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SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
practical tactics useful in real-life situations at work or at home. Most readers will no doubt recognize some of these strategies. with family members. 4 50 Practical Negotiation Tactics . 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. 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. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. Instead. few people understand that normal interactions represent bargaining opportunities.negotiator! Pass this book on to someone else who needs it. such as these: • You receive the wrong order at a restaurant. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. • A co-worker asks for volunteers for a new project. at a flea market. But if you scored 8 or less. exactly. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement. with neighbors. accept what is given. Who. they pay the sticker price. or engage in an unproductive argument. • A child wants a new toy now. Unfortunately.
perhaps you can say to a hotel clerk. “I’d like Introduction 5 . Both sides want a settlement. Mutual goals. time. The parties involved are interested in reaching a common goal. that can be negotiated. Your boss reviews your past year’s performance. 3. All of these situations are opportunities to negotiate. since you lost my reservation. you must advise the other party of your intention to negotiate. A friend is about to select the movie he/she wants everyone else to see. What are my alternatives?” During an employee evaluation. and I don’t have time to wait for another. be prepared to bargain. Each one has the five key characteristics necessary for bargaining: 1. A teenager wants to buy his/her first car. For example. Two or more sides are involved. The parties are interdependent: what one party does affects the other. or items of value. Flexibility. 2. The parties involved can make a decision by themselves. Decision-making ability. In some circumstances. A service repair person gives you an estimate on some work. perhaps the employee can say. “Well. There must be a conflict in the sense that what one wants is not what the other wants. Multiple parties. A neighbor wants to remove an old tree on your property line.• • • • • • • A hotel clerk tells you that your reservation was lost. Therefore.” When you recognize that something can be negotiated. Your spouse wants to buy new furniture. Interdependency. There are flexible elements to the situation. such as price. condition. In some situations. some resolution must be negotiated. 4. and each side can involve one person or several people (each representing one “side” of the issue). 5. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. one party is only allowed to follow policy or must wait “until the manager arrives.
and use the forms in the back to identify the issues. 6 50 Practical Negotiation Tactics .” To a neighbor you can say. Once a settlement is reached. negotiations can be concluded with a written or oral agreement. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. and meet with you again. Keep this book handy when preparing for any type of negotiation. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. the parties and their interests. 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. the facts.time to look over this performance review and respond point-by-point. “I see why you want to cut down the tree. 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. and the tactics that might move the negotiations along. but I believe it adds value to our house. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated.
allowance. When making a major purchase. Do you wish you could negotiate a change in your job duties or salary? 7. Yes No Self-Assessment Quiz 1. or child. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . spouse. In the past. When you purchased your last home or car. The last time you received sub-par service or food in a restaurant. As a parent. have you ever required a written agreement covering chores. or division of household duties. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. but you did not? 8.? 10. do you believe that you negotiated the best possible deal? 4.How good are your negotiation skills? Place a check in the box that applies to you. Do you routinely negotiate for better accommodations when you check into a hotel? 3. In the past. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. etc. do you routinely negotiate a last add-on before you close the deal? 9. did you request appropriate compensation? 6.
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The Negotiation Process 9 . state. They’re referred to as “win-win” because each side can achieve their goal.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. the process will probably take several weeks or months as the parties move through all the stages. the process will be fairly straightforward. On the other hand. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). etc. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. thus allowing each side to achieve one of their goals. including those that are less obvious. If it is a relatively informal situation. The “Quick Model” approach outlined below is good for simple negotiations. one for another.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. decide how complicated the issue is. 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 Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). Examples: • office location (city.
10 50 Practical Negotiation Tactics . stages can be combined. What one side gains.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. 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. the other side loses. 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. Depending on the situation and the parties involved. rearranged. but feel free to try them when they seem most appropriate to your specific circumstance. or even skipped altogether.
Information.The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
With only two weeks remaining before a threatened strike. notified all the employees of their intentions. The Jaggers gave the union their “last. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. The union negotiators thought the Jaggers were bluffing. 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. When negotiations with the union became hopeless. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. the Jaggers decided to seek buyers for their land. Conclusion Selling their business was the Jaggers’ BATNA.” which was refused. The union is demanding wage and benefit increases. and equipment. In this case. his BATNA was not to hold out for more money. They learned that their assets would be easy to sell and were worth more than originally estimated. best. as Harvey had for many years. selling became an attractive alternative to a strike or prolonged battle. 16 50 Practical Negotiation Tactics . but rather what the buyer planned to do with the car. providing them with a very good income for life. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. and it now employs 230 craftsmen. The $56 million dollar business took them 30 years to grow. The union negotiators convinced the employees that this too. The threatened strike became a reality. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. as a last resort. was a power play. and final offer.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. inventory. For the past two months. The owners.
000? That’s more than I planned. sure. you still interested in my rifle? Of course. John assured Tom that this would never happen. right? John: Sure.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. I’ll have to think about that. I guess I couldn’t take less than $20. she might have to take a lower offer just to be able to move. Are you finally ready to sell it? Yes. John: Tom: John: Tom: Tom. you know. 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. I’ve been thinking of getting rid of it for a while. what the other party’s desired outcome is. at some point. Make me an offer. so Tom was surprised when John called him out of the blue one day with a proposal. because if the company does not provide relocation benefits. for example. I think so. it’s to your advantage to know what is behind a seller’s decision to put it on the market. What changed your mind about getting rid of it? It is still in perfect condition.000. Just as important is the why. This is a good thing to know. Example 1 Tom had always admired John’s 1861 Confederate rifle. Just running out of space. Gosh. It is extremely rare—one of only 100 made with that bore and handle. How much are you thinking it’s worth? John: Well. Tom: $20. and told John several times to let him know if he ever wanted to get rid of it. A person who has to sell her home because her company is relocating her. If you are the party making the offer on the house. 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. Preparation 17 . it’s still perfect.
