation takes place: Hobbs: Yes. you are making $200 profit over the true dealer’s cost. according to the Consumer Reports listing of the cost of the vehicle. when the two sides are only a few dollars apart.” Throwaway items are those things that hold little or no value to you. However. Hobbs.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. But for this price. Hobbs: Yes. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . Here’s how it works: Party A exchanges the item for something of true value. but in reality. 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. At a point late in the negotiations. It is a useful tactic in any negotiations. quickly checked the dealer’s inventory of sport utility vehicles in stock. but he makes a mental note to use color as a “throwaway” item. we’ve got expenses and we need to make some profit. so be sure you present them in a way that suggests importance. and noticed that none of the vehicles have a green exterior. Salesman: Well.” Party B thinks that A has sacrificed one important objective to gain another. it’s a great car and a fair deal. He doesn’t really care about the color of the new vehicle. you don’t want your opponent to know what these things are. Example 1 The buyer. according to my figures. I know. Salesman: Let me talk to my manager. Mr.
At the very end of the negotiations. 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. Hobbs successfully chose color as a throwaway item. Example 2 The office supervisor told the three internal sales representatives (Jenny.. and seniority will be used to determine who gets to choose the first day. I’ll take the red one for $100 less.no it’s not.. Then we have a deal. Miguel. 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 .. The days in question are: Exchanging Initial Offers 69 . Conclusion Mr.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). All three employees must agree to the schedule. The three are sitting at a lunch table to discuss the schedule. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. The manager was convinced enough to sacrifice a final $100 for the throwaway. Employees will be paid time-and-a half for each of these days. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker.
2 Jenny: December 23. January 1. in exchange for giving up earlier choices due to seniority. if they let her choose the two days she will be off and the five days she will work. but that is a secondary consideration. A second and third round produced the following allocation: Jenny: December 23. This would allow Jenny and Miguel to each work only two days. December 30. 24. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. December 31 Miguel: November 25. each made a first choice of days they will work. 26 Miguel: November 25. 26. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. They all agreed to their schedules. December 26. 27. and each chooses their days to work: Carolyn: December 27.November 25 (the day after Thanksgiving) December 23. January 1 Carolyn: December 24. 30. She would actually prefer to work the extra days and get paid time-and-a half. They agree. December 27. January 2 None of the three are totally happy with the results. They have decided to start over. She got what she wanted by giving up something she did not value: the two other days. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. 31 January 1. 30. 70 50 Practical Negotiation Tactics . She proposes to work five days. 31. 2 In the first round of negotiation.
for example. we need to sell the house. The house and much of the furniture has been in the Exchanging Initial Offers 71 . and the stock and distribute the proceeds.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. a house valued at $250. Anne: As I see it. and a collection of antique furniture. 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. A reluctance to include one particular financial item with other financial issues. one might package all of the financial issues in one group and negotiate on that package as one issue. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. realizing that the total cost of a deal might make or break the agreement. Autumn and Angela. In addition. they met at the house. were faced with the task of selling the house and disposing of their mom’s personal belongings. three ways. When the girls decided it was time to talk about the estate. the antiques. can indicate that something you think is minor is really a major concern to your opponent. their mom left specific pieces of jewelry and art in the will to each of the girls. it is often helpful to package the items in distinct groups and then deal with each package separately.000. 300 shares of stock in a pharmaceutical company. but I’d like to talk about the house and the furniture. along with the cash. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. The estate’s assets included a checking and savings account totaling $450. 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. Example 1 When their mother died at age 82. For example.000 with no mortgage on it.
If we want. And we’ll fix the house up. Why don’t we leave some of the cash in the bank. we can sell ours. and if we wait a couple of years. With no one living here. Frankly. Autumn: Sounds good to me. I’d like to talk about the art works Mom left each of us. we’d get a lot more for them.” She gave those things to us.000 in the bank and distribute the remainder three ways. but the operative word is “give. Angela: Now’s not a good time to sell either the stock or the house and antiques. If Angela wants to hold on to her stock. 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. and use it to fix the house up? Then when we make a decision. so I will be able to keep tabs on it. and letting everything else wait for another discussion. it’s a magnet for vandals. we’ll discuss again what happens to the house and the antiques. Angela: I live close by. Mother was born here and grew up here. In fact. and now that we have them. Autumn: I think its awfully soon to be making these kinds of decisions. Anne: But that means we have to continue to take care of the house and its contents. It’s a buyer’s market now. we’re really free to do with them what we want. don’t you think? Angela: Maybe. What would you think about agreeing today to distribute the cash and stock three ways. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . we will have a more valuable asset. I’d like it all to stay in the family. Soon.family for years. We’ll split the stock three ways. There was a reason why she gave us what she did. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. So we agree: We’ll leave $30. I’d really be interested in talking a trade for some of them. she’s free to do so. Anne: Okay.
The negotiations on the other items—the house. Employees: We’ve got a lot of items to cover. health benefits. The third: Ben- Exchanging Initial Offers 73 . funeral. and the art works—will be more difficult. tuition benefits. Angela: That’s fine. vacation. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). the antiques.). May I suggest that we divide the items into three areas. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. deciding whether there would be annual wage increases as well as merit increases. what kind of paid leaves there will be (personal. Several issues also needed to be addressed: the ability of employees to move up through the organization. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. the jewelry. and establishing a work schedule to accommodate evening and weekend clients. and the assignment of the limited number of parking spaces. including benefits for partners in non-traditional relationships.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. The second: working conditions (work schedules and promotional opportunities). Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. etc. The following tasks needed to be a accomplished: establishing basic pay schedules. 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. Anne: Same with me. sick. but I’m making no commitment to trade.
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. Later negotiations were difficult. 74 50 Practical Negotiation Tactics . as well. Wages should not include merit pay raises. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. I think it also makes sense to include tuition benefits in the Working Conditions category.efits (health insurance. Let’s get started. So I’d like to see us get through the wage issues quickly and then move on. Executive Director: I think it’s a good idea to group items together. that makes sense. but I’d change your list. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. 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. to be honest with you. Also. because they’re really an incentive for better performance. but the parties were able to come to agreement because the wage issue had been resolved. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. Executive Director: Sounds like a good agenda. we are an agency supported generally by public funding. tuition benefits. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. paid leave times. I would include that under the Working Conditions category. Executive Director: Well. Employees: Okay. and the parking spaces). the paid leave categories are pretty clearly defined.
and both have good jobs. An initial agreement. They have no children. without suggesting any changes or modifications. They had also furnished their house on credit. Tim worried that he would be stuck with all of the debt. Exchanging Initial Offers 75 . and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. are divorcing. Tim began working right after graduation. It was her idea to buy the house and go into debt to furnish it. You can also make an effort to agree on something your opponent offers early in the negotiations. Now. They were in the middle of buying a house. because Tim felt that Kathy had taken advantage of him during the marriage. rather than disposing of assets. Kathy’s first job paid more than Tim’s because she had a graduate degree. The couple hoped to do the divorce without involving lawyers in order to save money.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 that you are entering into the negotiations with the intent to reach agreement. They met and married in college. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. It indicates to your opponent that you are a reasonable negotiator. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. sets the stage for mutual respect and communication. The discussion might become very heated. too. no matter how insignificant. Their “property division” was mostly about dividing their debts. Example 1 Tim and Kathy. Kathy borrowed more money to go to graduate school full-time. with her promotion sending her out of town. and she agreed. Tim: You might be leaving town. after a brief marriage. You signed those papers. and might not even be able to keep the house. Kathy was asked by her employer to relocate to another city.
about the house and furnishings. and he could pay it in annual installments over a five-year period. we would have paid down our school loans more. a wholesale art dealer. and you got your sports car. 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. They also agreed that Tim wouldn’t have to pay her that amount for five years. ABC usually uses UPS 76 50 Practical Negotiation Tactics . The first thing I’d like to talk about is what we are going to do about the cars. an art gallery. as you remember. and XYZ Co. Example 2 ABC Company. If both of us had been working the year I went to graduate school. I got my convertible.Kathy: Hey. I think that makes sense. When we bought them two years ago. I can hardly argue with that. 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. Tim: Okay. Tim: Well. Frankly. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. Kathy: Now. Okay. What do you want to do about them? Conclusion Having agreed to two items very quickly. yes. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. I don’t intend to “stick” you with anything. hold on.. I think it only fair that I take over repayment of all the school loans. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. as long as the cost was approximately the same. Kathy: I suppose we should look at the school loans next. The monthly payments are about the same.
XYZ decided to cancel the promotional sale that was to start on Wednesday. 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. We’ll expect you to pay for the 12 works that will be in your show. let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. and the boxes showed no external damage. However. 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.to ship artwork. and began preparing to return all of the artwork to ABC. The other times this happened. XYZ’s manager failed to open the boxes or remove the artworks. when the boxes were opened on Monday. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. and put the company on notice that it was not going to accept the order because the planned sale needed a dozen works of art to make it profitable. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. ABC’s position was that the artwork was fine when it left their location. XYZ: ABC: Exchanging Initial Offers 77 . it was obvious that the art in one of the boxes had suffered considerable water damage. XYZ contacted ABC immediately. ABC: Before we begin. and arrived on time and apparently in good condition. and we will continue to discuss who is liable for the three water-damaged works. They arrived right before the holiday weekend began. The artworks filled four boxes. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. Unfortunately. There was no indication that the gallery’s electricity had gone out over the weekend. or else the box was damaged in XYZ’s warehouse. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute.
and if word gets out that you think it was. And we’ll eat the cost of shipping. I can’t see how I can refuse that. at its financial risk. 78 50 Practical Negotiation Tactics . generated a like offer from WeCanShipArt and a reasonable response from XYZ. Now. They also agreed that if the investigations are not conclusive. ABC: Well. they will split the cost of the three damaged pieces three ways. regardless of where the original three artworks were damaged. XYZ: Okay. WeCanShipArt: Wait a minute.m. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. We can guarantee that we will deliver the new order in perfect condition by 5:00 p.XYZ: Agreed. The artwork was not damaged while in our control. If we don’t make the deadline. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. we’re ruined. You can’t just ignore us. that’s okay with me if it’s okay with XYZ. Having reached an amiable solution to the immediate problem.
Okay? No quibbling. but if you’re interested. 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. we plan on selling our Ford tractor when we move. 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. period. consider using the “First and Best” tactic. and it came with the bush hog and the leaf pick-up. We plan to put an ad in the paper next week. we paid $5. I know you and Jeff said you’d like one because you have about five acres. What do you want for it? Colleen: Well.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. we’ll sell it to you. and even more hours in the fall picking up leaves. Ann: Well. Example 1 Colleen: Ann. Ann: Thanks! We really need one. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. Why don’t you give me a price? Colleen: Oh.000 for it six years ago. no hard feelings either way. I don’t want to quibble. Jeff spends many hours mowing the yard every week. You must mean what you say and be prepared to walk away from an unacceptable offer. but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. I don’t have any idea. The “first and best” tactic enabled them to settle the matter easily. Exchanging Initial Offers 79 . Ann: That sounds great! I don’t want this to affect our friendship.
I think we have agreed to all aspects of the job offer.Example 2 Archie: Well. I came up with the best salary offer I can make. as we agreed. on this slip of paper. 80 50 Practical Negotiation Tactics . because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. I’ll get back to you in three days. He also started the job with a positive working relationship with Vernon. Here it is. I’ll either accept it or reject it. I don’t like negotiating over salary either. I’ll discuss it with my wife and get back to you in 48 hours. I want the job. but I don’t want to start off in a new job by negotiating with my boss! So. but we have internal budget considerations and we must consider equity with other employees. and you know my current salary. who admired the way Archie negotiated his starting salary. how about you making your first salary offer your best one. I expect a fair increase. So. We want you. Conclusion Archie accepted the job offer. no questions asked. (three days later) Vernon: Archie. Archie: Thanks. except salary. and I’ll take 48 hours to consider it. Okay? Vernon: That sounds good.
and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. we’re all meeting at Donna’s so we can share a limousine. Posturing is indeed “acting. Sally’s Senior Prom is coming up. you will probably have to modify some of your positions if you are to reach agreement. curfew would be okay. look for indications from your opponent as to what he or she believes is their best position. a 4:00 a. This is called posturing—presenting your position strongly and completely.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. Present your position and demands as if yours is the only logical position. First. since Sally is going away to college next year. Second. It might be your only opportunity to explain your position without interruption. you know that Sally is really looking forward to this. Kevin had “negotiated” with his parents before.) During the posturing phase.m. 17 years old and a junior in high school. and ignore or deny any weaknesses in it. Example 1 Kevin. 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. was dating a senior. First we’re going to dinner.m. I’m the only junior in the crowd. Kevin: Mom and Dad. Fourth. so the prom is a pretty big deal to both of us. but he figured “all night” was relative. Exchanging Initial Offers 81 . then the prom. and we’ve made a lot of plans with our friends that I need to talk to you about. we’re not going to be dating exclusively after this summer. Third. (Once negotiations get underway.” As you know. you only have one Senior Prom in your life. and then to breakfast at “Timothy’s. He knew his parents would not agree to let him stay out all night. 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. and in a favorable light. He and his date had decided that as long as they could join their friends for breakfast after the prom.
