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.

Introduction

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

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50 Practical Negotiation Tactics

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

Introduction

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

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

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

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

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

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

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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

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

because (as Will pointed out) it wasn’t an apples-to-apples comparison. From a look at the portfolio. while she wasn’t an expert. she had been investing the college’s endowment funds for many years. The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. they would have had to revise the figures.disagree on the need for that work or that they would have done it for less. Larry: That sounds fair. I’ll revise my bill to meet the lowest estimate you get. they said. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. Conclusion When the other plumbers looked at the work. Example 2 After Stuart was appointed to the college’s Board of Trustees. and decided to bring the matter up at a Board meeting. he used his financial expertise to analyze the investments of the college’s endowment fund. Budget Officer: I don’t know what your problem is. He was disappointed in the performance of the fund. I certainly didn’t mean to offend you. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . they had to agree that their early estimates were low. Comparing the estimates to Will’s actual costs would have been counterproductive. The estimates would have been higher than what cousin Will charged. Had they actually prepared bids on the work. and no one had ever questioned her performance. 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. The college’s budget officer was understandably offended.

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

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

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

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

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

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

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

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

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). Weeks later. I offer half the asking price. The buyer said he wasn’t interested.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. If there is a significant weakness in your position. For example. The buyer loved the location. The desperate owner agreed.” The agent took the offer to the seller. By assuming opposing roles. but the inside was a complete turnoff. two people on the team will be more successful because they evoke different emotions from the other side. 34 50 Practical Negotiation Tactics . 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. half-serious. with “All right. The agent explained that the seller was desperate. the seller’s agent called the buyer about the property. 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). “Please make any offer—they are motivated!” The buyer responded. and the buyer was able to completely renovate the house and still have a great deal. His teenage sons had “trashed” the house.

but certainly not exceptional in any way.000. Carol: We really want to sell. but we simply can’t take less than $160.000 is very high. Anyone buying the house would want to change wall colors or add new carpets. First. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. but the redecorating is of little value. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Planning a Strategy 35 . but quite frankly. but the house has increased in value. one buyer shows some interest. You are not likely to get more than you request. and then look at the demand from your opponent’s perspective. with no success. After all. your request must not be so low that the other party concludes that you are not negotiating in good faith. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Buyer: The air conditioning might have increased the value of the house. However. And I don’t see a lot of difference in the neighborhood. If you consider the demand ridiculous. but not so high as to end the negotiations before they begin. Buyer: We really like the house.000. Finally. Be realistic. as well. Each time. The market hasn’t gone up that much in six years. we think $160. so think this through well ahead of time. it is likely that your opponent will. six years ago you bought it for $60. Your demand should be high enough to give you room to compromise. It’s a good neighborhood. Carol: Maybe not. Carol wants $160. and just refuses to reduce it.000. We also think that the neighborhood has improved over the last few years. so do not underestimate what you might be able to achieve. Surely there’s some flexibility in your asking price. She has had it on and off the market for the last five years.

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

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

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

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

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

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

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

(beginning to sound irritated. we certainly would have discussed your options. 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. Well. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years.I expected the bill to be higher than usual. but this was quite a shock. I realize that that might be the rate I started paying when I first took your service over eight years ago. and I also realize that if I had examined my bill closely. Had you brought this to our attention before.10 per minute rate on your long-distance service. 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. But I am able to offer you a $. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . Mike. But as a very good customer of yours. Customer representative: Let me pull up your account. I would have known I was paying too much. of course it is not always possible to give existing customers some of the “offers” we have out.

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

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

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

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

I suggest a slight modification to the process. You will both agree. Lectures on Negotiation Analysis. I’ll pick it up tonight. 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). After I open the bids. Thanks for making this last step as easy as possible.” Howard: Since in this case you are talking about a multi-million-dollar business.Susan: Mike: Well. (sixty days later) 48 50 Practical Negotiation Tactics . Two business partners had been working together for ten years to build a successful business. 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. and then decide how much more “emotional value” it held. Here is my check for $800. Both came to Raiffa to help negotiate a settlement. I choose to buy it. which will bind us to the outcome. Both sisters felt that the process enabled them to resolve the issue fairly. in writing. to submit a sealed offer to buy/sell the business sixty days from today. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. They thus were able to determine the highest price each was willing to pay for it or receive for it. They accepted his suggestion to use the “reciprocal buy-sell strategy.