parties to a negotiation are not likely to reach agreement. Example 2 Rick. I’ve been thinking about your offer. Well. He is two years away from retiring and does not want his business to fail before he does. Rick needs to remain president of the company for the next two years. if you could come up a little—say $18. I don’t think I can go higher than $18.Tom: Okay. John: Well. Tom now felt comfortable negotiating the price. No longer worried about John’s motives. Tom: Okay. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. has begun negotiations to sell his firm to BigManu Company. but thought this might explain John’s sudden interest in selling the rifle.000. and we’re committed to keeping it open as a major division of our company. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. Without some trust. When Tom found out why John decided to sell his rifle. The sale price for the company has not yet been agreed to. fearing that this will put all of his employees out of work. let’s do it. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors.500 had an 1861 for sale. BigManu: Rick. we really want to buy your company. we 18 50 Practical Negotiation Tactics . the owner of a small manufacturing company.) Tom: John. Was Tom interested? Tom declined.500—we’d have a deal. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. it made the negotiations easier. but then he will be happy to retire. but I could get the money to you right away. Conclusion Tom entered into the negotiations suspicious of John’s motives. let me think about it and I’ll get back to you. and now the two-year requirement has become a stumbling block in the negotiations. However.
you will have a say in how the employees are treated. they decided to put their price on the table and revisit the issue after a price was agreed upon. Within the parameters of efficiency and effectiveness. and we think it’s an odd request anyway. Rick: I built this business from the ground up. (Between negotiating sessions. Preparation 19 . Without this commitment. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. BigManu: You know we want you to stay on and manage this division for us. I just can’t go through with this sale. You’ll be in place to participate in our employment decisions. The price they gave Rick was actually more than he had expected. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. Working as a division of your company. Rick: These people are the best at what they do. We just can’t make good operational decisions with our hands tied. I need to give them some sense of comfort if this deal goes through.) BigManu: Okay. and I hired every one of these people. Let’s talk later. my employees will prove to you that they are uniquely able to run this place. let’s talk about the job guarantee you wanted. BigManu: We just don’t see a way to give you what you want on this. I just don’t want it to change after I’m gone. and he accepted it subject to agreement on the two-year employment guarantee clause.cannot guarantee to you that ALL of your employees will be retained for two years. I just want them to have a real chance to show you how good they are. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. In hopes of pushing the deal forward. We still can’t find a way to do it.
BigManu: Why don’t we guarantee to you that you will stay for two years? That way. you’ll have a guaranteed “in” to protect your people. I’m hoping to retire in two years. I certainly want to do all I can until then to protect my people. Conclusion By masking his real objective (giving himself two more years as president before retiring). Let me get back to you. Surely you’ll be able to “protect” your people if they are as good as you say.BigManu: We intend for you to stay and become a big part of our company. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. to tell you the truth. would it? Rick: Well. but we won’t be completely tied to operations as they are now. 20 50 Practical Negotiation Tactics . Rich almost lost the deal. Rick: Well. that might work. This wouldn’t have anything to do with your own plans for the future. Once Rick realized that he no longer risked anything at the negotiating table by making his need known.
(Think of the showroom tactics used by car dealers. and go play somewhere! Cybil: Well … Okay. Cybil. (thirty minutes later) Bailey: So. the frog is everybody’s favorite. they have the information they need at their fingertips. Make up your minds. such as a hotel conference room. Bailey: Cybil: Preparation 21 . how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. they control the breaks and environmental factors. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. and so on. Mother: Hush.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage.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. 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. 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. too. it’s a deal. girls. I like the frog.
After forty hours of negotiating. When negotiations resumed in two months over another piece of property. non-stop negotiations wore down the members of Team A. Team A agreed to change the meeting place. and other conveniences in the adjoining room. The firm deadline was only four days away. while members of Team B were able to stay fresh. They were blamed for accepting the same deal that had been rejected only days earlier. Both sides desperately needed to settle a property dispute. not one member of Team A was chosen to return to the table. Team B had clearly used its home turf to gain a substantial advantage. meals. as long as they met in the boardroom of Team B. around the clock. although only ten years old. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. The physical and emotional demands of 24-hour. having set up beds. Team B. That’s why she wanted to go to her house. Team A was whipped physically and emotionally. was still going strong. Team A agreed to a settlement almost identical to the one rejected days before. About thirty-six hours later. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. 22 50 Practical Negotiation Tactics . in their own familiar setting. until we have a settlement.Conclusion Bailey. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop.” The chief negotiator for Team B agreed. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom.
If they tell us that they either Preparation 23 . Let’s get the guys back in who gave you estimates. about your bill. Larry: But Will. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. it became clear that all of those pipes had to be pulled and new ones put in. Will: Larry. though. Larry was thrilled. If you think that the other party knows more than you do. Larry had expected to pay him for his time. After all. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. I anticipated much less work. when Will presented Larry with his bill. Things turned sour. and he and Larry have always gotten along. I would have charged anyone else much more. I did get some estimates from plumbers. but was shocked at the amount of the bill. Believe me. This uncomfortable negotiation followed: Larry: Will. Larry: Well. When you first told me about your project. Will is a licensed plumber. Larry: Just make sure you’re comparing apples to apples. I gave you my “family” rate. and show them the actual work that got done. rather than give them the “advantage. and they were much lower than this. based on objective criteria (think property appraisals in real estate).” This can hold up an agreement and cost you in the end.Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. When we got into it. I was kind of surprised at how high it was. It was twice as high as the estimates Larry received from other plumbers before they started the project. you are likely to resent them for it and hold out.