So. the limousine will take us back to Donna’s house to spend the night. We are. Yes. Sally’s parents trust us and have already said yes to her. Fifth. which could be dangerous. we told you that we would not be changing our rules to accommodate that older group. And if we don’t spend the night. I don’t drink or do drugs. Donna’s parents will be there. You make some good points. Things can happen on a night like that that adversely affect you for the rest of your life. we know. and the crowd we hang with doesn’t either. We’ve heard that they allow kids to drink. That’s the deal then? Okay. I know you trust me and that I’ve earned the trust. yes. That’s asking us to believe a lot. you and Sally need to call it a night (or really a morning). so there will be plenty of chaperoning. Finally.m.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. You realize that this could be as late as 4:00 a. And. However. they will be open for the Prom crowd only. but to use that as a reason to stay overnight doesn’t make sense. Donna’s parents are not as strict as they could be when a bunch of you are there. of course. From where we sit. and we’re just not happy about that. We’re just not convinced that your entire group has been alcohol. for sure. Second. Also. 82 50 Practical Negotiation Tactics . I’ve never missed my curfew. 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. but because the owner’s daughter goes to Sally’s school. we’ll have to get in our car and drive home very early in the morning. this prom is a one-night thing—a dance that is dressier than you’re used to. you have been fairly good about making your curfew—most of the time. I believe you can pay a little more and have the limousine bring you both home. remember that when you started dating Sally and hanging out with an older crowd. I think I ought to be able to stay out all night. We think that after the breakfast. happy about your plans to use a limousine so you kids aren’t driving.or drug-free. but it should not be oversold.
Tencro is not going to leave the state. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. we’d be adding at least 500 new jobs. other companies have received incentives and Tencro certainly wants all it can get. Tencro approached the state’s Economic Development Officer.m. regardless of the incentives. and had this conversation: Tencro: We really want to keep our company here and expand it. EDO: Well. Also. Tencro: Let me just remind you of what our company means to this state. we’re of course interested in keeping you here. one-floor operation would be very profitable. because his parents could not disagree with such wellthought-out ideas. our Exchanging Initial Offers 83 . but it could easily add another 500 if it had the space on its assembly line. and a new.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. and it does not really need any help. With 800 employees. the state can do to help the company expand and rebuild. but we’re getting a lot of interest from other states willing to help us relocate. but there are limited options available. but was disappointed to learn that they offer very few incentives. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. if anything. The company approached other states to see what incentives they might offer Tencro to locate in their state. If we can expand here. Nevertheless. We need to find out what you’re willing to do to keep us here. we are one of the largest employers in this county. It currently employs 800 people. Tencro has approached the state’s Office for Business Incentives to see what. The assembly plant is out-of-date. The spin-off business from our operations is huge. Example 2 Tencro Company decided to modernize and expand its business.
We need certain incentives. We need help in the cost of attracting and training the new 500 employees. 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. schools. etc. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. and we’ve had to divert funds from business incentive programs over to basic services. so we’d have to have it free here. We can’t possibly give it away to other companies coming in behind them. Also. And. We 84 50 Practical Negotiation Tactics . We do want you to expand your plant. and we are willing to offer some training dollars for the new workers.employees pump money into the economy by buying houses and cars. now that the economy has improved. and traffic signals. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. we will need the two-lane entrance expanded to four lanes. paying taxes. EDO: Well. And we’ve been offered land practically free in the neighboring state. additional police. if the new location is at the local industrial park. EDO: The state has very limited resources to pay for economic development incentives. etc. or else it will not be cost-effective for us to stay here. That might involve the state building housing for them at a reduced cost and providing them with some retraining. We need a rebate on the local income taxes to help pay off the loan to build our new building. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant. while we value your company as a long-time corporate citizen. There are more residents in the state demanding more public services: road improvements.. Certainly.
Other than that. EDO: Get back to us as soon as you can.agree that the road into the industrial park must be widened and a traffic light installed at our expense. Exchanging Initial Offers 85 . and hired 500 new employees. Tencro bought land in the industrial park. However. let us go back and take another look at our options. Tencro: Well. Tencro was able to pay off the borrowed money in half the time. borrowed money for the new building. but for the fact that each party did its homework and was aware of the true facts. the training and the new road improvements were all the incentives offered to Tencro. we’re just not in a position to offer more than that at this time. The new set-up was so profitable. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. Future negotiations continued. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees.
Jay: No. and you cannot withdraw it in good faith.. That’s a fair price. 86 50 Practical Negotiation Tactics . Avoid giving away too much at the outset. such as last year’s price. think things through before you make or accept the first offer. 2) Start out with an old number. 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. particularly if you don’t know the other party’s “settlement range. before someone else does.000—what they paid for it. offer $150.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. of course. They found one they both like that lists for $325.000 and $337.000. The sellers must be willing to come down a few thousand … Sue: Well. Jay: No.000 two years ago. Let’s low-ball them and offer $290.000 three years ago).e.” The perfect first offer. and that two similar ones on the same street sold for $330. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. is the most (or least) the other side will accept. Sue: Let’s offer $325. We don’t know how anxious they are to sell or if they know the market.000 this year. but you feel cursed because you gave away too much. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure.000 for a house that sold for $185. then $320. Their realtor told them that it sold for $290. thus requiring greater concessions on both sides. which can be very useful). and houses in this area sell fast.000.” (You have won a settlement. or 3) Make an unrealistic offer (i. at minimum cost.) To prevent this from happening. never give them their asking price. because you have settled quickly.000. The other party will probably come back with an equally ridiculous offer.
(the next day …) Jay: They made us a counteroffer of $307. Sue: Then you do it. Frank: Me too. as requested by the human resource director. the sellers obviously would have accepted and Jay and Sue. (Bob and Frank meet privately to discuss the situation. That’s an insult! Jay: Well. but who knows what they are planning on offering. they had offered $325. 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.Sue: Don’t be crazy. then let them make a counteroffer.500—half the difference! Sue: Great. as Sue had first suggested. If.000. was very impressed with their presentation. realizing they offered too much. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. the company president. They outlined how they would develop a new employee performance-appraisal system. Lyle Foxworthy. I can’t tell our realtor $290. The buyers were very motivated to sell. since they had already bought another house. and the offer was based on fact: the prior negotiated price.) Bob: I’d do it for $3.000 for each of us—$6. Exchanging Initial Offers 87 .000.000 total. 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. Both parties felt that they made a good deal.
Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer.000) their minimum price of $6. 88 50 Practical Negotiation Tactics . What’s the cost? Bob: We want the job. That is all that’s left in this year’s training budget. but we know you must have an amount budgeted for this and we are willing to do it for that amount. 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. I’m out of time.) Lyle: Okay.000. We’ll do the job. We’ve waited long enough. Bob: That’s fair. and it would not apply. They also ended up getting three times ($18. Lyle: Okay. but we can’t pay more than $18. and you two come highly recommended.000.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room.
which would most likely weaken their position (see Tactic #26: Keeping Secrets).Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. carefully evaluate an opponent’s offer. be enlarged (see Tactic #27: Expanding the Pie). When the other party makes an offer. Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. labor negotiators. is likely to pull away from the table. the other party. In some negotiation situations. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. but possibly of different values to your opponent. be prepared to divide an offer into smaller ones to make it appear to be more reasonable to the other party (see Tactic #31: Cut Salami Slices) or offer two or more alternative proposals of equal value to you. what appears to be an outer limit of the settlement range when the process starts can. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). Instead. Expect that the “total pie” will be different from what it was at the outset. and do not flatly reject it because it is not your offer. do not dismiss it because it is not all you want. Skilled negotiators such as salespeople. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Experienced negotiators seldom reveal their exact priorities and objectives. which is often the case. and attorneys use tried and true tactics in giving and receiving offers. It has often been said that the key to negotiations is to be flexible (see Tactic #25). seeing no common ground. because if you do not at least appear to be flexible. One or more parts might be acceptable or indicate movement from their previous positions. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). in fact. T Making Counteroffers (The “Give and Take”) 89 . Also.
completed his first year of college and came home for the summer around the middle of May. Option 2: Mom and I go before Jerry leaves on August 1. The reciprocal opportunity to review and select among options rather than accept one (“take it or leave it”) also gives your opponent a way to win. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. The week he would be home would be the first week of school for Sydney. and quicker. except when you’re negotiating. Jerry pointed out that he is expected to work until July 31st. Dad. I don’t want to give up on a family vacation that quickly. 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. what say you. gives your opponent little maneuvering room and might even prolong or damage the negotiations. Jerry will be here. their parents began discussing a family summer vacation. so you can go without me. In mid-June. while it may be your best option. Jerry had already started his summer job.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. Sydney. 19. finished his freshman year of high school at the beginning of June. Proposing only one solution to a problem. He planned on being home for one last week before having to pack up and go back to college. 90 50 Practical Negotiation Tactics . Example 1 Jerry. His brother Sydney. Dad: Wait a minute. 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. 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. Here’s the discussion that followed: Mom: Well. 15. Let’s see what we can work out. Option 1: No family vacation. We have four options.
Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. Jerry: Okay with me. If we started the vacation on a Thursday. when we come home. but he can discharge employees for poor performance.Option 3: Mom. you have a half-day orientation on Wednesday. so I won’t be able to meet up with you until Sunday. Andrea considers Making Counteroffers (The “Give and Take”) 91 . they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. actually. It’s not perfect. Conclusion The goal was to have a family vacation. Mom: Well. and Carl). Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. me. one paralegal. and Sydney go to South Carolina before his school starts. and one secretary in his litigation unit. Classes don’t start until Friday. but it should work out all right. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. Sydney: Okay. Joe has no say in who was hired by the corporate legal office to work in his unit. Sydney: Don’t I start school that week? I don’t want to miss school. Bob. And I miss orientation and start school the next day? Dad: That’s an option. if it’s okay with Jerry. Jerry: My friends and I have plans through Saturday of that week. Then Jerry joins us until Thursday. we meet up with him that week for vacation. Mom? Mom: Let’s do it. we could return home on Thursday and still get a week’s vacation. By proposing numerous options.
It is to the corporation’s benefit to address that problem here and now. Andrea. Joe: That is certainly an option. you have a job-performance problem. you know that wasn’t an okay to settle. she made a two glaring errors in judgment. Andrea: We’re hired for our expertise. I really see your options as follows: You can leave the corporation. or you can work out a “supervision” agreement with me so that I can better monitor your performance. and resents any attempt by Joe to supervise her work. Joe: Come on. We have a formal procedure that you just don’t like to follow. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. rather than to put it off on someone else or for some time in the future. 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 . The attorney for the other side has agreed to give me the additional time to file it. let me say that I’m handling the missed deadline on the pleading. Andrea: Well. 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. In the last month. It was just a comment. isn’t it? But I don’t think just moving you really solves the problem. To put it as bluntly as I can. we have a very big problem. so Joe took a “hands off” approach. Joe: Andrea. Andrea: Wait Joe. Before you start. however. Andrea: You didn’t list moving to another unit as an option. If you don’t like the way I do my job.herself to be a professional. but it doesn’t solve the problem—nor is it the only problem. Her job performance was acceptable. Joe: That’s all well and good. and I don’t see why we don’t have more independence. which forced Joe to take action. You had no authority to agree to settle the Stites case without clearing it with me.
Joe: That could be an option. I hope we can work it out. my goal is the same is yours: to create an environment where you can perform to your full potential. Andrea’s move and subsequent “approval” regime did. and propose an acceptable alternative. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. improve her work performance. in fact. I want to stay with the firm. or I would advise your next supervisor to put you on a very formal approval program. rather than my staying here. Believe it or not. But in fairness to our mutual employer. If you are convinced that I have to undertake an “approval” program. (Adapted from The Mind and The Heart of the Negotiator. then it would save face for me if it comes with a move to another unit. Joe: That’s fine with me. by Leigh Thompson. but it would still require some change in the way you work: either a demotion. lets talk to Bill about the move. It also changed her attitude about being both a professional and a team player in a corporate office. the needs of the corporation have to come first.) Making Counteroffers (The “Give and Take”) 93 . If that option is okay with you. Andrea: Well.
They have a fixed amount of money—$14. the fencing. 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). and a home theatre. (She looks over the list. In essence. then those which can be easily traded. if a buyer negotiates a $500 reduction of a contractor’s bill.) Yes. etc. Let’s agree to those things. that’s $9. Let’s see. These items often involve money). 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. 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. and finally. Maureen: First. 94 50 Practical Negotiation Tactics . or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. Example 1 Brooks and Maureen Wilson have just finished building a new home. one person’s gain is another’s loss—zero-sum. Exchange. 2) exchange items (those that can be easily traded off—one item for another item of equal value. For example. They both agreed that this is the maximum they will spend on “extras” before moving in. only those with polar-opposite interests that must be divided. 3) distributive items (those items for which the two parties have exactly opposite interests. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. Brooks: Right. Wow! We are off to a good start.000.).Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. With distributive items. This approach is an important tactic. three strategies are used. let’s see if there are any items we both want.500. then the contractor has lost $500 in revenue.
000 $3.200 $200–$2. Can we split it evenly? Brooks: Okay. Maureen: No.000 $5.500 left. that makes sense.000! Brooks: Good. $750 for lighting and $750 in the bank. which takes another $3.# 1 Sod Item Cost $1. and we both get things we want.500 $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. Making Counteroffers (The “Give and Take”) 95 . These are all permanent immediate needs.000 $2.000 $500 $1. I’ll trade your sidewalk and trees for my whirlpool bath. We have $1. which I’d like to keep in the bank.500 $500 $1.000 $1. I’d like to spend some of it on lighting upgrades.500 $5.