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

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

you gain an edge when negotiating a new plan for your company.” If you spend many hours learning about Health Maintenance Organizations (HMOs). and Point of Service (POS) plans. 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. Preferred Provider Organizations (PPOs). and should therefore handle the problem. 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.investment decision or deal with an error in a bill. he argues that she is the expert. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 .

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

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

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

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

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

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

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

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

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

500) Fig. such as proposing to continue at the current rate or price. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.000 22 23 24 25 26 27 Initial Offer $28.750–$25. 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. 2: Distributive Bargaining Process. Adapted from Labor Relations and Collective Bargaining.000) Settlement Range ($22. for example. None is as important as the first one.500) M $21. (2004). Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). quick agreement. Carrell and Christina Heavrin. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse.000 Buyer Initial Offer ($21. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party.750) Target Point ($24.000) Target Point ($23. “Distributive” bargaining (“win-lose” or “zero sum”) is used.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. 190–192. This is a practical starting point that will not anger the other side (and might even be expected). The negotiator firmly states that it is their best offer in an attempt to gain a nice. Another common strategy is to start with the status quo. by Michael R. as illustrated in the following figure: Seller Resistance Point ($22.500) Resistance Point ($25. Exchanging Initial Offers 61 . The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.

usually. The settlement range is the distance between the resistance points. 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). Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. A target point is the desired settlement value a party has set as a goal when negotiations begin. 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).000 and $28. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. the other side does not agree to this value). thus producing a true “win-win” negotiation. When the two parties agree to a price within the range.000. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. 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. if the buyer’s initial offer was $25.000) is reasonable. See Tactic #18: Agree on Something As Soon As You Can. 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. it is termed the settlement point – not the “right price” or “fair price. thus starting out on a positive note. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). After initial offers are exchanged.In this example. and is the range in which most negotiations actually occur. each initial offer ($21. these points have set the outer limits. the process quickly narrows to the range between the initial offers.” but the settlement price. 62 50 Practical Negotiation Tactics . In the example. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing.

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

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

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

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

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

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

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

A second and third round produced the following allocation: Jenny: December 23. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. This would allow Jenny and Miguel to each work only two days. January 2 None of the three are totally happy with the results. in exchange for giving up earlier choices due to seniority. She proposes to work five days. if they let her choose the two days she will be off and the five days she will work. January 1. 26. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. She would actually prefer to work the extra days and get paid time-and-a half. December 26. 27. December 27. January 1 Carolyn: December 24. 24. 26 Miguel: November 25. 30. 30.November 25 (the day after Thanksgiving) December 23. December 31 Miguel: November 25. and each chooses their days to work: Carolyn: December 27. 2 Jenny: December 23. 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. each made a first choice of days they will work. 31 January 1. They all agreed to their schedules. but that is a secondary consideration. They agree. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. They have decided to start over. 70 50 Practical Negotiation Tactics . 2 In the first round of negotiation. December 30. 31.

For example. realizing that the total cost of a deal might make or break the agreement. it is often helpful to package the items in distinct groups and then deal with each package separately. Anne: As I see it. we need to sell the house. When the girls decided it was time to talk about the estate.000.000 with no mortgage on it. 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. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. A reluctance to include one particular financial item with other financial issues. 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. their mom left specific pieces of jewelry and art in the will to each of the girls. and a collection of antique furniture. Example 1 When their mother died at age 82. but I’d like to talk about the house and the furniture. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. The house and much of the furniture has been in the Exchanging Initial Offers 71 . The estate’s assets included a checking and savings account totaling $450. for example. Autumn and Angela. they met at the house. three ways. In addition. Anne and her sisters. a house valued at $250.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. along with the cash. one might package all of the financial issues in one group and negotiate on that package as one issue. 300 shares of stock in a pharmaceutical company. the antiques. and the stock and distribute the proceeds. can indicate that something you think is minor is really a major concern to your opponent. were faced with the task of selling the house and disposing of their mom’s personal belongings.