He was disappointed in the performance of the fund.disagree on the need for that work or that they would have done it for less. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. The college’s budget officer was understandably offended. while she wasn’t an expert. and no one had ever questioned her performance. and decided to bring the matter up at a Board meeting. Comparing the estimates to Will’s actual costs would have been counterproductive. Larry: That sounds fair. I’ll revise my bill to meet the lowest estimate you get. Had they actually prepared bids on the work. From a look at the portfolio. The estimates would have been higher than what cousin Will charged. Conclusion When the other plumbers looked at the work. they would have had to revise the figures. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. Budget Officer: I don’t know what your problem is. because (as Will pointed out) it wasn’t an apples-to-apples comparison. he used his financial expertise to analyze the investments of the college’s endowment fund. I certainly didn’t mean to offend you. she had been investing the college’s endowment funds for many years. they said. Example 2 After Stuart was appointed to the college’s Board of Trustees. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. they had to agree that their early estimates were low.
Stuart: No problem. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. I don’t question that they were sound at one time. In this situation. Okay? Budget Officer: Okay. and its resources are limited. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. the college is a private institution. At the end of two months. 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. considering commissions and all. 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. Budget Officer: Yes. but such a strategy also increases risk and costs more money to administer. Now. Preparation 25 . because she did not have the background in investments necessary to trust such advice. Stuart: Yes. but some of these stocks have really lost their value. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. I find that a more aggressive investment strategy produces a better return. 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. As you know. I have a suggestion. then you and I can talk about changing our investment strategy. there might be increased risk and some expenses for commissions. but I want to be involved in the discussions with them about what we’re asking. but I think they more than offset the gains.were stale. I don’t want you directing how they’re going to go.
wash the cars. has asked her mother for a $10/week increase in her allowance. 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. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. Once you both agree on the list of things to be negotiated. It will cost me more than $10—about $35 per week. what else can I do. (2) a later curfew. Shari: Well. and ask the other party to add to the list. (3) more chores. Example 1 Shari. You can’t treat me the same! Mother: Well—so we’re talking about several issues. baby-sit your sisters.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . a sixteen-year-old who lives with her parents and three younger sisters. Shari: I’m four years older than the next-oldest. cut the grass. Mother: That’s a large increase—and we just raised it last year! Shari: Well. not on what you want to spend. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. not just an allowance increase! There is: (1) a $10 increase. and for going out with my friends. Mother: But your allowance is based on what you earn in your weekly chores. This strategy can build trust in the negotiation process itself. I need more money for clothes and CDs. your little sisters will want equal treatment.
while the mother won a Saturday house-cleaning and a night out each week. and item #23 (the wellness program voucher). Management agrees. since all of their items were included as requested. if you agree to our proposals on item #3 (the paid vacation schedule). The trading of items (where initial demands are discussed and agreed upon) begins. was avoided. opens by proposing the list of items. but unlike your sisters. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). An allowance increase. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. you get to stay out an hour later that night. The union’s chief negotiator. Then a “win-win” solution could be determined. while your Dad and I go out. Now we have a package deal to propose … Preparation 27 . in the first session. I’ll pay you $10 to babysit every Wednesday night.Shari: Right! Mother: So … I suggest no allowance increase. And if you clean the whole house on Saturday. item #11 (the clothing allowance). Shari got the $10 she wanted and a later curfew. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Now it is time for each side to list their desired outcome for each item. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. which the other children would have requested as well.
Conclusion In most labor negotiations. Then negotiations can resume on the remaining 43 items. the two sides will at this point sign and date the list of proposed items. 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 .
thanks. (For the next three years. as he left the supermarket. It was nice meeting you. I love this car—restored it myself. but money doesn’t mean anything to me at this point in my life … Well. That’s a generous offer. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. One day.000? No.Tactic 6: Timing Is Everything The exact month. Would you possibly be interested in selling it? No. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. and do your homework. day. and general circumstances under which negotiations take place can substantially impact the outcome. time of day. $12. Bob followed the man home. As the man got out of his car. I live a few blocks from here. just out of curiosity. One day. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. Bob made it a point about once a month to go out of his way and drive by the man’s house.) Preparation 29 . He stopped and knocked on the door. The external pressures put on the parties involved (which might not be related to the issues under negotiation) can sometimes be used to advantage if you know about them. he noticed a FOR SALE sign in the yard. say. on Briarwood Road. Prepare carefully. Not even for. he saw an elderly man get in his dream car and drive away. my name is Bob Hillard. which turned out to be only a few blocks from his own house.
A majority was needed to pass the partnership agreement. Can I see it? Sure. Can you come back on Monday at 10:00 a. (after a careful inspection) It’s a very nice car! I’ll give you $12. if a seventh vote could not be found by the pro-agreement side. that’s a fair price.m. I’ll see you on Monday. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. resulted in another 6-6 30 50 Practical Negotiation Tactics . I can’t take it with me. to seal the agreement at the courthouse? Sure. so I guess I will be selling it. The partner organization. beyond which the project would have to be abandoned. December 31st. the proposal would die at midnight.000. as a matter of fact. The board members had met twice before. Well. I’m moving to California to live with my daughter. Conclusion While Bob did not achieve his goal during his first negotiation effort. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. Example 2 It was Sunday. and the vote was a 6-6 tie each time. A third vote at 3:00 p. and I promise to take good care of it. Follow me. Then it’s a deal? Yes.m. for tax reasons. had issued a deadline of December 31st.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign.
A member of the pro-project group quickly called for a vote after the leader gave a signal. That effort failed.m. a member of the anti-project group left the room. For weeks. When the meeting resumed at 4:00 p.. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. during an hour break in the meeting.. in the end. timing was everything. and it worked. and the meeting was adjourned.. the project had been stalled by 6–6 votes. Then. Preparation 31 .deadlock..m. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage.m.m. He planned for it accordingly. Both sides caucused: The leaders on each side met to negotiate a compromise. as predicted. The measure passed 6–5 at 5:45 p. At 5:30 p. 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.