During that time. both sides exchanged lists of initial demands at their first meeting. Drug-Testing Program 96 50 Practical Negotiation Tactics . Pension Increase 3. Profit-Sharing 5. management and union negotiators found that a “winwin” approach to negotiations worked well. Wage Increase 4. even in difficult years. finally agreeing to split the difference on the remaining amount (distributive items). Length of Contract 2. 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). This year. 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. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years.Conclusion By taking the time to list all the items each person wanted and their cost estimates. The combined lists total thirteen different items: Desired Outcome No. All items to be negotiated and their desired outcome for each item were put in writing for review.
one Making Counteroffers (The “Give and Take”) 97 . (#5) a new drug testing program. Finally. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11).Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. Because they held opposite positions on these issues. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Next. They proceeded to draft the language to settle these issues. Next. signed. Overtime Assignment 8. Subcontracting 12. Health Insurance Employees pay 20% Continue cur. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground. Paid Funeral Leave 9. At this point. Clothing Allowance Based on senior. and removed from the table. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7).Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. they began to trade off the exchange issues of similar value and nature. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Job Security 13.6. eleven of the thirteen original issues to be negotiated had been agreed to. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). Shift Differential 11.Distributive rent program co-pay Exchange Exchange 7. and (#9) to continue the often-discussed no strike/no lockout provision. No Strike/No Lockout 10. First.
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. if both parties start from reasonable positions. but it can be very effective when a negotiation situation involves several issues. 98 50 Practical Negotiation Tactics . exchange. Conclusion This tactic is simple. you can use the process to settle many of the other issues on the table. Third. or distributive so that the negotiations can begin in an organized manner. 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. negotiations begin on a positive “win-win” note. but a middle ground was eventually found on each and negotiations ended.side’s gain is the other’s loss. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. The tactic offers several advantages: First. 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. Second. They then identify each as compatible.
and refrigerator. will make your opponent feel good about the process. the location of the TV. so I can study. I’m not interested in a curfew. It is especially important that you do two things: take your time before rejecting any offer from the other side.Tactic 24: Wait to Counter As the negotiations begin. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. stereo. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. last item: I’d like it quiet in the room at night. each side is expected to put an offer on the table. and can help you reach your goal. Rob stays busy all day and evening with other activities. This isn’t high school. they decided to establish “room rules” so that they would both be comfortable with the room assignment. Mutual respect must be part of the negotiation process. and studies late into the night. even if you aren’t going to accept their offer. The final issue had to do with “lights out” and quiet times for studying. So when’s a good time? Jasper: (without hesitation) No way. Jasper: Finish or not. Rob: Wait a minute. They agreed on which part of the room each would have. and looks like you are belittling them. 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. Waiting a respectful amount of time to counter. Let me finish. you know. Rob: Making Counteroffers (The “Give and Take”) 99 . Since they didn’t know each other well. so he wants a quiet room late at night. and from a strategic standpoint. and on what would be considered acceptable “sharing” of each other’s junk food supplies. do not offer a counterproposal right away. 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.
Jasper: Midnight. 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. b) written complaint to a floor manager if the matter is not resolved in 5 days. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . the positions of non-union crew leader and floor manager would both be eliminated. and the union foreman would report directly to the plant manager. Under ABC ‘s contract with the union. and that’s it. 10:30 p. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader.m. No agreement was reached. and that’s not negotiable. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. and d) a hearing with company owner if the matter is not resolved in 20 days. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. I want a 10:30 p.) Listen. is all I’ll consider. The appeals procedure would have to be altered to reflect the restructuring.m. Under the restructuring. but changed his mind when he saw Jasper’s attitude. midnight during the week is the only thing I’ll consider. curfew on TV and other noise every night. Rob: (there is no hesitation in this voice) No. Jasper: (without taking a breath) At best. The union contract required that management renegotiate this change in the grievance procedure with the union. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days.
(Note: An attitude change sets in. because those management layers are gone. no one can complain about that. the union arrived at the meeting prepared to support a streamlined process that called for the employee with a grievance to discuss it first with the union foreman. Union: Hold on.any objection to the change. ABC Company’s negotiator explained the management changes soon to be implemented. this redraft is a very simple change to the contract. but to dictate. We’ve got a couple of alternative models for you to consider. An aggrieved employee can make a request for a meeting with the plant manager. Union: You obviously didn’t come here to negotiate. Certainly. Union: As you know. and everything else stays the same. The redraft is simple and straightforward. We just cut out two steps. rather than go on to appeal it to the company owner. If the union foreman felt that the grievance had merit. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. and began the negotiation session concerning the grievance procedure. The union was prepared to accept the plant manager’s position as final. 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. We’ve simply eliminated the first two steps. rather than as a judge on the merits of the grievance. he/she can take the grievance to the plant owner for a hearing.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . Company: Here’s the new draft of the grievance procedure. Company: (no hesitating) Trust me. and I’m certain your members will be okay with it. Company: (rather abruptly) Let’s not drag this out. our grievances often signal to management that there are real problems on the shop floor. In fact. We’d like you to consider the plant manager’s role as a problem-solver. After initial pleasantries were exchanged. the employee and the foreman would meet with the plant manager and attempt to resolve it.
and we’ll strike if we have to. This time. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. You can’t be serious. Union: We’re very serious. 102 50 Practical Negotiation Tactics . After a cooling off period. the company entertained the ideas the union had tried to propose before. the two parties did meet again.two-step grievance procedure instead of a four-step procedure. rather than in the 35 days the current system provides. 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. We’ll see you on the picket line.
Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. If you are flexible. 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). They’ve done the research. Next year. and now have a new baby girl. Nancy: Sue. you can adjust your demands or goals to include such new ideas. But after the negotiation gets started. two sisters. and identified the range of options they feel comfortable with negotiating. and ten nieces and nephews) always ate around 5:00 p. Bill’s family (parents. one sister. Bill. Sue’s family (parents. and we’re really not able to enjoy either one. it’s just too much to do both. four brothers. Making Counteroffers (The “Give and Take”) 103 . and at least five aunts and uncles) ate around 7:00 p. Bill’s family won. we’ll get to our side. They flipped a coin to see who “got” them and the new baby this year. established goals. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. Example 1 Sue and Bill have been married four years. and do not dismiss something said by your opponent just because it came from the opponent. their spouses. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Sue’s sister Nancy called her to talk her into coming anyway.m. Even before the baby’s arrival. Mom says you. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. two brothers. The couple used to have Thanksgiving dinner at both families’ homes. 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).m. Be open minded. Sue: Yes. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house.
it’s okay with me if you can sell it to everyone else. 104 50 Practical Negotiation Tactics . but she won’t tell you. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. and it became the family’s new tradition. So that doesn’t work. either. some people have to work on the Friday after Thanksgiving. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. I know that I would rather not do two Thanksgiving dinners on Thursday. I mean. Bill won the coin toss for this year. I thought of asking Mom if she could move dinner up to noon or so. Nancy: I’ll let you know. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. 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.m. Mom’s very upset. Sue: Next year. Thanksgiving is Thursday. Celebrating the next day seems odd. Nancy: If we keep the time at 5:00 p. 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. the holiday will be over. There’s nothing “special” about Friday. she suggested a unique alternative. When that goal looked out of reach. Nancy: We’d make it special by all of us being together. Sue: I don’t know. I bet everyone could make it on Friday. 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.Nancy: It just won’t be right without you guys. By being flexible.
but we can’t fund all of the $12 or $15 million. a non-profit organization for orphaned children. We only have maybe $2 million a year to put toward this charity. the foundation’s regular annual grants come to roughly half of their available funds. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. Each year. depending on the cost of the land. Unfortunately (for Kids’ Home). City officals: We can probably give you the land for free. Kids’ Home: That’s why we brought the foundation’s officials with us.Example 2 Kids’ Home. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. but the principal of the fund can’t be touched. Foundation officals: Oh. we hope to break ground early next year for the new orphan home.000 a year for operations. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project.5 million is available for distribution to numerous charities. Kids’ Home: As you know. They are meeting with the city to ask that the land be donated by the city for the project. we’re committed in theory. The foundation has a substantial endowment fund. the interest income of around $6. Estimates for building a new orphan home ranged from $12–$15 million. but we need some assurance that you will be able to build and operate the orphan home at that location. 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 . 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). Kids’ Home hoped to get $500. City: Can’t you borrow the money from a bank to build the facility.
Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. 106 50 Practical Negotiation Tactics . We’ve never committed our funds to pay back a bank loan. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. We probably would not be able to participate. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. it could end up costing double that amount. and really taxes our ability to raise funds. I’ll contact the state tomorrow. We wouldn’t want to make such a commitment to a bank. but we’re willing to look at it. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. We’re a nonprofit group. 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. If we borrowed $15 million at 10% interest.Kids’ Home: Borrowing the money gets very expensive. We’re not familiar with that program.
and we would very much like to talk about how we can resolve these issues. Successful negotiations depend on trust. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. you might not want to reveal all of your priorities at first.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. Mr. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. The Jones family suspected that the Smiths called the police. At the same time. They asked to meet with the Smiths to talk about these disagreements. it is not acceptable to lie. In order for a negotiation to be successful. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. Jones: We’ve obviously gotten off on the wrong foot. Mr. and often took up all the space along the street in front of the two houses. Smith: We don’t know what you’re talking about. These parties could get rather loud. the Smiths could count on parking their car directly in front of their house. and often lasted until 2:00 or 3:00 a. and trust can only be established if all parties interact truthfully. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. However. yet not reveal all of your goals and objectives. and asked the officers to cite the Jones kids for parking too close to a corner. each side has to know generally what each other wants to accomplish. Example 1 Soon after the Jones family moved in next door to the Smiths. The Smiths called the police to complain about a late-night party. It is perfectly acceptable to say that you are not ready to reveal certain things. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. Making Counteroffers (The “Give and Take”) 107 . But the Jones clan had four cars altogether. the neighbors began to have problems.m. Before the Jones family moved into the neighborhood.
yes. and was met with the following: Mr. Smith: Well. Jones: Okay. Mr. that wasn’t us. Jones: Well. the late-night parties are a problem. we would like to work out some solution. Mr. they kept it. since you’ve asked. At our age.) 108 50 Practical Negotiation Tactics . they’re hitting baseballs into our yard. and they won’t be having friends over more than one night a weekend from now on.Mr. we have a problem walking long distances in bad weather. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Mr. Almost every day. So. Smith: You know that your boys are causing our dog. I’ll talk to the boys and we’ll make sure they play baseball in the park. fine. And we’ll make sure none of our cars are parked in front of your house. Mr. and not in the back yard. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Jones: I wish you had mentioned that the last time we talked. It is really very disturbing. (A week later. In spite of the Smiths’ assurances. 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. we thought you might have called the police about our kids’ party and our cars. Is that everything now? Mr. Muffin. if they are outside. a lot of problems. Also. Smith: Well. we’re good now? Mr. Jones came to see what the problem was. Mr. but we do know that someone has complained. we’d like to be able to park our car in front of our house. the next time the boys were out playing and the ball came into the Smiths’ yard. And the music is to be off at midnight. Smith: Yes. In good weather. Jones: We’ve already talked to the girls about the parties. I guess. Smith: No.
the British firm will walk away from the deal. the tree was clearly over the fence. or European companies do.S. Unless Neno can get the Union members back to work on Monday. Jones: (at the Smiths’ door. have labor unions.S. Union officials are afraid that a Japanese company might purchase it. Smith: Well. Its local headquarters has a union to handle its international shipping. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. We would have fixed the tree if you had asked. The union knows that the company is up for sale. but Neno cannot tell the union this. irate) I can’t believe you people called an inspector on us. The British insist that a very strict confidentiality provision be part of the negotiating process. You could have seen that yourself. Neno’s president and the Union representative met to discuss the walkout. But we didn’t call the inspector. Jones: Sure. or the deal is off. Making Counteroffers (The “Give and Take”) 109 . 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 laborers walked off the job on Friday. Mr. Japanese companies often do not “recognize” labor unions the same way U. and the deal is close to being final. Why didn’t you tell us? We can’t read what’s on your mind! Mr. you’ve said that before.Mr. You obviously don’t want to be “good neighbors. Neno has been negotiating the sale of its business to a British company.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. Example 2 Neno Enterprises is a shipping company with extensive global operations. because they didn’t like a grievance decision. although none of the facilities outside the U.
Anyone who buys the company will have to honor the contract we have. If that’s going to have a bad effect on your being able to sell the business. If they do come back. I need your guys to come back to work on Monday. whether it’s for one weekend or a week. Have the guys back on Monday. maybe by next Friday or the week after that we’ll have our guys back to work. Neno: Look. this is a legal strike under the contract. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. Union: We think that the grievance decision affects our wages. And one company that is interested has a really good track record on expanding the businesses they buy. Our guys are prepared to stay out a lot longer than Monday. Neno: All I’m saying is that there is a difference. and if the guys are back on Monday. Union: What aren’t you telling me? A labor shutdown. so the union won’t be hurt by the buyout. we will resolve it to your satisfaction by the end of the day. I’ll forget all about the strike. any interruption in our shipping could affect how these buyers look at our business. I’m certain that if we can sit down and talk next week. 110 50 Practical Negotiation Tactics . It’s not the time to have one. We’ve not had a labor shutdown in 20 years.Neno: You know this is a wildcat strike and that it is in violation of our contract. I can’t really be more explicit than that at this time. I know it’s not news to you that this business is up for sale. I promise you. But if your guys are out past Sunday. is still a labor shutdown. no harm-no foul. then there’s probably no harm done. You really don’t want to do that. But I have to have everyone back on Monday. Therefore. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. We can’t put up with the kind of decision we got on our grievance. we don’t. I think it already has. We’ll meet with all of the parties on the grievance first thing Monday. You don’t want to mess up our negotiations. If everyone is back on Monday. Neno: Look. do you? Union: No. it will impact our marketability.