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

but I’m making no commitment to trade. Anne: Same with me. including benefits for partners in non-traditional relationships. 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. The third: Ben- Exchanging Initial Offers 73 . the jewelry. The following tasks needed to be a accomplished: establishing basic pay schedules. and establishing a work schedule to accommodate evening and weekend clients. health benefits. sick. tuition benefits. Employees: We’ve got a lot of items to cover. and the assignment of the limited number of parking spaces. the antiques. deciding whether there would be annual wage increases as well as merit increases. and the art works—will be more difficult.). Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. Several issues also needed to be addressed: the ability of employees to move up through the organization.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). vacation. etc. what kind of paid leaves there will be (personal. The negotiations on the other items—the house. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. 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. funeral. Angela: That’s fine.

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

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

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

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

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

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. and even more hours in the fall picking up leaves. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. Ann: Well. no hard feelings either way. I know you and Jeff said you’d like one because you have about five acres. Why don’t you give me a price? Colleen: Oh. and it came with the bush hog and the leaf pick-up. We plan to put an ad in the paper next week. I don’t have any idea. we paid $5. You must mean what you say and be prepared to walk away from an unacceptable offer. but if you’re interested. The “first and best” tactic enabled them to settle the matter easily. 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. Ann: That sounds great! I don’t want this to affect our friendship. consider using the “First and Best” tactic. Example 1 Colleen: Ann. period. we’ll sell it to you.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. 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. Jeff spends many hours mowing the yard every week. Okay? No quibbling.000 for it six years ago. I don’t want to quibble. we plan on selling our Ford tractor when we move. What do you want for it? Colleen: Well. Exchanging Initial Offers 79 .

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

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

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

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

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

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

of course. but you feel cursed because you gave away too much. The other party will probably come back with an equally ridiculous offer. particularly if you don’t know the other party’s “settlement range.000.000 this year. Let’s low-ball them and offer $290.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. then $320. That’s a fair price. or 3) Make an unrealistic offer (i. 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. and you cannot withdraw it in good faith. think things through before you make or accept the first offer. Their realtor told them that it sold for $290. before someone else does.e.000. Jay: No. We don’t know how anxious they are to sell or if they know the market.000 two years ago. such as last year’s price.” (You have won a settlement. Jay: No. at minimum cost. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure.” The perfect first offer. 2) Start out with an old number. and houses in this area sell fast. Sue: Let’s offer $325.000 and $337. is the most (or least) the other side will accept. 86 50 Practical Negotiation Tactics .000—what they paid for it. They found one they both like that lists for $325. never give them their asking price.000 three years ago).000 for a house that sold for $185. which can be very useful). Avoid giving away too much at the outset. thus requiring greater concessions on both sides.000.) To prevent this from happening. because you have settled quickly. 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. The sellers must be willing to come down a few thousand … Sue: Well.. offer $150.

I can’t tell our realtor $290.000. since they had already bought another house. then let them make a counteroffer. and the offer was based on fact: the prior negotiated price. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company. the company president. That’s an insult! Jay: Well. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. was very impressed with their presentation. Give us your lowest price.000. If. (the next day …) Jay: They made us a counteroffer of $307.000 for each of us—$6. Exchanging Initial Offers 87 . They outlined how they would develop a new employee performance-appraisal system. Frank: Me too. but who knows what they are planning on offering. Both parties felt that they made a good deal.Sue: Don’t be crazy. realizing they offered too much.000 total. Sue: Then you do it. Lyle Foxworthy. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. (Bob and Frank meet privately to discuss the situation.) Bob: I’d do it for $3.500—half the difference! Sue: Great. as requested by the human resource director. The buyers were very motivated to sell. as Sue had first suggested. the sellers obviously would have accepted and Jay and Sue. they had offered $325.