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For example. decide whether the negotiations should be continuous. cooperative manner. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. If you prefer to take a firm and direct approach. After you have evaluated these factors. and Tactic #48 (Walk Away). Tactic #12: Find Common Interests can be helpful. Third parties sometimes have their own hidden agendas. 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. but in practice it will likely influence the whole process.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. as well as their bargaining history and financial and political positions. The overall strategy chosen does not limit the use of other tactics. A neutral. uncaring approach (Tactic #9: Control Your Emotions. such as Tactic #19 (Make a First and Best Offer). a third party can serve as a mediator (a legislative body. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. such as a third-party negotiator. Identify all outside influences and hidden agendas before you develop your strategy. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). or one-time-only. if you want to begin in a friendly. Be sure you are aware of this at the beginning. Some of the tactics listed in this book are only suitable for single-session negotiations. for example. In some cases. Are there any outside people who might influence the process. Tactic #43 (Nickel and Diming). as it can substantially alter the negotiations between two primary parties. Before you can do this. such as a buyer and a seller or a city and its union. Tactic #33 (Bluff). 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 . you must first evaluate your needs and those of your opponent. might step in and help settle negotiations between a union and administration negotiators. or someone’s colleague or spouse? Third parties such as other buyers or governmental agencies might have to approve the agreement before it becomes final.
The buyer loved the location. two people on the team will be more successful because they evoke different emotions from the other side. 34 50 Practical Negotiation Tactics . Weeks later. I offer half the asking price. 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). His teenage sons had “trashed” the house. and the buyer was able to completely renovate the house and still have a great deal. The agent explained that the seller was desperate. the seller’s agent called the buyer about the property. 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. The desperate owner agreed. If there is a significant weakness in your position. with “All right. but the inside was a complete turnoff. 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. By assuming opposing roles. “Please make any offer—they are motivated!” The buyer responded. half-serious. For example.” The agent took the offer to the seller. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine).
with no success. Buyer: The air conditioning might have increased the value of the house. Planning a Strategy 35 . Carol wants $160. but certainly not exceptional in any way. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. Your demand should be high enough to give you room to compromise. If you consider the demand ridiculous. Carol: We really want to sell.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. so do not underestimate what you might be able to achieve. so think this through well ahead of time. Each time. but we simply can’t take less than $160. Carol: Maybe not. Surely there’s some flexibility in your asking price. six years ago you bought it for $60.000. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. as well. You are not likely to get more than you request. Finally. The market hasn’t gone up that much in six years. It’s a good neighborhood. She has had it on and off the market for the last five years. one buyer shows some interest. First. However. We also think that the neighborhood has improved over the last few years. it is likely that your opponent will.000.000 is very high. but quite frankly.000. we think $160. but the house has increased in value. and just refuses to reduce it. 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. and then look at the demand from your opponent’s perspective. your request must not be so low that the other party concludes that you are not negotiating in good faith. but not so high as to end the negotiations before they begin. After all. Buyer: We really like the house. And I don’t see a lot of difference in the neighborhood. Anyone buying the house would want to change wall colors or add new carpets. Be realistic.
the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. were still alive. but they have no idea what the value of their firm’s name might be in this nearby city. We’re curious. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. The other law firm was prepared to pay $100. Carol drove off a potential buyer by setting an asking price that was just too high.000 offer by coming down in price at least a little. Inquiries to other law firms were not very helpful because in almost all of the instances. enjoying a statewide reputation for quality representation.000. 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. Example 2 The law firm of Bits & Bites was a Sioux City institution.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. 36 50 Practical Negotiation Tactics .000? Carol: We really can’t take less than $160. and then $10. Neither Edward Bits nor Edmund Bites. or she has unreal expectations. In any event.Buyer: What if we offered you $100. 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. the founders of the firm. as to how you think the name is going to benefit you. The partners are interested in selling the name. though. the buyer took it as a signal that either Carol didn’t want to sell.000 immediately. When Carol refused to budge. Here’s how the initial negotiations went: Partners: Well. we are certainly interested in your request to “buy” our firm name to use in your city.
and then 10% of your profits each year for as long as you use the name. that is a very high number. We weren’t really thinking about that amount of money. it would be impossible to create a new name out of the names of our key partners. In every instance. that’s just our initial figure. we do. because we were not even close to that number. And even though you don’t have an office in our city. you have a very solid reputation there. starting with the ten partners you describe. And we. but we get to keep all of the money we’ve received up to that point. Yes. we reserve the right to withdraw our permission. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . I guess this is just not something we’ll be able to pursue. expect to pay for that. (concerned about loosing the opportunity) Wait. We probably won’t be insulted. Using the Bits & Bites name can only enhance our profitability. then.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. What number were you thinking about? Well. We should assume. we want $500. Give us some range. (surprised) Well. because you are in the state capital and your firm has handled a lot of high-profile political cases. So. If at any time we feel that you have “harmed” our name. I’m kind of embarrassed now. that you anticipate to build a very profitable law firm. one of these two attorneys carries the surname of the firm they are leaving. I really don’t feel comfortable doing that now. Thanks so much for meeting with me. Let’s just pretend this didn’t happen. To offer it now would be an insult.000 initially. Well. of course.
In this situation. Both parties were probably at a disadvantage. The price they were willing to pay would have indicated what the naming rights were worth. Either side could have asked for too much. because there was no “objective” criteria available to help them set a reasonable price. Bits and Bites should have let the prospective firm make the first offer. It immediately dropped the idea. since they had initiated the contact. rather than negotiate. 38 50 Practical Negotiation Tactics .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.