Because the parties had dealt honestly with each other in the past. I’m going to go along with you because you’ve always dealt straight with me. the union was willing to trust Neno—even though he couldn’t tell them everything. but the British firm will allow them to organize at their foreign locations.Union: It’s that important to you? Neno: Yes. Union: Okay. If I could. Conclusion On Monday. rather than make up reasons. But I need to tell my guys that this is important to them as well. I would be more specific. and it’s that important to you as well. Neno called the union negotiator in and briefed him on the sale. Union: Okay. we’ll be back to work on Monday. I can. Making Counteroffers (The “Give and Take”) 111 . as well. He told him that it would mean that the union would not only keep its jobs here. was the right decision to make. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. Can you assure me of that? Neno: Yes. But I can’t. 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.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
Roberto: Well. B. Felipe: (Roberto’s supervisor) Sorry. or C.000 for advertising. Take it or leave it. but no TV or anything until it’s done! (pause) Okay. and clean it. (long pause) Felipe: Let me give you three options: A. keeping her Saturday free. Felipe: Sorry. But when her mother laid out the schedule and gave her alternatives. I’ll approve $15.000 for advertising. Clean it after your game.000. Conclusion At first. Amber resisted the chore she hated. Use the $5. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . Three. Example 2 Roberto: I can’t properly advertise this new program with a $5. that is enough time. Roberto: But I need to start the direct mail and newspaper ads within two weeks. she chose the one she most preferred.Amber: row before your basketball game. but the company president does not share your optimism on this program. I have three hours. I’m not going back to him again to discuss this program. I’ll find a way to do without one part-time person. I’ll do it now. Roberto: But it will never generate enough interest if no one knows about it.000). I can accept B. but I will cut your travel budget out completely. I’ll approve $15. or we lose a whole year.000 budget! I need at least $20. Felipe: Well. but I will cut your staff by one part-time person (or $15.000 in the budget. I can’t help.
Conclusion Felipe was willing to think “outside the box. which was his goal. One alternative.” He offered Roberto three alternatives of equal cost. Roberto believed. 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 .
I have to tell you that while I appreciate what you have done for me. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. and 118 50 Practical Negotiation Tactics . the promotion had not yet been approved. you are a valued employee. If his opponent cannot agree to the demand but does not want to end the negotiations. It was 16% less than she had been led to believe she would be getting. inviting a response. Susan: I hope so. received a glowing report from her boss on her job performance. You know my commitment to this company. but one side comes back with a non-negotiable demand. Example 1 Susan. Unfortunately. 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. The negotiator for the other side says nothing. he can make an open-ended statement. After a few minutes of silence. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. Jones. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. I think you would agree with me that I have performed well above expectations this past year. Jones: I certainly do. This should have resulted in an automatic promotion and a sizable pay increase. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. I very much appreciated the fair job performance review you gave me. 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. She was determined to hold her ground for at least a 13% pay increase and a promotion. Here’s how the negotiations went.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. nearing her third year with the company. Susan: Mr.
it could help. of course I will be glad to do that. Once he acknowledged that both items might be awarded sometime in the future. if management can see their way to giving you the pay increase now. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. maybe we can talk about the promotion later in the year.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. and sell it to management that way. I could probably find a way to phase it in over a two. and I think that I really haven’t been dealt with fairly. and I’m sure management will agree. I would very much appreciate it if you could ask the company to reconsider. I really want you to stay with the company. I suppose I could get the promotion approved with the proper presentation. I must ask you to try to get both. but a pay increase of that size might be more difficult. Susan’s silence prompted Mr. Promotions of this type are all but automatic around here. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. Conclusion Mr. (says nothing) Or. Jones to continue to offer solutions. Okay? (says nothing) Let me check it out and I’ll get back to you.or three-year period. the company’s refusal to grant them now was a harder position to support. Making Counteroffers (The “Give and Take”) 119 . Well. because I feel my future with the company might be at stake here. If there is some flexibility in your request. (says nothing) If I can’t get that pay increase approved right now.
The mayor. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. The parties agreed to continue the previous terms of the agreement. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. Mr. I don’t think it’s a problem. She has not decided what she’s running for. by saying that she might run for Chair. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. but now they’ve got to ask what Madame Mayor’s motivations are. and until she does.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. and were trying to settle on new and expanded areas when one of the elected officials (Ms. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . Also. her plans really don’t have any bearing on these negotiations. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. Town Council Chair). Town Council Representative: I think you’re wrong. has colored these negotiations. He decided to push for a simple renewal of the original terms. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. Mayor’s representative: No. Mayor) said that she was considering running for office. This is how the negotiations went: Town Council Representative: Well. The term of the original agreement was nearing its end. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. My bosses might not have been inclined to expand the agreement anyway. The end of the agreement coincided with the election cycle for the two towns.
represents have to worry that her desire to switch governments might taint the negotiations. He either had to end the session or figure out what to say to reengage the other side. I hate not to attempt to add some additional areas to the agreement. Making Counteroffers (The “Give and Take”) 121 . Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. I’ll go back and tell Madame Mayor your position. In the end. the Town Council representative’s position prevailed. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. Conclusion By remaining silent. Mayor’s representative: Well. I don’t know what her reaction will be. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. the Town Council’s representative left the mayor’s representative with no room to maneuver. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. and the agreement was renewed with no new provisions.
This range for maneuvering is not the same thing as the list of items you make at the outset—it’s the last space separating you and your opponent. and began to renovate it as a home and a pottery shop. Joe. in a small clearing. Having an iron-clad demand probably won’t give you enough room to reach an agreement. Madeline: Hi. As was sometimes the case in these parts. or we will be at an impasse. the brook was the property line separating her property from a neighboring farm. Madeline. you should always enter the talks with a good idea of what you are willing to agree to. when one of you might say.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. I have a problem.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. You will have to remove the rock barrier. The property came with three acres of forest alongside a meandering brook. It calls for compromise. after the gazebo had been there for about five months. 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. Obviously. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. The brook 122 50 Practical Negotiation Tactics . had redirected the brook further into her property. She discovered that a rock barrier. the brook and rock barrier are on my property. Neighbor: Well. Madeline built a gazebo about 500 yards from the brook. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. She traced the brook back along its course to see why and where it had changed its path. Example 1 Madeline bought an old farmhouse outside of a small town. The reason I built it was so that I could protect my patio. she noticed that the brook came within 100 yards of it. One day. which an upstream neighbor had built. “I have to have this.
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. Madeline: Yes. if the brook is redirected. She left room for a compromise. I’ve lost 400 yards of property on my three acres.extended right up to my back door when the rain was heavy. and allow the neighbor to protect his home. Then. Madeline: Well. What if you removed the barrier for a short time. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. you have not only threatened my gazebo. she widened her range of options. My neighbor on the adjacent farm wants to sell part of his property for a housing development. Also. When she found out that this was not going to solve her neighbor’s problem. 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. what I need is to protect my property line and my gazebo. Madeline: But by diverting the brook. Neighbor: I’m sorry. I understand that. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. I couldn’t have that. Neighbor: I can do both of these things. which enabled her to achieve her goals. This will put these houses right next to me. restore her property line. It might not be necessary to make such a dramatic change. but you’ve changed the boundary line of my property. and return everything as it was. I can’t have the brook in my house. I won’t remove the rock barrier. but I don’t know what I can do about it. Making Counteroffers (The “Give and Take”) 123 . By expanding the range of options available to resolve the dispute. Madeline was able to protect her gazebo. at least I’ve maintained my property line.
and the premiums for health care just keep going up. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. The projections for the next five years were that these costs would increase to about $1. This is just a cash-flow problem that your members have to understand.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000. the company can make your pensions much better.000. But only a few of our people are close to retirement age. as it has always been. what they really need is for you to cover the costs of dependent coverage.000. As best as we can tell. and are willing to keep pension benefits the same. we know that health insurance premiums might skyrocket. Company: This could not come at a worst time for us. Over the last five years. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000 figure. Over the next five years.000. with all wage and operations issues resolved fairly early. then the pension benefits overall will increase by $10.000. and we know that with this new contract term of five years.000 to cover the premiums for dependent coverage. The pilots want dependent coverage paid for by the company. dependent coverage could cost us $1. With long-term planning and investments. the airline paid a total of $200. If we invest the $200.000.000 a year over the next five years? Company: Yes. 124 50 Practical Negotiation Tactics . The company wants to trade paying for dependent coverage for better pension benefits. This would be a better benefit in the long run. you are taking a risk on the costs increasing. The airline industry is in a slump. However.000. that would be the minimum increase. And we cannot afford that $1.000 (which we reasonably should have expected to pay in premiums) in the pension account now. Everyone was afraid that the dispute would cause an impasse and a possible strike. Pilots: Look.
the company will not be expected to give us this benefit. If we can get two or even three years out of the $200. if they were that high. or invest in the pension plan? Company: Yes. then those funds will not be available to invest in the pension plan. we are. Company: If the company spends the $200. The health insurance market stabilized. Company: Then it’s okay with us. however. so the decision to be flexible was a good one.000? Once the cap is met. with a cap of $200. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes.000 the first year on the premiums. that would be worth it. The pilots expanded the range of options. Making Counteroffers (The “Give and Take”) 125 .000 to either pay one year of the premiums. Conclusion The company was committed to limiting its exposure to $200. and the pilots knew what to ask for when the contract expired. by agreeing to let the company cap its exposure for dependent health coverage. can we agree to a year-to-year agreement on dependent coverage.000 actually carried them through four years.Pilots: But you do have the $200.000.000 available. The $200. 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.
I just can’t imagine the monthly payment on a $45.” and “low monthly rates” are examples of the salami tactic. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. be sure to add up the total cost. I love this car.000 for a Volvo? I bought the one I’m driving for $19.500! Saleswoman: Yes.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.000 car.… (20 minutes later) Saleswoman: So.” 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. Buyer: Way too much! Saleswoman: Well. if I can give you this car with a $300 monthly payment. I recall the day you drove it out of here.” “affordable weekly payments. Saleswoman: I’ll be right back. it’s a deal? 126 50 Practical Negotiation Tactics . Saleswoman: With your 740 in trade. and compare it to your strategic objective. Example 1 Car buyer: What. what monthly payment did you have in mind? Buyer: More like $300 per month. Buyer: Yes. do you want to look at something else? Buyer: No. If you are on the receiving end of such a tactic. I guess it would be around $600 per month. $45. but that was several years ago. Phrases such as “for only pennies a day.
Making Counteroffers (The “Give and Take”) 127 . but what else must I buy? Only the basic service for $8. I can afford $6. do you want Disney? Yes. (looks at the numbers) That looks good. Sure. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.99 per month.” she had him—she worked around the $300 slices.00 per month for your service. you can get the Disney channel for only $5. down payment. and added the trade-in. Let’s see. You can do that.Buyer: I don’t see how you can do that. But my neighbor pays $39. Once the buyer volunteered that $300 was an affordable “slice.00 per month. I can’t discuss another client’s account. it will be a five-year lease. I can’t afford that much.000 down.000 price into “slices” the buyer thought reasonable. Great! So. as promised. can’t you? Buyer: Yes. and payout slices to reach the total price she wanted.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. Instead of a three-year lease.00 per month. with your car and $6.” She decided to cut the $45. do you want HBO? How much? $5. but let me see the numbers. Saleswoman: Simple.
00 per month was far too much.99 per month. The total is $38. we had that before.00 per month. 128 50 Practical Negotiation Tactics . Thanks. What about the music package? Yes. Any other kids’ channels? Yes. 3. they asked about the Cartoon Network. 2? How much? $8. Yeah. That’s $5. and my wife wants the old movies. and SI 1. I really want the sports channels. instead of one total amount. but he agreed to six “salami slices” for a total of $38. But that’s all! Then we’ll hook you up on Monday.00! Why? Because he judged the per-slice price to be reasonable. Disney is for the kids! The sports channels are for me. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00 a month. Okay. 2.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1.00. That’s another $5. Conclusion The owner thought his neighbor’s service at $39. Great.
Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. and the use of humor. and it can destroy your credibility. the traditional car salesperson might tell the buyer. so are you ready to make a deal? This might convince a few buyers. angry negotiations. In some cases. When both sides believe that each has equally strong positions. however. Applying Pressure 129 . “I can only guarantee this price until 6:00 p. it is effective. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution.m. but others will walk out the door. which can be successful if the opposing team has two or more members who hold different views of an issue. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. Tactic #33 (The Bluff) is a classic pressure tactic. turned off by the tactic. For example. 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). 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. today. pressure tactics should probably be avoided. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. It should be used with caution: It can end negotiations immediately. but in tense. Humor might not look like pressure.
but it is not a good idea to exaggerate what you are offering or what you are giving up. It 130 50 Practical Negotiation Tactics . together and separately. Such exaggerations are easily revealed or uncovered. The two couples used the sailboat a lot the first couple of years. Don and Abby now use it less and less. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. and we need to talk to you about how we can buy you guys out. Abby really loves that boat. getting a divorce and each moving away (and would have no more use for the sailboat). 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 they will weaken your credibility. Chloe and I would like to take the sailboat with us. boat prices have really gone up. We’d hate to give it up. In the last couple of years. big news! I’ve been promoted. Don: Absolutely. I don’t know. but Don.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. I think Chloe and I would be willing to pay more than just the money you guys put into it. And we don’t want to be unfair. and we’ll be moving south in the next month or so. Although I do think there ought to be some consideration for the two years you had use of the boat. Lacey: I know. Lacey. Your opponent will consider you untrustworthy and might even be insulted by your attitude. in fact. Lacey: Don. 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. Lacey and Chloe didn’t know that Don and Abby were. he and Chloe wanted to buy out Don’s and Abby’s interest. Don: Wow.