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

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

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

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

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

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

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

I’ll trade your sidewalk and trees for my whirlpool bath. Making Counteroffers (The “Give and Take”) 95 . Can we split it evenly? Brooks: Okay. These are all permanent immediate needs.# 1 Sod Item Cost $1.000 $3.000 $1. I’d like to spend some of it on lighting upgrades.500 $5.500 left. and we both get things we want. which I’d like to keep in the bank.500 $2. which takes another $3. Maureen: No.000! Brooks: Good.000 $2.200 $200–$2.000 $5. We have $1.000 $500 $1. $750 for lighting and $750 in the bank.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.500 $500 $1. that makes sense.

both sides exchanged lists of initial demands at their first meeting. The combined lists total thirteen different items: Desired Outcome No. finally agreeing to split the difference on the remaining amount (distributive items). During that time. management and union negotiators found that a “winwin” approach to negotiations worked well. even in difficult years. All items to be negotiated and their desired outcome for each item were put in writing for review. 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. Length of Contract 2. Profit-Sharing 5. Wage Increase 4. Pension Increase 3. This year.Conclusion By taking the time to list all the items each person wanted and their cost estimates. Drug-Testing Program 96 50 Practical Negotiation Tactics . Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. 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).

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

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

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

Rob: (there is no hesitation in this voice) No. but changed his mind when he saw Jasper’s attitude. and that’s it. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. curfew on TV and other noise every night. No agreement was reached. The union contract required that management renegotiate this change in the grievance procedure with the union. the positions of non-union crew leader and floor manager would both be eliminated. Under the restructuring. 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. 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. and the union foreman would report directly to the plant manager. midnight during the week is the only thing I’ll consider. The appeals procedure would have to be altered to reflect the restructuring. Jasper: Midnight.m. b) written complaint to a floor manager if the matter is not resolved in 5 days. is all I’ll consider.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy.) Listen. Jasper: (without taking a breath) At best. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Under ABC ‘s contract with the union.m. 10:30 p. I want a 10:30 p. and that’s not negotiable.

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

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

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

Thanksgiving is Thursday. she suggested a unique alternative.Nancy: It just won’t be right without you guys. So that doesn’t work. When that goal looked out of reach. 104 50 Practical Negotiation Tactics . 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. Nancy: If we keep the time at 5:00 p.m. and it became the family’s new tradition. 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. Mom’s very upset. some people have to work on the Friday after Thanksgiving.. I thought of asking Mom if she could move dinner up to noon or so. 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. Celebrating the next day seems odd. Bill won the coin toss for this year. Sue: I don’t know. but then I realized that the rest of you already go to your in-laws earlier in the day. Sue: Next year. it’s okay with me if you can sell it to everyone else. we’ll come to Mom’s. There’s nothing “special” about Friday. I bet everyone could make it on Friday. By being flexible. but she won’t tell you. either. the holiday will be over. 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. Nancy: We’d make it special by all of us being together. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock.Buyer: I don’t see how you can do that. Saleswoman: Simple. I can’t afford that much. Making Counteroffers (The “Give and Take”) 127 . Let’s see. but what else must I buy? Only the basic service for $8. You can do that. it will be a five-year lease.00 per month. down payment.” She decided to cut the $45. I can afford $6. but let me see the numbers. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.000 down. with your car and $6.00 per month. and added the trade-in.” she had him—she worked around the $300 slices. you can get the Disney channel for only $5.99 per month. (looks at the numbers) That looks good. Great! So. do you want HBO? How much? $5. Instead of a three-year lease.000 price into “slices” the buyer thought reasonable. as promised. can’t you? Buyer: Yes. Sure. do you want Disney? Yes.00 per month for your service. and payout slices to reach the total price she wanted. But my neighbor pays $39. Once the buyer volunteered that $300 was an affordable “slice. I can’t discuss another client’s account.

Okay. 2. Yeah. Thanks. Great. 3. But that’s all! Then we’ll hook you up on Monday.00 a month. Conclusion The owner thought his neighbor’s service at $39. That’s another $5. instead of one total amount. but he agreed to six “salami slices” for a total of $38.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. and my wife wants the old movies. What about the music package? Yes. and probably felt much better about the total negotiated package because it was presented in modest individual slices. The total is $38. That’s $5. 2? How much? $8.00. we had that before. and SI 1.00! Why? Because he judged the per-slice price to be reasonable. Any other kids’ channels? Yes.00 per month. 128 50 Practical Negotiation Tactics . I really want the sports channels. they asked about the Cartoon Network. Disney is for the kids! The sports channels are for me.99 per month.00 per month was far too much.