Paula: Go ahead and ride it home. you’re really moving! I hate to see you leave. And take the leaf-catcher attachment and the gas can. only three years ago. Peggy: I’m hearing one thing from Paula and another from Andy. I heard that you want to sell your riding mower. threatening. Andy and Paula.200.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one.200! We should get $1. They cost about $300. Andy: No. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. while another acts difficult. I don’t know what the deal is now. (bad guy) and implies that his or her side will hold firm on their demands. Andy: No. and I know how you take care of things. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. I’ll go home and you can call me if you two can reach an agreement. etc. not for $1. Andy: I want them… Paula: Go ahead and take them. I want to keep those. so I’ll take it. since they are sitting out in the driveway with it. what’s your price? Andy: $1. Peggy. Peggy: So. Andy and Paula: Yes. Peggy: Planning a Strategy 39 .400 if the catcher and can are included. Half what it cost us new. angry. I can use them. we won’t need it at the new condo. Peggy: I assumed they went with the mower. Peggy: That’s fair. Example 1 So.
You are located outside our primary service area.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Miguel: Well. She very wisely recognized the routine and forced Andy and Paula to give her a clear. your rate of $3. causing our reps to spend hours on the road. and your training programs. Miguel: I’ve figured $4. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). 40 50 Practical Negotiation Tactics . Sandy. perhaps even unintentionally. your account has taken too much time. Liz: But we still want to renew your contract. Miguel: But not at this ridiculous rate.000 per month is one of the highest in town. Sandy. we’re here to negotiate a new service agreement. For the past three years. Let’s talk. And cut the training hours from 55 to 20. the quality of the technicians’ work. Sandy: What? First of all. She realized that it put her in an impossible negotiating position. And we need to add a clause that holds your company responsible for machine damages. we’ve been fairly happy with your responsiveness.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.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. firm offer if they decided to continue negotiations. We estimated that it has cost us more than $50.
Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Planning a Strategy 41 . even though it was far above the previous contract. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. Liz. Sandy. (Three hours later) I’m back. you two? Good news. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. these terms will put me out of business—I’m a small 20-person operation. I’ll explain on the way back to the office. Sandy.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. I’m going on to lunch. but Miguel’s right. I hope you can meet my terms. Our customer base has grown. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Any luck. Sandy. with a position he knew was unreasonable. If not.m. Miguel! We’ve worked out a deal I think you can live with. I want to keep you as a customer. I’ll stop back about 2:00 p. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. I’m afraid our relationship is over.
and might even harden your opponent into an unfavorable position (for you or for both of you). 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.10 a minute rate at my office location. in fact. he was very unhappy. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. The fault was partly his because he did not stay on top of changes. So. because we have had a sick relative out of town and we used long distance a lot this past month. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. How may I help you? Hello. I noticed this. 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. This will put you at a distinct disadvantage from this point on.Tactic 9: Control Your Emotions Stay cool. 42 50 Practical Negotiation Tactics . It seems that the rate you are charging me on my home phone is $1. such as deals on computer packages and phone services. He decided that the best approach was to act indignant when he spoke to the company representative. He had. I have a problem with my recent bill and my billing rate. 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.00 a minute. but I recently was sold a $. made some very good purchase decisions for his small business. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance.
(beginning to sound irritated. of course it is not always possible to give existing customers some of the “offers” we have out. Mike. I would think you would have given me the best rate you offer new customers. we certainly would have discussed your options. how would anyone who might only have residential service even know to ask? Well. and I also realize that if I had examined my bill closely. It hasn’t been increased at any time. I see that the rate you are being charged is the rate we offer for the type of service you have with us.I expected the bill to be higher than usual. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . 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. Customer representative: Let me pull up your account. But as a very good customer of yours. I would have known I was paying too much. I realize that that might be the rate I started paying when I first took your service over eight years ago. Had you brought this to our attention before. to begin now. But I am able to offer you a $.10 per minute rate on your long-distance service. but this was quite a shock. Well.
Is your supervisor there? I’m certain that he cannot adjust your account retroactively. (with a much angrier tone) Madam. Wait—I’ll get my supervisor. there’s no reason for this conversation to continue. she kept Mike as a residential customer as well as a business customer. which should rightly be $50.10 per minute. a long-time customer of your company. I … (interrupting and in a stern. If you can’t get me someone to talk to. I am. controlled voice) I need to talk to someone who can do it immediately. The best we can do is fix the rate for the future. We certainly don’t want to lose you as a customer. I would hope that you would credit my account for this better rate for past service. 44 50 Practical Negotiation Tactics . He was walking a thin line. either. In doing so. But I’m looking at a $500 longdistance bill. however. and I should be treated with more respect! I’m sorry. after all. and I want to speak to someone in authority so I can terminate my service. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. don’t think this is directed at you personally. but I can’t do that. strategic anger and abusive behavior. between controlled. Mike’s willingness to show a measured “flare of temper” brought results. The latter would not have produced the desired results. but I am very angry with Over-the-Air Company.Mike: I would imagine so.
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 employees’ negotiator finally decided to use “indignation” to break the stalemate. lesssenior employees might be at greater risk of injury because they have to handle explosives. They will be putting the plant AND their fellow workers at risk by not being here. Owner: Now. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. that’s just not fair. 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. and it’s not what we’re even talking about. and you just can’t be too careful. they would become dissatisfied with their pay and want their base pay increased. Working with fireworks is working with explosives. and it’s getting old. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season.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. I’ve got to have the employees with the most experience to protect this place. On those overtime shifts. The owner told the employees that he was worried that during the overtime shifts. and that they should be asking for a fairer base wage for the work they do for you.