) Lacey: Don. I thought you understood how important this boat is to Abby. though it’s not so happy. I was afraid something was going on when you all-butstopped joining us on the boat. (Around the same time. I’m sorry. and neither of us put much in for upkeep. Abby is having this conversation with Chloe) Chloe: Abby. and I’ll get back to you. and we’re moving farther south. but separately. It’s about time now for some major investment.is just about the most important thing we own. Don: Lacey. Abby told Chloe about the divorce and about how she never wants to see the boat again. Let me talk to her. Lacey: Cut it out. big news!! Don got his promotion. We’ll be leaving here for the Midwest. (After Lacey and Chloe had a chance to talk. Abby: That boat. Don and I are getting a divorce. After all. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. the boat has depreciated. he likely would have found himself in a stronger negotiating position. I’m surprised by your attitude. 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. It just reminds me of how happy Don and I used to be. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. I’ll be glad never to see it again. Chloe: Oh. which you would have to share if you want to retain half-ownership. Lacey and Don’s negotiations changed considerably. I’ve been thinking. Abby: Well. Applying Pressure 131 . I have big news too.
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 as you know. they will make their decision based on a review of the stock price that day. but this has been such a crazy situation. I’m afraid that with this current information. we will need to make drastic cuts in our operating costs just to survive. 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. And while these fluctuations have little to do with the health of the company itself. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. I read in the papers every day that the market is still strong.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. 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. in this global market. 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. Union negotiator: The stock price might be down right now. I think you’ll have to agree with me that wage increases in this next contract will not be available. I’ll have to show them 132 50 Practical Negotiation Tactics . Company president: Well. in fact. and that the economy is strong. The current stock price is the lowest it has ever been. the situation in the stock market is not good. the company president decided to use the stock price as a negotiating tool during the current union contract talks.
We think this company is very healthy and can withstand the temporary downturn. and the union ended up with a substantial increase in their contract. no concessions! In fact. here’s what happened. The union became hardened in its position that the employees needed wage increases in the new contract. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. but I checked it out and it’s not totally true. When negotiations resumed. Applying Pressure 133 . okay. Union negotiator: Well. let’s talk about it. the company’s position was weakened even more. They told union officials that it would be very rare for a bank to make its decision solely on stock price. he lost the trust of the union. Give me your proposal for wage concessions. Conclusion Because the company’s president over-emphasized the impact of the market on the company. Company president: All right. (In the interim. If you put it that way. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. we’d like to reopen talks on next year’s pay increase. Let’s get back together next week. 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. and I’ll have our people look at it. When the market took a swing up during the negotiations. If the stock goes up next week. Union negotiator: I know that’s what you told me. they would do a thorough analysis and look at the health of the company over the long haul. So.) Union negotiator: I’m sorry.that we’ve cut expenses to counter the losses in the stock market.
There is a chance that the tactic will work and that both sides will agree to the proposal on the table. If you subsequently agree to begin talks again. it might backfire. are you? Christy: I don’t want to be. I guess I’m just surprised. you will have lost credibility with your opponent. Example 1 Christy and Tom had been dating for about a year. they are bluffing. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. and I really wanted to see the new Lenny Bruce movie. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. Poker players know all-too-well-that bluffing can be very costly. She knew that if she made such a demand and threatened to leave him unless he made a commitment. 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. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. Both of them were still in graduate school and worked full-time. I knew you had a class. Sara said she saw you at the movies with Charlene yesterday. This can come back to haunt you. You’re not upset about that.Tactic 33: Bluff! Bluff with caution. Tom: Oh. I really hate it that you chose to see the movie with Charlene. so their “free” time was very limited. 134 50 Practical Negotiation Tactics . and they really have no intentions of doing so. We don’t have that much free time together. yeah. either. but I really am. Charlene. and she didn’t think Tom had. Here’s how the discussion went: Christy: Tom. The couple had not discussed marriage. but Christy thought the relationship was heading in that direction.
Tom: You’re serious? It’s that important to you? Christy: Yes. If Tom had “called” Christy’s bluff. It is. she paid her own way. He believed she was sincere. Actually. but very little progress had been made. if you can’t make that kind of commitment. If that’s not possible. I certainly don’t want to lose you. Tom: Okay. It’s made me realize that I want us to have an exclusive relationship. Conclusion Tom didn’t want to lose Christy. Since he wasn’t sure about that.Tom: She’s a friend who happens to be a girl. Applying Pressure 135 . Christy: I just can’t see it that way. She convinced Tom that her feelings were strong. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. I’m willing to risk losing you. Christy: What I’m saying is that I can’t accept that you are going out with a “friend” who is a woman—not at this stage of our relationship. Tom: I have friends of long standing who are women. so he didn’t call her bluff. then I’m afraid I want us to stop seeing each other. I need to have your commitment that you won’t do that. and at first he thought she might bluffing. I just thought of her because I knew you weren’t available. he had to make a commitment or risk losing her. It really wasn’t a “date”—we just saw the same movie together. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. I’m not “dating” anyone else. The union negotiators. I won’t go out with any woman friend.
First. 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. Second. but working without benefits is simply not acceptable. If we’re not able to reach agreement on this. We need an answer today. Nexon: I’m just not prepared to give you one. We’re not going to reach agreement on this at all. it will cost too much. Many of our union members who are working part-time hope to work full-time. 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. much less today. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. Nexon: I’m sorry. or else we’ll be asking the membership to strike. then all of our other demands will change. And I don’t believe you’re going to go call for a strike over this. The union members ended up voting not to strike at this time. Nexon: We’ve got lots of issues to discuss. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations.) 136 50 Practical Negotiation Tactics . we’re really prepared to go the distance on this benefits issue. Why don’t we put this one aside for now. Here is what happened at the next negotiations session: Nexon: I’m sorry. Union: You’re wrong. This is something we just have to have. Another bargaining session was scheduled.believing that Nexon would not risk a strike. Union: You don’t seem to understand. This is a critical issue to us. we want the part-time workers to apply for and fill fulltime positions as they become available. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
not blessed with many household repair skills. for example. Unions can strike at any time to achieve their goals if they have some leverage. there were times when there was no pressure and no emergency. and was forced to pay whatever they demanded. when one side has “leverage” over the other. 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. It is sometimes referred to as “pressure bargaining. Example 2 Let’s face it: Sometimes one party holds all the cards. such as the advantage of time. while the other is not—that is. his air-conditioning unit went out. Since the heating and air conditioning company held no leverage over him. Try bargaining with a plumber! This homeowner. The same kind of thing happened a couple of years before that: In the middle of August. because this is the busiest time for that industry. once had to call a plumber in for emergency repairs. If the employer is a shipping and express mail company.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. He was at the mercy of the company that could install an appropriate unit the fastest.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. he was able to successfully bargain for other services. On the other hand. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. its union has the advantage in the weeks just before Christmas. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. Since his toilet had overflowed and water was continuing to run all over the floor. The owners of professional sports Applying Pressure 141 .
however. then you are in a position where you can set reasonable demands on wages. low employee motivation.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. The employees had no power to resist the demands of the employer. despite strong resistance. can suffer repercussions in the form of sabotage. either individually or through collective bargaining. unemployment is low and jobs are plentiful. If you have a special skill that an employer needs and few others have that skill. etc. but they are less willing to negotiate several months ahead. When the employer proposed adding duties to the job classifications. When one side places undue pressure on the other side. the employer has the advantage: a supply of jobs. What goes around comes around. he didn’t have to be flexible because the employees believed that they had no alternatives. On the other hand. but before you choose such a tactic. Other employers find themselves in situations that actually reverse the leverage (when. and other undesired outcomes. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. If so. it is the union’s turn to hold firm on its demand). consider whether or not the two parties will likely meet again in the future to negotiate. A note of caution: Circumstances in one round of negotiations might give one side an advantage. will what goes around come around? 142 50 Practical Negotiation Tactics . (Team owners are notoriously unpredictable. if the unemployment rate is high and jobs are few. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. This gives it the upper hand in negotiating with employees.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. she has leverage and can more likely hold firm on her price. for example. there are likely to be long-term repercussions. benefits.
the fighting starts up again. and Susie hid them under the seat. Example 1 A father and his two daughters were on their way to visit the grandparents. Andrea had taken them off the doll. Tell Susie to let me have it. the girls had been fussy. Why? A sudden surprise can disrupt the dynamics of a negotiation. Consider making a suggestion or a proposal that completely surprises your opponent. and here’s how the “negotiations” went: Dad: You two stop fighting. You’re driving me nuts.) Dad: Stop it right now. Andrea: The doll is mine. I can’t drive if you keep this up. because you will probably only get to use it once. Almost from the beginning of the three-hour drive. Susie: The doll belongs to both of us.) Applying Pressure 143 . you have it this part of the trip. and Susie. This time. and I can’t stand it.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. About an hour into the drive. Just share the doll. but use this tactic judiciously. Andrea. Their dad tried to reason with them. (In a few minutes. you have it when we drive home. Susie: Okay. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. The doll can be shared. the argument is over the doll’s shoes. (Their dad pulls to the side of the road and turns to face them in the back seat. I took it out of the box. the little girls began to fight over the doll. Mom said so. Just because you saw it first doesn’t make it yours. We’ve got a long ride ahead of us. Andrea: Okay.
He initiated the litigation against the local school board members and several banks that invested the money for the board. charging that they breached their duty in their handling these funds. he slowed down. 144 50 Practical Negotiation Tactics . to no avail. in fact. and I hope I can convince you of that. She can have them later. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. Finally. The local newspaper was prepared to urge the auditor to end the litigation. they didn’t say another word. and reached back for the doll. and that they had invested and spent the tax dollars wisely. at great expense to the auditor’s office and the school board. The litigation itself had been going on for more than three years. He grabbed it and threw it out the window. Dad tried correcting them a few more times. but nothing else up to that point was working. The tactic was so successful. Dolly doesn’t need shoes on in the car.) Dad: Now there’s no more fighting over the doll. Both Andrea and Susie were so shocked by their dad’s action. The defendants contended that the auditor’s actions were politically motivated. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. The auditor asked to meet with the editor to explain his position. (They continued to argue and whine and pinch each other. 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.Andrea: Give me the shoes back. Conclusion Dad’s use of a “surprise” tactic was extreme. Dolly has to have her shoes. Daddy said I got the doll on the way to Grandma’s house. I want the shoes. I think I have acted properly. so it was worth the risk. Susie: Daddy didn’t say anything about the shoes.
I really think the community would be better off.Editor: I’m certainly willing to listen. Auditor: I appreciate their arguments. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. I think I have something here that will convince you otherwise. one of the banks settled with my office. as a matter of fact. That’s really the reason this has gone on so long. Applying Pressure 145 . Obviously. there’s just nothing to back up your allegations. Here are the papers. We believe the other defendants will soon follow suit. I guess we’re finished here. This morning. rather than drop the case. this case needs to be dropped. but I have to warn you that from what I’ve seen and heard so far. From what I can see. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. Conclusion The editor wrote an editorial urging a resolution for the good of the community. They’ve been making that same argument from the beginning. Auditor: Well. and a significant amount of money will go toward the tax fund. They are very persuasive that this is just a political battle. perhaps you should just cut your losses—and just drop the suit. Editor: Well. Editor: Well. Thank you for coming in. and it is costing your office money and good will. but recommended that the parties reach a settlement. but actually superior to some other entities you supervise. the bank would not have done that had we not proven our case. Your reporters will probably want to follow up on it. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes.
although getting your license and getting a pool table are connected. especially Kevin. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. but I think it will get a lot of use. Kevin: So am I. you might be able to dilute their power by identifying their different interests and addressing them separately. I know we’ll all enjoy it. Mike knows he needs to get either his wife or his son on his side. Tina: I’m really against this pool table idea. Kevin is against it because he is turning 16 years-old soon. Tina and their son Kevin are against the idea. Mike: I know. 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. and a car is more important to him than a pool table. I want to talk about a car! Mike: It’s really not one or the other. Kevin: I don’t really care about a pool table. they’ll be mobile! The last thing I want is for them to be out cruising around. night after night. I can remember spending hours playing with my friends and family when I was growing up. If the other side involves more than one person. 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. Dad. I’d 146 50 Practical Negotiation Tactics . try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Tina: What do you mean? Mike: When Kevin and his friends get their licenses.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic.
What happened? Applying Pressure 147 . She noticed that Jim (another member of the union’s negotiating team. A pool table could attract them here. Mike: I really do. Wylma: Tom. has just presented the company’s initial wage offer. only Kevin did. I’m surprised. she joined his side of the debate. Tina: Well. received it without comment. don’t you think you guys would use it? Kevin: I guess so. then maybe it’s not such a bad idea. Tom.like them to hang out here more. And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. and Kevin and his friends use it often. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. the head of the union negotiating team. They bought the pool table. Here’s how the negotiations went. 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. some. But I’m not going to hang out here all the time. Instead of both opposing the idea. the chief negotiator for the company. A number of contract changes have already been worked out and Wylma. Kevin. I thought we were making real progress. Conclusion Mike found an argument that divided Tina and Kevin. Once Mike convinced Tina of the idea’s merits.
you’ve seen our sales projections and production costs. Let’s start again tomorrow morning. as Jim can point out to you. Wylma: Jim. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. Your demand is totally unreasonable. When the negotiations began again. Wylma: Tom. forcing them to reconsider their demand. Wylma: Let’s take a break. these are accurate. 148 50 Practical Negotiation Tactics .Tom: Wylma: Nothing happened. these are our actual accounting figures. But Tom. Wylma distributed copies of financial data that showed the company’s current condition. Jim? Jim: Yes. Do you think this is reasonable? Jim: (looking uncomfortable) Well.) Wylma: Now Tom. I think you need to rethink your demand. you certainly are aware of our financial situation. but he added some workplace changes that Wylma was comfortable negotiating. This is just what we think is fair. you’ve heard our demand. Tom had reduced his wage demand significantly. Tom: We don’t think so. (When they resumed. Right.