“I can only guarantee this price until 6:00 p. Humor might not look like pressure. When both sides believe that each has equally strong positions. and the use of humor. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. it is effective. A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. which can be successful if the opposing team has two or more members who hold different views of an issue. It should be used with caution: It can end negotiations immediately. but in tense. but it can be used effectively when one party clearly has an edge. pressure tactics should probably be avoided. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. In some cases. For example. the traditional car salesperson might tell the buyer. angry negotiations. but others will walk out the door. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). and it can destroy your credibility. so are you ready to make a deal? This might convince a few buyers. however. Applying Pressure 129 .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.m. Tactic #33 (The Bluff) is a classic pressure tactic. today. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. turned off by the tactic.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cory:

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

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

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

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

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

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

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

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

The neighbors: Owner: 156 50 Practical Negotiation Tactics . and we’d like to keep it that way. We hope you’re right. Many of our homes back up to that lot. I could put a privacy fence along the east and west—at the backs of your yards. What if I changed the entrance to the middle of the lot? That way. 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. if I agree to move the theater entrance to the south side. We’re just not convinced. not having direct access to the south lot from the street would be unworkable. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. With the Comedy Club and the grocery store on that end. Right now. We’d really like to block off that cut-through and have the theater face the south. but it’s not ever full. Not having in and out traffic to the south of the mall is just not very practical. with your plans to put the entrance of the theater on the east side of the mall. the south parking lot has not been used much. We’d like you to prohibit cars from entering or leaving from the south lot. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. Right now. You could have all of the traffic enter from the north lot. In fact. driveways on the south side of the mall are along the east and west side of the parking lot. And. So. and break in his door. the north lot is used more. I’m afraid. the closest parking to it is along Elm Street. even though I’m not adding any parking. as you said. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. lights in and out at night can be very annoying.the theater will start to hang around and maybe wander around our yards at night.

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

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

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

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

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

age 14. They might worry that the tapes will be made public or given to others. and Alexis. or simply “bad faith” methods have been used by the other party. had $40. Susan understood the impact a tape recording can have when it reveals a lie.00 to spend. age 15.00. the younger sister. She borrowed a tape recorder so she could ask her father if this was a fair deal. until Susan said they would evenly split what they bought. South Carolina. Alexis. and Jones. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Example 1 Susan. The effect on the other party might be even more substantial if lies. the accused. Jones’s supervisor.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. Somehow. Alexis agreed. Susan repeated her demand. this time in front of a hidden recorder. or used to pressure the other side to agree to certain demands. thus becoming a source of embarrassment. threats. are talking about a possible settlement of the issue. Alexis then played the tape for her father. Then he played the tape. 162 50 Practical Negotiation Tactics . Susan denied it. Fred Adams. The two sisters had saved up a little money so that they could buy souvenirs. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Conclusion For the first time in her life. the investigator. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. but Susan had only $20. Alexis knew this was not fair. He asked his elder daughter about the arrangement. who was disappointed to hear that she might propose such a deal. were on vacation with their parents in Myrtle Beach. Michael Wood.

Mr. Your request. He failed to think about what might be the next step. he also lost his negotiating position.” meaning something other than copies? No. And please describe your general manner. Jones. So you refuse to repeat the answers you just gave us? Yes. Making Progress 163 . “Do what I want. Mr. I’ve brought a tape recorder with me. Jones suddenly realized that his strategy would not work.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. Starr. you are aware that the next step in this process is to ask witnesses to come forth. to quote you. Well. (a long pause) I want to see my lawyer. Stuart. No one could have possibly misunderstood your intentions? No reasonable person. and now I’ll ask you to repeat your answers—on tape. exactly what you said to Ms. Conclusion Jones had knowingly lied when he denied the charges. I think I can write my recommendation. So. And you did not threaten her job if she did not. You never touched any part of her body? Not even accidentally? No. stares. I simply asked her to make copies for me as quickly as possible. Appleton both claim they saw the incident and will testify. Ruiz and Ms. But by refusing to repeat his answers.