46 50 Practical Negotiation Tactics . No one who takes a job with us can be unaware of that. But we protect our people. You are not addressing the real issue for you: money. After the employees’ negotiator threatened to walk out. sit down. the negotiator would have had to find a way back into the negotiations without losing ground. Then you can’t have it both ways. That’s all. (He begins to walk out. Sit down. either the employees are properly trained.) Now. though. but not all? Conclusion The owner was on shaky ground with this one.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. In practice. now. Either they are properly protected. I’m not coming back. not at all. The end result was that the most-senior employees did win the right to refuse overtime. or they’re not. Until you’re ready to talk about that. The safety of the plant demands it! (standing up to leave) This is just ridiculous. What if we were to agree that the senior employees could refuse half of the overtime offered to them. he became more reasonable. All I’m saying is that the most-senior employees have to be on the overtime shifts. or they’re not. don’t be so hasty. But the fireworks business is a business that involves risk. The negotiator was also running a risk with his flare of temper. most of them continued to take all the overtime they could get. Had the owner let him leave.
my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. with winner taking all. I’ll give you 48 hours to decide the price. (two days later) Mary Anne: Well.” is the recommendation of Howard Raiffa. However. a well-known negotiations professor from Harvard University. I’m willing to pay or let it go for $800. and split the proceeds. so you set a price at which you agree to buy or sell the coffee grinder.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. Both sisters covet it. Planning a Strategy 47 . The second party then decides to either buy it at that price and pay the first party. with the highest bidder paying the amount to the other side in compensation for their loss. Then Susan. 2) They can flip a coin. 3) They can agree to sell the object to a third party. called the “Reciprocal Buy-Sell Offer. Mike. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. A fourth option. The first party decides on a price for which he or she will either buy or sell the object to the second party. the executor of the estate. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. Susan. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). since this one is in perfect shape and it was Mother’s. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. All the rest of the estate has been divided among the family. you’re the oldest. Mike: Mary Anne.
Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. to submit a sealed offer to buy/sell the business sixty days from today. Two business partners had been working together for ten years to build a successful business. Both sisters felt that the process enabled them to resolve the issue fairly. You will both agree. and then decide how much more “emotional value” it held. They accepted his suggestion to use the “reciprocal buy-sell strategy. I’ll pick it up tonight.Susan: Mike: Well. Lectures on Negotiation Analysis. which will bind us to the outcome. in writing. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). 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. Here is my check for $800. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. After I open the bids. I suggest a slight modification to the process. They thus were able to determine the highest price each was willing to pay for it or receive for it.” Howard: Since in this case you are talking about a multi-million-dollar business. (sixty days later) 48 50 Practical Negotiation Tactics . Both came to Raiffa to help negotiate a settlement. Thanks for making this last step as easy as possible. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. I choose to buy it.
your bid is $190 million. And I will arrange financing to pay you $180 million to become sole owner. Agreed. and to close within ninety days. I will arrange to sell him my half-interest for $180 million. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. and both men had carefully estimated the market value of half the business. you agree to sell your half-interest to Bobby for $180 million. Bobby. Abe.Howard: Abe: Bobby: Abe. Conclusion Both parties wanted to keep the business. Planning a Strategy 49 . but only if they could become the sole owner. your bid is $170 million. Bobby was willing to pay more than Abe to remain sole owner. 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 we close by July 1st.
This strategy worked. The husband found the dimensions of the couches in the brochures and Web sites. When it came to comfort. 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. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. and created a spreadsheet to compare the five best-rated couches on their list. He thus ended up having greater negotiating power.” but there were substantial differences in price—differences that the wife did not see as a problem.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. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . This approach can also be reversed: The wife in this situation is a banker. It can also work in reverse: establishing the other person as the expert. Based on seating capacity. Conclusion The husband became the “expert” in this situation by doing the homework. the one he wanted (one of the least-expensive) was superior. she glanced at it and immediately deferred to his opinion. When he showed his wife the detailed spreadsheet. Looking at these statistics. and the husband felt like he saved them hundreds of dollars. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. the one that was the most expensive was superior. They both expressed an interest in finding a couch that offered the most “interior” space.” and then argue for the frugal alternative. The couple decided to limit their selection to those rated “excellent. he decided upon a strategy: First establish himself as the “dimension expert.
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. you gain an edge when negotiating a new plan for your company. Preferred Provider Organizations (PPOs). he argues that she is the expert.” If you spend many hours learning about Health Maintenance Organizations (HMOs). and should therefore handle the problem. and Point of Service (POS) plans. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert.
If this was chocolate icing. Usually. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. I wouldn’t care so much. they saw that there was one piece of cake left over from their mom’s bridge party. because I am so conscientious about my paper route. Unless you can convince me otherwise. Example 1 When Russ and Bill got home from school. The boys quickly huddled. Russ: 52 50 Practical Negotiation Tactics . the last piece of cake will get thrown away. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. here’s what they said to her: I think I should be rewarded with the piece of cake. you both want to complete negotiations by a certain date. and so on. you want to reach an agreement that is favorable to an outside party. This time. When they boys returned. point them out at the very beginning of negotiations and refer to them throughout the process. I also took out the garbage last week without being asked twice. That simply rewards your continual squabbling.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. and their mother was tired of it. and neither boy was very happy. and then asked their mom for a chance to negotiate with each other. and I really love the banana/butternut/ sour cream frosting on this cake. Be clear on what you have in common at the start. I missed dessert the other night because I had to get to baseball practice. she made them share whatever it was. like we usually have. They immediately began to fight over it. These positive things are part of your goals and objectives. she decided to try something different. neither of you want to be embarrassed at the outcome. particularly when things seem to be at a standstill. The two boys fought over the last piece of everything.
and I really like white cake. Now that her children are in college. Customers have started to park in nearby apartment lots. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. The last cake we had was chocolate cake. so these hours worked out well.m. and keeps it open longer so she can attract customers on their way to and from work.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice.m. We really want you to go back to your original times. One day. and that’s not my favorite either. It was the type of shop the nearby residents preferred. 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. We realized that if we cut the cake lengthwise.m. 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. Residents: Marilyn. Planning a Strategy 53 . your new shop hours have caused your customers to park in our parking spaces. and her children were in school. she opens her shop at 7:30 a. I helped with the bags without being asked twice. I can have the part with the icing and Bill can have the part with the cake and filling. and better than a fast-food restaurant with late-night hours and a drive-through window. That sounds like a wonderful solution. to 3:00 p. she got a visit from some of the residents. so that your customers can park on the street. because there is no parking along the street during morning and evening rush hours. This cake is white cake.