I don’t feel Christmas in the way I used to. 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. married. We can’t afford to buy each other things we really need. Applying Pressure 149 . Sometimes the argument got heated. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. but as the children grew up and had families of their own. Madison: Okay. some of the siblings decided they liked giving presents to one another. Cory: Madison. Ever since Mom and Dad died. but it is really important to me. That will just make a bad situation worse. You are almost 40 years old. get over it. and it makes me very sad. but the thought that matters. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. so you can find a way to quickly neutralize it. and had children. When all of their children were small.Tactic 38: Break the Tension Tension is inevitable in most negotiations. especially between Madison and Cory. it was easy to agree on just giving presents to the children. but it should never be at anybody’s personal expense. Example 1 The four Jones kids grew up. Humor often works to break the tension of the room. so what’s the point? I don’t need another tie! Madison: It’s not the gift. I want to say something. Stay alert and watch for clues that a negotiation is about to get out of hand. the oldest and youngest Jones children. so pressure grew to draw names and exchange gifts. Tempers flare and people say things they shouldn’t out of anger or frustration.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.
” but she needed Dara to play with her. each side must decide whether or not one more compromise will produce an agreement that they will later regret. or maybe tomorrow. it is better not to compromise. Both of the little girls liked to play ball when they were outside. how about going out to the yard for a while? You can swing or play ball. When that point is reached. Isn’t it “later” yet? Right now would be a good time to go outside. the exchange will be between things of equal value. I want to play “Prince and Princess. If there is resistance to compromise. don’t you want to play? We could color before your mom comes.” Dara. was ready to color. who was outside with older children. and that doesn’t happen without compromise. 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. but since the other children in their room were not there. the individual might be afraid that the exchange isn’t equitable). however. If I can be the Princess.: Julie: Dara: Julie: Girls. Okay. Then we can color. not the Prince. One day. they would have to play ball with older children. 154 50 Practical Negotiation Tactics . I want to play “Princess” and I want Dara to be the “Prince. At some point. (In a successful negotiation.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. Example 1 Julie and Dara both attend a local preschool. they were the last children left in the playroom for the remaining two hours of the day.” Can I color now? You said we would color later. Julie wanted to play “dress-up. The day-care worker wanted to take them outside for a while so that he could visit with his friend. Dara. Mr. C. C.: Julie: Dara: Mr.
and teenagers attracted by Making Progress 155 . 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.: Julie: Hey. however. the owner had to supply additional parking. the parking lot will start to look trashy. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. We don’t want to go outside. you can come back in and play “Prince and Princess. and they still had time to color. The owner decided to try for a variance. wouldn’t you like to go outside first? After you swing for a while or play ball. The existing parking lot didn’t meet the current parking standards for that size theater. According to the city’s zoning laws. When his variance application was made public. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot.” No. The owner and a small group of neighbors met to talk about these problems. 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. We want to play dress-up and then color. Mr. Conclusion The children stayed inside and played dress-up. They did all the compromising they were willing to do.Mr. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. neighbors became concerned about the changes to the mall. C. or apply for a variance. C. failed to offer the children something that was as important as the plans they had made.
All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. Many of our homes back up to that lot.the theater will start to hang around and maybe wander around our yards at night. We’re just not convinced. even though I’m not adding any parking. driveways on the south side of the mall are along the east and west side of the parking lot. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. Right now. I’m afraid. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. only when that lot is full would cars come around the mall and park on the south side. You could have all of the traffic enter from the north lot. In fact. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. The neighbors: Owner: 156 50 Practical Negotiation Tactics . the closest parking to it is along Elm Street. We hope you’re right. but it’s not ever full. and break in his door. We’d really like to block off that cut-through and have the theater face the south. What if I changed the entrance to the middle of the lot? That way. with your plans to put the entrance of the theater on the east side of the mall. not having direct access to the south lot from the street would be unworkable. the south parking lot has not been used much. So. With the Comedy Club and the grocery store on that end. I could put a privacy fence along the east and west—at the backs of your yards. We’d like you to prohibit cars from entering or leaving from the south lot. Not having in and out traffic to the south of the mall is just not very practical. as you said. And. the north lot is used more. lights in and out at night can be very annoying. and we’d like to keep it that way. if I agree to move the theater entrance to the south side. Right now.
add a new entrance into the south lot. The compromises were what everybody could live with. there could still be access from the street to our garages—just not to the main parking area. set back a driveway width.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. and they discouraged patrons from parking on neighborhood streets. If the fence was set back the width of a driveway onto your property. The fences created a buffer from the lights and noise. the neighbors reported that they were very happy with the way it all worked out. Teens can form into gangs if left unwatched. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. Conclusion Both sides had to give up something on certain items in order to reach agreement. Making Progress 157 . Agreed. and make sure the parking lot is kept clean. 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. put a privacy fence along both the east and west sides of the south lot. And a year after the theater opened. then will you agree not to push for increased private security? Yes. Now you’re talking about considerable expense. however. If I agree to move the theater entrance to the south.
158 50 Practical Negotiation Tactics . and didn’t stop until 6:00 a. thinking that you will be just as easy to work with on the sticky issues. and what kind of complaints might have already been made. Joan: Hi. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Lonely’s only companionship. Joan decided to at least try and talk to the neighbor. Mrs. She learned that everyone in the neighborhood had complained at least once. respectful. they had gotten nowhere. and I just moved in next door. Lonely. incident was usual or unusual. Lonely: If you’re here to complain about my Rocky. Mrs. If your opponent is aggressive or angry.m. because you are the one to set the tone for agreement. so her neighbor’s barking dog came as an unpleasant surprise. 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. and started to get upset. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. but going out of your way to be friendly is an especially helpful tactic.m. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. and that as angry as they were. Close your windows at night and don’t listen. professional. but be friendly. The dog was Mrs. Present your position forcefully. just forget it. I’m Joan. Joan was already pretty tired. and pleasant always enhances one’s ability to reach an agreement. Example 1 Joan was new to the neighborhood. Joan had a new baby. She didn’t believe her neighbors ought to complain about the barking.Tactic 40: Be Friendly Being polite. she just didn’t think it was a serious problem. and because she was hard of hearing. This gives you an advantage.m. Your opponent might give in readily..
Lonely: Joan: Mrs. I’d like to introduce you to my new baby. I might have to talk to you about Rocky. I can’t pay for something like that. No. I know that some of these people around here don’t like him. Lonely: Joan: Mrs. too. Lonely again. no. Do you think his age has contributed to some of that? You know. Lonely: Joan: Mrs. He’s been keeping me up at night. Well. isn’t he cute! He’s a handful. I’ll see you. Here’s my little angel. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. I’ve only got my Social Security. The barking at night has been mentioned to me. don’t worry about that. Maybe I could come back tomorrow and bring him? Oh. though. I stopped by and visited with him over the fence this morning. then. He’s a real comfort to me. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Making Progress 159 . How long have you had him? Almost eight years now. Why. I need to get the baby home. sure. I guess that would be okay. Who.) Hi. Mikey. I sure hope he starts sleeping through the night soon. I guess so. it’s probably because they just haven’t had the time to get to know him. by the way. I’ve got a friend who is a veterinarian. is a really sweet dog. When he does. (Joan’s sleep was disturbed by another night of barking. I just wanted to come by and introduce myself. not at all. but she took her baby and went to visit Mrs. Lonely: Joan: Mrs. Lonely: Joan: No.Joan: Mrs. Well.
its 150 management and sales employees could continue to work in Happy City. Under its new corporate structure. he prescribed medicine that gave Rocky a more regular sleep schedule.S. and Mrs. Lonely’s needs and arrive at a workable solution to the problem. 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.Conclusion Joan’s friendly approach enabled her to understand Mrs. The barking all but stopped. When he heard the news on the radio. I think that if you could have let me know ahead of time. 160 50 Practical Negotiation Tactics . Company ZZZ: (surprised) Well. Hearing about this from the press obviously puts you in a very embarrassing situation. After Joan’s veterinarian friend visited with Mrs. Joan took up contributions from the neighbors. Here’s how the meeting went: Company ZZZ: We’re very sorry. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. agreed to meet with the mayor. U. that’s very understanding of you. They anticipated that it would be an unpleasant meeting. recognizing that the layoffs would be an issue in upcoming local elections. that the press got hold of the story of our company’s activities before we could call you to let you know. overseeing a factory in Mexico and selling products in the states. Lonely didn’t have to pay for the medicine she could not afford.. of course.A. Lonely and Rocky. It’s very difficult to make a move of this type without having it leak out. you would have. Company ZZZ. Mayor: (very friendly) I understand how these things happen. the mayor called and asked for a meeting with Company ZZZ officials.
the 150 management/sales jobs did end up moving to Mexico. Unfortunately. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. Many laid-off employees did indeed find new jobs at the plant. 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 city has a potential buyer for your plant building. The buyer is a “disadvantaged business” we have been working with for some time. We recognize that your new corporate owner is a large company located in Malaysia. and I want them to know that. This strategy worked. We just haven’t heard anything yet. Mayor: Great! Let me know when we can talk again. so we need to understand how we can affect their decision on keeping an office here. and the mayor was reelected. By the way. because I’d hate for us not to make an appropriate pitch to them. You’ve been very understanding about this. Making Progress 161 . It’s possible that some of the 300 laid-off employees will find work at this new endeavor. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. They need a really good deal on the plant price.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. Would you be in a position to talk to me about such a deal. 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. Company ZZZ: I’m not sure what to tell you on that. or would we need to involve the Malaysia group? Company ZZZ: Certainly. Mayor: Please let me know as soon as you can.
Susan understood the impact a tape recording can have when it reveals a lie. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. but Susan had only $20. South Carolina. had $40. threats. Alexis. and Alexis. who was disappointed to hear that she might propose such a deal.00. She borrowed a tape recorder so she could ask her father if this was a fair deal. or used to pressure the other side to agree to certain demands. Somehow. Jones’s supervisor. the younger sister. Example 1 Susan. Michael Wood. Susan denied it. age 15. this time in front of a hidden recorder.00 to spend. Then he played the tape. They might worry that the tapes will be made public or given to others. Susan repeated her demand. The two sisters had saved up a little money so that they could buy souvenirs. Alexis knew this was not fair. the accused. He asked his elder daughter about the arrangement.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. thus becoming a source of embarrassment. and Jones. or simply “bad faith” methods have been used by the other party. Conclusion For the first time in her life. are talking about a possible settlement of the issue. the investigator. 162 50 Practical Negotiation Tactics . The effect on the other party might be even more substantial if lies. Fred Adams. Alexis agreed. were on vacation with their parents in Myrtle Beach. Alexis then played the tape for her father. until Susan said they would evenly split what they bought. age 14.
Your request. And please describe your general manner. No one could have possibly misunderstood your intentions? No reasonable person. Well. Making Progress 163 . he also lost his negotiating position. and now I’ll ask you to repeat your answers—on tape. Conclusion Jones had knowingly lied when he denied the charges. So.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. When Adams set the tape recorder on the table and revealed that he had witnesses. and gestures did not have a single hint of sexual implication or innuendo? None at all. I simply asked her to make copies for me as quickly as possible. I think I can write my recommendation. Mr. He failed to think about what might be the next step. Jones suddenly realized that his strategy would not work. “Do what I want.” meaning something other than copies? No. Starr. Mr. you are aware that the next step in this process is to ask witnesses to come forth. You never touched any part of her body? Not even accidentally? No. So you refuse to repeat the answers you just gave us? Yes. But by refusing to repeat his answers. Appleton both claim they saw the incident and will testify. Ruiz and Ms. stares. exactly what you said to Ms. And you did not threaten her job if she did not. (a long pause) I want to see my lawyer. I’ve brought a tape recorder with me. to quote you. Jones. Stuart.
Their dad instructed them to share the candy bar. Realizing the potential of getting the “smaller half. because you did the cutting. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. is usually careful about dividing the object into two equal parts. one person is given the task of dividing the object(s) into two parts. Many of us learned this one from our parents: After two people agree to the strategy. with the remaining part going to the person who did the dividing.” the divider. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . Roberto will get to choose which half he wants.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. Oh. the classic “split and choose” tactic might be the best way to settle the issue.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. of course. Maria and Roberto: No. 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. 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. The second person then chooses which of the two parts they will receive. Maria.
Archie: Here is the map. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. There is only one place for an access road that must serve all lots. I propose that you divide the fourteen acres into two parcels that you believe are about equally desirable: one parcel with three lakefront lots and the other with four lakefront lots. Archie: I really don’t care either. according to county deed restrictions. Then I will choose which parcel I want. Deal? Clarence: Sure. Clarence and Archie. I don’t really care which lakefront lots I keep. so we should be able to divide the property fairly. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. that sounds fair. The problem is that one of us will get four lakefront lots and the other will only get three lots.000. and wants to divide it into two separate parcels. Clarence: Right. but is not sure how to arrive at a fair split. both parties. That makes them more desirable. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Example 2 Two friends and business partners. Archie is ready to build a retirement home on the property. jointly purchased fourteen acres of lakefront property several years ago. Clarence agrees to divide it. even children. Making Progress 165 . quickly recognize the fairness of the divideand-choose method. They all have a great view and are equally desirable to build on. Give me the map and a pencil.Conclusion When two people desire the same object and it is something that can be divided in some way. Archie: That’s true. Lots must be at least one acre to be developed. They have a recent appraisal that values the property at $150.
Which would you have chosen? 166 50 Practical Negotiation Tactics . and both men were happy with the arrangement. Archie chose the parcel with the three lakefront lots. and the second parcel with four lakefront lots and one other lot.Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots.