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

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

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

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

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

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

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

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

Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. I’ll get back to you. Sometimes. but we feel that it’s a fair offer. but the key is to gather facts that you might need—not just the facts that you will need. This offer is for more money than any four-bedroom houses on this neighborhood list. Here’s a list of the five that are about the same size as yours. 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. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. and we are countering with an offer of $250. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . and $237.500.000. $235. has owned the house for 24 years and is downsizing to a condo. but you’ve priced it way too high.000 under the listing price! We realize that. $237. the other party will ignore or refuse to believe the information.000. $229.000.000. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. They sold for: $225.000. (Next day) We’ve reviewed the records you’ve produced. We love your house. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. What? That’s $35. The owner. Sam Jones.000. They believe it is overpriced.000.

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

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

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

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

When two parties believe they have an oral agreement. this tactic can produce an agreement. 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. this process can easily result in a final settlement. and the classic Walk Away (Tactic #48). 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. When multiple issues are at stake and most have been agreed upon during negotiations. or even months after the first offer is presented. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. and the child learns an important lesson about life. 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). 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.Stage 7: Reaching Agreement he final stage! It might come minutes. the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. They bring it out when a dispute arises. hours. In this process. days. 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 friends or neighbors need to settle something but prefer to avoid the negotiation process.

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

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

180 50 Practical Negotiation Tactics . However. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. knowing that it will probably be agreed to in order to continue in the euphoria of the moment.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.

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

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

a local developer. you’ve already told us that. Michael: I have a check right here for 4. Larry: Michael. after no contact from Larry or Judy. and I’m not interested in less.5 million for the building. What do you think? Judy: Larry. and we gave you our price. I still want to develop this block.) Larry: Michael is here again. but their continued walkout convinced Michael that they would hold firm.5 million. Larry: Judy. Michael calls on them again with a check for $5. let’s eat lunch. today. (Judy and Larry walk into the back room and close the door. so why are you here? Michael: I’ve discussed it with my partners. Michael: Well.5 million. Larry. You rejected it. Larry. go back to your office. In reality. and I only need your building to own it. Judy: Larry. One day. How’s business? Larry: Great! I’m surprised to see you again. which the Bizannes accept. Michael: Good morning. Larry: Yes. Two months later. they were prepared to accept $5.5 million. He met with Bizannes twice before.0 million.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price.both of them love their store. and he is offering us $4. Reaching Agreement 183 . visited their store. our accountant said it’s worth $6 million. and I’m prepared to offer you $4. Michael Roberts. come out here! (Judy comes out from the back room. with a certified check.

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

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

money. nor why their method was superior. I have chosen the union’s final offer. on the merit pool distribution method issue. on the clothing allowance. Well. reasonable resolution to their last three unresolved issues. 186 50 Practical Negotiation Tactics . and peacefully finalize a contract that contained several important gains for both sides. and an item that large should have been negotiated at the table. It will only cost $120. 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. At least we both saved time. but we agreed to this process. and stress. Now let’s get a signed contract.000—less than 1 percent of the total package. I’m not happy with your decisions. Second. Conclusion The final-offer arbitration process enabled the parties to gain a fast. I have chosen management’s offer because the union did not justify why the past practice should be changed. Finally.Ralph: Tina: on last year’s data. Ralph.

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

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

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

Monica accepted the $200.She: authorized to pay $200. I’ll take your offer back to her and let you know.000 and the conditions of the offer.000.000. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. to his disadvantage. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume.000 when all that was asked for was $100. It was made clear that the employer had paid the additional $100. 190 50 Practical Negotiation Tactics . but word did get out that a public agency paid $200.000 just to get the employee to “withdraw” the complaint. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. There was a confidentiality agreement.

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

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

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

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

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.

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

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

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

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

Recently voters approved the merger of the City of Louisville and Jefferson County Governments. 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.park and a successful industrial park in the City’s enterprise zone. 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. an agreement between the State of Kentucky. Jefferson County. 202 50 Practical Negotiation Tactics . 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.

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