54 50 Practical Negotiation Tactics .? Residents: We certainly want you to stay in business here. I really need that extra income to stay in business.m.. or so anyway. Most of our residents are gone by 8:00 a. my customers can’t park on the street. So. The parking lot used for apartment residents is probably full from 7:30– 9. and 6:00 p. and usually the car is gone by the time a tow truck shows up anyway. the off-street lots probably won’t be used by my customers. 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.. if residents haven’t left for work yet. and 9:00 a. The shared parking arrangement did work out for Marilyn. Do you? Marilyn: No. I don’t think that would be very good for business.m.m.m. and I close at 4:00 p. Lets try it. If you need to have the shop open more hours. But I really am increasing my sales by being open longer hours. and is probably empty in the afternoon if they haven’t gotten home yet. rather than after work. and the residents needed Marilyn’s shop.00 a. Between 7:30 a. and 9:00 a. then we’ll try and accommodate you. We think they’ll be agreeable to the morning parking.. It is very costly to have cars towed.I’m sorry this is happening. and between 4:00 p. And we don’t think you want your customers’ cars towed. if I go ahead and open the shop at 7:30 a. But in order to keep my new customers.m.m.m. let’s see what the options are. Marilyn: Conclusion Marilyn needed the extra parking.m. we have to be willing to tow the cars that violate it. Identifying their shared interests caused the nearby residents and the customers to reach agreement. I have to convince them to come before work.m. and see if it works.m. 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. Okay.
But at Planning a Strategy 55 . That will take days! I haven’t been in this house for twelve years. and start choosing things. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. one at a time: the youngest. 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. A few hours? I can’t—I’ve got to leave shortly for the drive home. etc. let’s all take a few hours to look around. How can I do that? You all live in this town and you know this house. Then we can sit down at this table at 3:00 p. A deadline can help you make the best possible agreement in the shortest amount of time. Well. Well. let’s all take two hours to look around and make a list of things we might want. we can each take turns selecting things … Like each tool or dish. the first. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. I don’t. Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. Example 1 Four adult children have gathered at the home of their recently deceased mother. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. We just don’t have the time … We’ve got to do this—the house is sold! Okay.m. how should we go about dividing up the furniture and possessions? I can’t talk about it.
m. All of us must come back before Saturday to take what is ours—agreed? Okay. Sue. if I cannot carry a negotiated and signed deal to my board by noon on December 31. we all leave. However. And besides. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. this is December 29.Sue: Mary: Jenny: 5:00 p. Allan: Let me confer with the city attorneys. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. December 31. your attorneys know the tax laws. 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. being the oldest. can sell or give away what is left.. Okay. Agreed. David: I understand your concern. if we are not finished. 56 50 Practical Negotiation Tactics . then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. and I appreciate your interest in the historic structure.
Planning a Strategy 57 . and I don’t like it. we can’t get the reports we wanted in 48 hours. Obviously.Allan: (One hour later.) I understand the December 31 deadline. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Let’s continue. Conclusion Knowing the external deadline gave David a significant negotiating edge.
as well as strengths. as well as those of the other side. We had one at the beginning of the semester that we were using pretty often. while watching TV. Then the teacher went back to the first one. but that was actually a different workbook. but remember that both sides have weaknesses. I bought the second one. He knows that a D will mean that he will have to change the way he studies. first-quarter grades are coming out at the end of the week. and one of the ways to do that is to reveal a weakness at the beginning. we need to talk. so he was able to prevail upon her to let him continue. Mom: All right. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. There will be times during a negotiation when you will want to catch your opponent off-guard. But don’t lose it again. I’ll need to buy it again. but his grades are good. One day mine disappeared. Mom: I gave you money to buy a workbook a few weeks ago. Control the use of the information. Jason: Mom. The objective is to negotiate from a position of strength. Now. 58 50 Practical Negotiation Tactics . and you can neutralize its effect on the negotiations. Mom: What’s that? Jason: A few weeks ago I lost my workbook. and we used it a couple of times. Unfortunately. before your opponent tries to catch you off-guard. His mother disapproves of his study habits.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. Did you buy it? Jason: Yes. He decided to preempt the discussion in order to make the best deal. and Jason knows he is getting a D in Spanish. I’ll give you money for it. but I have a problem in my Spanish class. and I missed some assignments. don’t get mad. Have a clear goal in mind AND all the information you need to make your points. and this usually means having all the right information.
I think I can do that. Since I missed some assignments. but all three deals Planning a Strategy 59 . And those are hard classes—Algebra. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. It’s because I didn’t have the book. and the D is directly related to my losing the book. Conclusion All of Jason’s grades did improve over the next quarter. Mom: Well. I’ll give you more time. Pizza Boy was interested and had even made inquiries about the property. Mom. but I think you do need to change your study habits. Example 2 Jane once owned a piece of property she wanted very much to sell. I’m sorry. 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. All of my other classes are A. then I’ll agree to make changes. all right.(maybe C+). B. so there’s no reason to think I need to change my study habits. Its owners found out that at least three other buyers had been in contact with Jane. If I don’t pull the D up to a C or better. Environmental Science. Thanks. The location was ideal for a convenience store or a fast-food restaurant. my study habits are okay. And I know I have to be better about getting in all of my assignments. English. Although his Spanish grade was only a C+. or borderline B. His explanation made sense. The work I did turn in was fine. I don’t think you’re taking your schoolwork seriously enough. he was able to continue to study the way he wanted to. Jason: Spanish is just one class. and since he offered her the information up front. But that Spanish grade needs to come up to a B!! Jason: Okay.Jason: Another thing. Mom: Well. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. Obviously. she trusted it more.