They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. With a great deal of effort. miles from their home. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).” Under store policy. and the delivery carrier doesn’t set up mirrors. However.” Many people have witnessed or used this effective negotiating tactic. supposedly the bargainer in the household. His tactic was to throw in a “nickel” in order to make lots of “dollars. Her husband Jason.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. is expected to dicker over the price. What started out as a single issue is now a combination of a major issue and a much smaller issue. Jason was having a hard time getting the salesman to lower the price. Conclusion The amount the couple spent was fairly large. Brenda did her part when she said. etc. “Okay. attach legs. delivery was limited to a small geographical area. so the salesperson delivered the suite himself. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . he also set up all of the furniture in a second-floor bedroom.” thus extending the scope of the negotiations. we’ll take the suite if you’ll throw in free delivery and set up the furniture.
it can be a dealbreaker. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. This experienced bargainer said. so be prepared to withdraw the nickel and dime item at the hint of trouble. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons.important item. 168 50 Practical Negotiation Tactics . If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. At the end of negotiations. we’ll agree to Health Plan A with another ½ cent on the pension fund.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. “Okay. In one case. If one party misjudges the situation.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations.
People tend to make an effort to put their best foot forward. Donna: No way! These are the last two pieces of furniture. You can go first. This creates what is called a “halo effect. decision-making meetings. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. Kathy: Then I’ll take the couch and love seat. thus creating the impression in others that the good qualities they see are present all the time. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Donna: Okay. and all the rest is small junk. trustworthy. or knowledgeable. Donna: I’ll take the bar with stools. and performance evaluations for people to come across as likeable. Donna: They match. but they are two pieces of furniture. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . Kathy: I suggest we take turns choosing which of these things we want. Kathy: I’ll take the pool table. I’ll take the color TV.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Kathy: But they are a matched set.
but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. and if the bar and stools should be one item or two. Johnny had the “halo” of an honest person. (Pause) We’ve got to settle this today and get this stuff moved.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. Let’s call Johnny Ryan. 170 50 Practical Negotiation Tactics . Example 2 During a heated labor negotiation. and he has always struck me as an honest person. I want the stools. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. I want the love seat. What for? Tell him the situation. Good idea. and ask him if the couch and chair should be one item or two. 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. The union negotiators. He’s our cousin. with a record of labor involvement that included three recent strikes. He might or might not have also been a good arbitrator. what can we do? Give me the couch and love seat! No.
Making Progress 171 . and that he did. as a consultant to review their proposal. The union accepted the proposal. He said he believed that it would work as presented by management. This time. thus bringing the negotiations to a conclusion. but his mere presence caused the union leaders to accept a management point as valid. Two weeks later. the management team hired Sam Boston. Boston went to the negotiation table with the management team. even if the proposal appeared to be valid. Conclusion The union leaders gave Boston a great deal of respect (even in areas such as budgeting and actuarial tables) because of his former position. when negotiations again stalled on a retirement plan issue. the consultant did not speak. He solemnly told the union negotiators that he had been hired to review it. During the break. Boston was widely known as a totally honest man who speaks his mind.simply did not trust the management team. The teams took a weekend break from the stalled negotiations. without any reservations. but the power of the so-called halo effect was great. On Monday. the former union president. the city management again hired Boston. They might have stretched his halo farther than his expertise and experience warranted.
000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. This offer is for more money than any four-bedroom houses on this neighborhood list. What? That’s $35. We love your house. They sold for: $225. 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. has owned the house for 24 years and is downsizing to a condo. The owner.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.500. I’ll get back to you. Sam Jones. (Next day) We’ve reviewed the records you’ve produced. and we are countering with an offer of $250. but we feel that it’s a fair offer. but the right facts presented at the right time can chill or astound and completely turn things around. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000 under the listing price! We realize that. They believe it is overpriced.000. Here’s a list of the five that are about the same size as yours.000. but you’ve priced it way too high.000.000. $237. the other party will ignore or refuse to believe the information. $235. and $237. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. Sometimes. $229. but the key is to gather facts that you might need—not just the facts that you will need.
Making Progress 173 . We accept. He found facts that supported his position. Hatfield: My staff has done a lot of research. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. No one can go over $1. and wisely chose exactly when to present them in order to make his point. and we know that only this model will meet our needs. I asked for a list of all new PCs bought this year. I’ll get called on the carpet. Conclusion The Joneses had based their asking price on the advice of a friend.000.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Supervisor: If I okay this purchase order. That’s the bottom price. Here it is. Example 2 Supervisor: You know the policy.600 unless the company president approves. The last 20 were over $2. and did his homework. if other departments have ignored the policy. Supervisor: Well. I’ll be… Okay. let’s not worry about it. Order the new computers. Well… We have a written counter of $245. who was not particularly knoledgeable about real estate. We’ve talked with purchasing and we have the authority to buy seven for $2. Conclusion Hatfield had anticipated what his supervisor’s position would be. You can’t pay more than $1.000 each.400 each.600 for a computer. Hatfield: While I was at purchasing.
But I can’t break the limit rule—it is an absolute rule here. Maureen. I can do that within the rules. If you trust me. They can help you identify or better understand what the other side really wants. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. Maureen: Well. yes. The effective use of probing questions can help achieve a favorable settlement.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. can you check out two on a card for him? Jenny: Well. you know me. I want two of these. I’m sure you would not. some people would have forty or fifty books out at the same time. I can’t check out these four books? Jenny (Librarian): That’s the policy. Maureen: Well. but you don’t want to jeopardize your job? Jenny: Yes. reveal misperceptions or lack of knowledge about positions that can be corrected. and two are for my husband. Example 1 Maureen: What. and they would all be unavailable to others. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. A maximum of three books can be checked out to a person at any one time. 174 50 Practical Negotiation Tactics . but I don’t set the policy and I can’t make exceptions. Otherwise. Would I do that? Jenny: Maureen. I trust you. Maureen: So you trust me with the books.
Making Progress 175 . it could kill us. If that data ended up in the wrong hands. What’s the policy number or date of approval? I don’t know. Babu. Jay.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. Can you get me the number? Sure. we can’t do that. Security? Right. and Kenzie. But this forces us to make decisions without complete information! Yes. Mary and Kenzie? They are 2-3 pay grades below us. but it’s because you don’t have access clearance. Brooks. Sue. and they don’t even have a use for the sales data. Mary. Who does have access clearance? Mike. (Next day) Do you have the policy about giving out product sales information? No. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. They say it’s a security issue. I couldn’t find anyone who knew it. are you sure I can’t get your information technology people to give us direct information on product sales? No. Why? Some policy? Yes.
” He intended to do this until he hit a dead-end or was able to find a solution to his problem. His probing questions turned up a critical fact. Once he discovered that employees in lower pay grades had access clearance. 176 50 Practical Negotiation Tactics .… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. Jack: Here.P. if we can have access? Mark: I guess so. Jack: Can you ask your V. that’s been the policy since I’ve been here. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy.Mark: Well. I’ll sign now. I’ll get it for you ASAP. When can I get the data? Mark: Today. Jack was able to receive clearance as well.
or even months after the first offer is presented. and the classic Walk Away (Tactic #48). 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. T Reaching Agreement 177 . which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. 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. They bring it out when a dispute arises. When multiple issues are at stake and most have been agreed upon during negotiations. 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. this process can easily result in a final settlement. hours. If friends or neighbors need to settle something but prefer to avoid the negotiation process. days. and the child learns an important lesson about life. When two parties believe they have an oral agreement. 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).Stage 7: Reaching Agreement he final stage! It might come minutes. this tactic can produce an agreement. 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. Tactic #49 (Final-Offer Arbitration) should bring about a settlement.
but his wife Nancy likes to stay put and relax. She said. Larry Snyder gets bored staying in any one place for many days. Let’s do go to Virginia Beach and Washington D.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. After days and weeks of on-again. 3) and adds one last key demand to the congratulation sentence.C. As he hugged her. 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.” Conclusion The husband was so excited about visiting Washington.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. His wife had carefully planned her exact “premature” vacation agreement. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Nancy brought up the subject of vacation again after dinner. Example 2 Negotiations can take a long time and incorporate many issues. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. D. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. off-again discussions.C. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. “I’m thinking of agreeing to your plans for vacation. 2) allows the other side to feel the release that comes with completing the bargain. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. They both have stressful jobs and look forward to their annual vacation together.
My team was afraid we would not even come to an agreement. It was so close.” Bob: Ted timed this perfectly. In our last offer. Therefore. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. When the chief negotiator emerged with his team and headed toward my team.almost willing to accept any deal. However. but we agree to everything in your final proposal…” Members of my team shouted hooray. One of the best pieces of negotiation advice is to remain fresh. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with.) Here’s what happened: Bob: I knew that the other side was similarly harried. but held firm on remaining operating principles. but also that they sensed the weariness of my team. The old agreement specified a 30-day period. My team had convinced me that doubling the time frame would create a real problem on the shop floor. Reaching Agreement 179 . “It was hard for us. as the negotiator came closer. fit. There were grins and handshakes coming from the other side. “…as long as you give us a 45-day probation period. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. but the other side continued to ask for 60 days. One operating issue involved the probation period for new employees. Ted said. We all knew that it could come down to agreement or strike. but acceptable. I felt the tension in the room. symbolizing that he was agreeing to the entire final offer. we made some small concessions on financial matters. and rested. because it makes you pretty vulnerable. he turned on a large warm smile and extended his hand to shake. The celebration had begun. (This is a bad position to be in.
180 50 Practical Negotiation Tactics . However.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.
but my Avalon is a good car. My name is Jay Vahaly. or go after you and perhaps make a new concession in order to get you back to the table. I’ve worked with you before. too.) Jay: Sue. and the lease on my Avalon is about to expire. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. Jay: Hi. if I roll over the lease to a Highlander. Jay. right? Jay: Yes. Sue: I remember you. but I thought I might want to try a new Highlander. I like it. what can you do on a 36-month lease? Reaching Agreement 181 . but his Avalon has been a good car. You bought your wife a new van just last year. the following exchange occurs. Jay. I don’t want to negotiate. (Vahaly drives the new Highlander home. be sure you think this through beforehand. here are your keys. The next morning. You had time to assess my car. Your opponent will have to either let you go and run the risk that things are really over. He stopped by Pembroke one day to look at the new models. all from Sue Wilson. a veteran salesperson. and he can simply buy it when the lease expires. Sue: Well. how did you like it? Jay: Okay. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. He really likes it.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. Whether you are really bluffing or you are serious.
but 182 50 Practical Negotiation Tactics . a successful musical instrument sales and rental store. Sue: I’ll try. Please go back and work out a lower lease payment.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. I’m disappointed. $100 more. at most. He effectively used the walk-away tactic to let Sue know that he was firm on the price. I thought I’d get a fair deal. (15 minutes later) Sue: Well. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. Jay accepted. they came down to $199 more on a thirty-six month lease. Sue: Sorry. That was the figure he was looking for. Jay. Jay: What? I was thinking the lease payment would be. Let me try again. Sue called him as soon as he walked in the door and offered another $50 break on the lease. Jay—wait. (Jay got in his car and drove home. He was prepared to keep his Avalon if the lease was even $1 more than his limit. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. (He walks away) Sue: No. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. They’ve talked about retiring in recent months. Jay.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. These Highlanders are hot items! Jay: Well.
today. a local developer.both of them love their store. Michael calls on them again with a check for $5. and I’m not interested in less. You rejected it. but their continued walkout convinced Michael that they would hold firm. One day.) Larry: Michael is here again. visited their store. I still want to develop this block. Judy: Larry. Michael: Well. they were prepared to accept $5.5 million. you’ve already told us that. with a certified check. Reaching Agreement 183 . Larry. after no contact from Larry or Judy. Larry: Yes. and I only need your building to own it.5 million.5 million. and he is offering us $4. and we gave you our price. Larry. Larry: Judy. let’s eat lunch.5 million for the building.) 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. What do you think? Judy: Larry. Michael: I have a check right here for 4. which the Bizannes accept. Larry: Michael. and I’m prepared to offer you $4. How’s business? Larry: Great! I’m surprised to see you again.0 million. Michael: Good morning. come out here! (Judy comes out from the back room. In reality. so why are you here? Michael: I’ve discussed it with my partners. go back to your office. He met with Bizannes twice before. (Judy and Larry walk into the back room and close the door. Two months later. Michael Roberts. our accountant said it’s worth $6 million.
which is generally voluntary. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. Lynne: No. Six months later. Let’s split the money. In mediation. One day Lynne dropped by for a visit and the discussion turned to the old Singer. They inform her that they put the machine on e-Bay and have an offer of $1. Lynne responded that this was their intention. In ﬁnal offer arbitration.000. Lynne told Jenny that she and her husband Gary have restored two other Singers. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. Lynne and Gary bring the restored Singer to Jenny’s house. Jenny has an antique Singer sewing machine. but they wanted to give Jenny $500 for her “share” of the machine. and would be able to restore hers as well.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Example 1 Jenny and Lynne are sisters. Keep the $1. In most arbitrations. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). I won’t take it. I offered it to you for nothing.000. In arbitration. Jenny: No. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Each party wants their offer chosen. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. We have a few dollars invested in parts and we had fun working on it. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. Both involve the use of third parties who are objective. Jenny told them to sell it. That was the deal. 184 50 Practical Negotiation Tactics . which she has kept in a barn for over ten years. 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). both sides have agreed in writing to accept the arbitrator’s decision.
the old machine was only worth $50 when Lynne hauled it away. and meet back here in 72 hours—3:00 p.m. Tina. Ralph: Right! (Friday at 3:00 p. The union’s position could have run into millions of dollars. Tina: Yes.m. Ralph: I know. Their father found Jenny’s position to be the most reasonable. binding decision on the three items. Any increase in value was due to the work of Gary and Lynne. on Friday. They should get the other $950.) Judge Ryan: Here is my written.” Lynne proposed a 50-50 split. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. after six weeks of negotiating. Example 2 Ralph: Well. so I am invoking the finaloffer arbitration ground rule we have in place.Jenny: Dad: Okay. we are down to only three unresolved items. (One week later) I think Jenny’s position is the most reasonable. based Reaching Agreement 185 . Tina: Good. As a brief explanation. but we’ve made no movement on any of them since we started. first on the health insurance co-pay. I’ll buy that. I can’t see any way to reach an agreement. I have chosen management’s offer to keep it as it is under the current contract. Then we both submit our final offers to Judge Ryan within 48 hours. At best. he did not need to “haggle” with them. My troops are getting restless. since he could only choose one offer.
Ralph: Tina: on last year’s data. It will only cost $120. and an item that large should have been negotiated at the table. and peacefully finalize a contract that contained several important gains for both sides. reasonable resolution to their last three unresolved issues. No increase has been given for six years. I’m sure you realize that we could have taken six more weeks to reach the same point. Now let’s get a signed contract. Finally. Well.000—less than 1 percent of the total package. I have chosen management’s offer because the union did not justify why the past practice should be changed. Conclusion The final-offer arbitration process enabled the parties to gain a fast. on the clothing allowance. money. but we agreed to this process. I’m not happy with your decisions. 186 50 Practical Negotiation Tactics . and stress. I have chosen the union’s final offer. At least we both saved time. Ralph. on the merit pool distribution method issue. Second. nor why their method was superior.
and decided to stop by to see if they liked the house.000. everyone is busy grappling with the details of the negotiations. Bill: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. Seller: We’re asking $152. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. The owners were selling the house without a real estate agent. Bill: Reaching Agreement 187 . They saw the “For Sale” and “Open House” signs. Bill pulled the seller aside. and while Bill and Paulette had been using an agent to help locate houses. If we shake hands on it right now. not the furniture. Bill and Paulette fell in love with the house. Example 1 Bill and Paulette had been house-hunting for some time.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. Obviously. and felt that they would have to work fast to make an offer before someone else did. we won’t be involving our real estate agent.000. they looked at this particular house on their own. We’d like to make you an offer of $150. During a discussion. They were not the only couple to come to the open house. At the very least. all the usual stuff in a sale. They finally looked at a house they really liked. and one of the other couples looked very interested. Seller: Yes. however. 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.
In her complaint. Seller: Okay. and had been prepared to drop his price to $145. he listed the stove. since he probably would have missed them) Yes.000. Sign here. the refrigerator. In the section for fixtures and miscellaneous items to be left on the property.) Seller: So. Bill: (pleasantly surprised to learn that the garbage disposal. he left the price at $150. a public agency. The supervisor assured the employer that there was no basis for her complaint. he began to have “problems” with her job performance. and the two area rugs. the house is yours.Seller: Just a minute. then we have a deal. real. but I’d like to make sure there are no misunderstandings. and two area rugs. Under the section for appliances to be left on the property. the hutch. and when she refused. (The seller recorded the offer of $150. the hutch. in fact. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. If it’s what you meant.000. and the garbage disposal. Let me just get the standard “offer of sale” form and fill out what I hear you saying. The supervisor pointed out that he had a staff of 20 or so women. he listed an attached hutch in the kitchen. I think we can work something out. look this over. that’s what I meant. When he had the chance to put the deal in writing. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and that the problems with her job performance were.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. Conclusion The seller had always intended to leave the garbage disposal. all window blinds and drapes. Example 2 Monica brought a sex discrimination charge against her employer. It worked. she said that her supervisor had repeatedly asked her out. and the two area rugs were specifically included.
and must agree not to tell anyone about the $100. It might be standard when there’s a settlement. drawn-out. but it’s not standard when a complaint is formally withdrawn. even though we’re certain we would prevail.000.000. But the employer doesn’t want to go through the expense and publicity of a trial. And the confidentiality clause is standard. Withdrawing. Look. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. by this time. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. you didn’t mention in the agreement that in exchange for the $100. You’re just trying to make it seem as if your supervisor did nothing wrong. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. even though you are paying Monica because we can prove he did do something wrong. then Monica had to acknowledge that the supervisor did nothing wrong. He offered to send settlement agreement papers to her. and expensive matter. Why’s that? Well. I’m He: She: He: Reaching Agreement 189 . Monica had.000 without actually having to prove anything. He’s happy to prove that in court. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. but said that fighting the charges would be a long.000.000. The supervisor insisted that if the employer felt he had to settle.there was little basis for the complaint. settling—What difference does it make to her? She’s getting her $100. my client is supposed to formally withdraw the complaint rather than just settle it.
Monica accepted the $200. It was made clear that the employer had paid the additional $100.000 when all that was asked for was $100. There was a confidentiality agreement. but word did get out that a public agency paid $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000. I’ll take your offer back to her and let you know. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. 190 50 Practical Negotiation Tactics .000 and the conditions of the offer.000.000 just to get the employee to “withdraw” the complaint.She: authorized to pay $200. to his disadvantage.
it would have been easier to resume negotiations at a later date.” By the same token. The degree of detail and formality of a written document will. Think of how often you have said to someone.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. Unfortunately. rather than attack each other. Reaching an agreement is the first step. and contract. “That may be what I said. commitment. but it was not what I meant. a written document is hardly necessary. A Communication Hearing is not necessarily the same as listening. then the parties have to abide by the agreement. As these examples of personal and business negotiations show. and when they agree to solve problems together. When two friends agree on what movie to see. However. even an informal agreement benefits from some type of written documentation. depend on the kind of negotiations in which you are involved. Certainly someone has said to you. reaching an agreement is sometimes a long and difficult process.” Clear communication is essential if you want to reach an agreement and have it abided by. most certainly needs to be in written form. In Tactic #17 (Package Items). it is much more effective in the long run when the parties enter into “win-win” agreements. of course. A union contract. but some of the decisions were put off for a couple of months. Putting an agreement into writing serves three purposes: communication. If the agreement reached at the time had been put into writing with all three sisters signing it. “Oh. however. talking is not always the same thing as communicating. the three sisters reached an amiable agreement. when they engage in honest “give and take” negotiations. Putting the Agreement in Writing 191 . operating under an agreement after it has been reached can be even more difficult. I thought you said something else. One way to help the parties abide by an agreement is to put it into written form.
Larry wouldn’t have had to argue over a bill for the plumbing work his cousin Will did if he had asked for Will’s estimate before accepting his offer to help. In Tactic #4 (Use Objective Criteria). you have created something tangible that can be referred to in the future when memories become fuzzy. When you create a written record of the details of an agreement. pictures. pictures. And because the sender and the receiver are two unique individuals. sounds. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. nine hundred and forty-four dollars—$22. 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. His mom could more easily enforce the agreement if she had it in writing. The receiver has to decode the message being sent by trying to understand and interpret the words. a couple of months away. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. the message being conveyed and received might be understood differently. 192 50 Practical Negotiation Tactics . or movements being used by the sender. or express a thought or emotion through words. he can be reminded of the details because it’s all there in black and white. seek information. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. If Jason fails to live up to his side of the deal. sounds.Communication is a process that involves a sender and a receiver.” In Tactic #14 (Don’t Always Hide Your Weaknesses).944. When communication is limited to the spoken word only. the price is spelled out in the loan document as “twenty-two thousand. or movements. 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. Who isn’t excited about buying a brand new SUV or truck? Until. that is.
the real estate contract includes information about the buyer and seller. and getting all the parties to sign it usually creates an enforceable contract. When you are ready to commit yourself in writing. as many people learn when they purchase a home. what. and how much. one party will change behavior in exchange for something of value from the party who wants the behavior changed. and so on in standard contract form. and dated agreement. Putting the Agreement in Writing 193 . when. pulling an agreement in writing. You can do this more formally by taking them to court (perhaps as a last resort). have your spouse also agree to the details of the agreement. In either case. Both parties must receive a benefit or something they personally consider of value. dating it. signed. protect yourself by having a written. If you have agreed to pay someone to house-sit while your family is on vacation. where. one party will work if the other party pays for the work. which kind of. or it isn’t an agreement—it’s merely the conveying of a gift. say. WHO? Provide of the full names the parties necessary to the agreement. your plants die because the house-sitter wasn’t told to water them. 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. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. how many. Here’s what we mean. 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. ask yourself the basic questions of who. One party wishes to buy what the other wishes to sell. Failure to do so can lead to big problems. Generally. in writing. However. which. leading to misunderstandings and contract disputes.Contract Finally. details such as what fixtures stay or what appliances go can be easily overlooked. and put that information into the document. why. before the trip. WHAT? The written document should clearly describe the item(s) covered by the agreement. the address and description of the real property. Carefully and completely describe the subject matter of the agreement.
agreed to the same thing. how much or how many. in fact. dating it.The remaining questions fill in the details of the agreement. which one or which kind of. depending upon the deal: when or where. and having all parties sign it ensures that the parties have. the better. 194 50 Practical Negotiation Tactics . It gives the parties an opportunity to really buy into the deal. And it can create a tangible reminder of the deal (or an enforceable agreement. if that becomes necessary). Putting an agreement in writing. The more-specific and clear these details are.
Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ 5. ________________ 3. ________________ 6.Name of Negotiation Tactic 1. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 7. ________________ 8. ________________ 9. ________________ 10. ________________ 2. ________________ 4.
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Inc. Clark. Fiske.: New Harbinger Publications. Sharpe. Fuller. and M. K.REFERENCES Carrell. M. Patton. 2nd ed. J. C. Roger. New York: Simon and Schuster. Fisher. R. and Law. and J. Getting Together: Building Relationships As We Negotiate. and S. Ury. Herb. 2001. R. M. Inc. The Essentials of Negotiation. Pocket Negotiator. Fisher. Inc. Prospect Heights. Labor Relations and Collective Bargaining: Cases. The Negotiator’s Handbook. George. Calif. Mediation. D. R. New York: Penguin Books. LittleJohn. Victor. Gotbaum. The Negotiation Handbook. 1988. 2004. Cleary. New Jersey: Prentice-Hall. References 199 . M. 2nd ed. McKay. Inc. Negotiation Skills. Patrick J. 1997. Lewicki. New York: Penguin Books. Upper Saddle River. E. You Can Negotiate Anything. W. Successful Negotiation: Effective “Win-Win” Strategies and Tactics.: Crisp Publications. Saunders. 1987. Upper Saddle River.: Waveland Press. New York: M. Brown. 1989. Heavrin. 1988. Getting to Yes: Negotiating Agreement Without Giving In. Chicago: Richard D. 1996. Kennedy. University of Missouri: Columbia Press. 1980. and C. Domenici. 1991. Cohen. Negotiating in the Real World. David. 7th ed. New Jersey: Prentice-Hall. 1991.. 2001. and B. The Relaxation and Stress Reduction Workbook. Minton. Roger. Irwin. and J. Gavin. Los Altos. Inc. and S. Inc. 1999. New York: Bantam Books. Calif. New York: Basil Blackwell. Oakland.. Ill.E. W. Practice. Inc. Maddux. Eshelman.
Raiffa. New York: M. New York: Simon and Schuster. B. 1981. The Eight Essential Steps to Conflict Resolution. Massachusetts: D. New York: Penguin Putnam. Stulberg. Weeks.org 200 50 Practical Negotiation Tactics .Nierenberg. 1987. Inc. Massachusetts: Harvard University Press. Dudley. George. New York: Viking Press. Heath and Company. New York: Bantam Books. Cambridge. Taking Charge/Managing Conflict.E. Lexington. Tsogas. Inc. 1999. 1998. Shell. The Art and Science of Negotiation. Raiffa. The Art of Negotiating. Howard. 2001. Labor Relations in a Global Economy. New Jersey: PrenticeHall. Gerald I. 1991. G. Lectures on Negotiation Analysis. www. Howard. Sharpe. R. Upper Saddle River. Ury. Cambridge. The Mind and Heart of a Negotiator. L. 1994. Inc.negotiationsources. Bargaining for Advantage. 1996. J. C. William. Getting Past No: Negotiating with Difficult People. Inc. 1982. Massachusetts: PON Books. Thompson.
D. Labor Law Journal. The University of Nebraska-Omaha. and negotiations. In addition to negotiating numerous litigation settlements and contracts. Marshall University. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. in Economics from the University of Louisville. Carrell are in the fields of collective bargaining and labor relations. The Personnel Administrator. 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 MBA and B. Dr. Carrell has held academic positions at California State University. and the University of Louisville. Human Resource Management. M Christina Heavrin J. Personnel Journal. organizational behavior. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Morehead State University. Bakersfield.A. The Academy of Management Review. Carrell is Dean of the College of Business at Northern Kentucky University. which is located in the greater Cincinnati area. The Journal of Accountancy Training. He received his doctorate from the University of Kentucky. Books published by Dr. HR Magazine. Personnel. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. During his academic career he has received awards for both outstanding research and teaching. Business Forum. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. In addition. and served as President of the Board and Mayor Pro-tem for three terms. Organizational Behavior and Human Performance. he was elected to the City of Louisville Board of Aldermen for five terms. and Public Personnel Management.ABOUT THE AUTHORS ichael R.
an agreement between the State of Kentucky. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. 202 50 Practical Negotiation Tactics . 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. Jefferson County. the City and a for-profit hospital for guaranteed indigent health care services for city residents. 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. Ms.park and a successful industrial park in the City’s enterprise zone.
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