and it’s zoned for commercial use. since they were well aware of the negatives. however. Pizza Boy: We’ve checked the property out. Pizza Boy: Well. let’s assume that you are right.had fallen through. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. which was way below the price they were actually willing to pay. I think you’ll find that this is only one person. You are a big enough corporation to withstand her objections. Furthermore. 60 50 Practical Negotiation Tactics . What are her grounds for complaining? Jane: She doesn’t have any. Actually. What are you asking for the property? Conclusion Jane told them her asking price. the other interested buyers already have businesses in the neighborhood. we’re not interested in neighborhood fights. Jane: Oh. though. The real problem. she started her campaign to keep them from closing the deal. I know. Pizza Boy: Well. Pizza Boy was prepared for her call. she will want you to think it’s the whole neighborhood. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. either. When she contacts you. however. there were no unpleasant surprises to stop the deal. it’s only the neighbor to the right of the property who has a problem. This is how the negotiations went: Jane: Pizza Boy. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. A tentative deal was signed. I’m very happy you’re interested in my property. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. They decided not to fight a disgruntled neighbor. When the neighbor heard about the new buyer. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. I’m sure. and was able to politely ignore her. But unlike your company. really.
such as proposing to continue at the current rate or price.500) Resistance Point ($25. Exchanging Initial Offers 61 . The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. 190–192.000) Target Point ($23. None is as important as the first one. quick agreement. 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. for example.000) Settlement Range ($22.750) Target Point ($24. Adapted from Labor Relations and Collective Bargaining. 2: Distributive Bargaining Process. The negotiator firmly states that it is their best offer in an attempt to gain a nice. (2004).000 22 23 24 25 26 27 Initial Offer $28. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. “Distributive” bargaining (“win-lose” or “zero sum”) is used.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.500) Fig.000 Buyer Initial Offer ($21. as illustrated in the following figure: Seller Resistance Point ($22. by Michael R. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.500) M $21. This is a practical starting point that will not anger the other side (and might even be expected). Another common strategy is to start with the status quo. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Carrell and Christina Heavrin.
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). 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). 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. A target point is the desired settlement value a party has set as a goal when negotiations begin. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). thus starting out on a positive note.” but the settlement price.In this example. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing.000. if the buyer’s initial offer was $25. usually. it is termed the settlement point – not the “right price” or “fair price. In the example. The settlement range is the distance between the resistance points.000) is reasonable. After initial offers are exchanged. thus producing a true “win-win” negotiation. 62 50 Practical Negotiation Tactics . When the two parties agree to a price within the range. the process quickly narrows to the range between the initial offers. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. and is the range in which most negotiations actually occur. each initial offer ($21. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. these points have set the outer limits. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. the other side does not agree to this value). the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. See Tactic #18: Agree on Something As Soon As You Can.000 and $28.
A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. the negotiations got out of hand when Shelly’s dad forgot what had been decided. Mom: We’re planning on having your party here on Saturday night. If the negotiations are heated. or if a member takes on a role in the negotiations that has not been assigned to them.–10:00 p. Shelly. A caucus gives you an opportunity to work out problems with your own team in private.m. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. If negotiations seem stalled. 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. and I already have 25 names. If the team is feeling pressure to concede on certain items. You can invite up to 20 of your friends. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. There are many ways to use this strategy. We’ll just have chips and soda. and presumably had an agreement. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . without revealing their ideas to the other side. so her parents sat down with their daughter to discuss the details.m. Her mom and dad had already talked about it privately. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. a caucus can be used as a break to calm the situation down.Tactic 15: Caucus If you are part of a negotiating team. Example 1 Shelly’s “Sweet Sixteen” party was coming up. because it might disturb the neighbors. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. Unfortunately. If the negotiations have suddenly gone in an unanticipated direction. make use of the opportunity to call for a caucus. so we’ll have the party from 7:00 p. We don’t want it to be a late evening.
Your dad and I already talked about this and agreed that 20 guests would be the limit. we need to talk. It’s special!!! Well. We’ll get a band—everyone does. alone. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. we could rent the VFW hall.” They would never expect a party to end before midnight. I think we can handle a few more kids—how about 35? And midnight sounds okay. Mom! This is my “Sweet Sixteen” party. (with some irritation) I’m not sure. (During the caucus. I think the band would be fine. And they can’t go home at 10:00 p. Oh. we’ll call you when we’re ready. Dad.—that’s so “baby. okay. That sounds like too many for here at the house. We could play records and you guys could dance.m. Shelly. and then the number of kids won’t matter. Actually. I’m sure we can ask them to tone it down a little. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches.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. And midnight is definitely too late. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. Time out! Dad. (excited) That would be so cool. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . Jerry from down the street is in a really good band that all of the crowd likes. In fact. I guess the VFW will work. That would be great! It would keep everyone entertained.
m. but no Sweet Sixteen birthday party decorations. to 11:00 p.m. And we’re serving chips and sodas. and we will need to approve the list. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . midnight. causing them to lose control and make compromises they hadn’t intended to make. but your dad and I agree on getting a DJ to play.) Okay. That way.m.m. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. and not a huge production. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. That’s so lame. Example 2 The contract negotiations between the company and the union had been going on for days. and you can invite more friends. A DJ? I guess that’s okay. But you are limited to 40. but we’ll schedule the party for 8:00 p. Does that mean no presents. But we can have the band. her mom presented the revised proposal. too? No way!! I want presents!! Conclusion In spite of their prior planning. sorry. Dad. this mom-and-dad negotiating team became unglued during the negotiations. we will be better able to chaperone. can’t we? No band.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. we’re going to rent the VFW hall. Agreed. please!! 11:00 p. Your mom and I agree—11:00 p. All right. is for little kids!! No. Okay. When they called Shelly back in.
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. some attempt to undermine me with my members? Company: I don’t know what you’re so worked up about—we’re willing to spend the same amount of money!! Union negotiator #2: Can we take a break? Union: We don’t need a break—we’re not discussing this stupid proposal. and the following conversation occurred. The union’s lead negotiator misunderstood the proposal. many will want to use it for their children’s education. A lot of employees have spouses who can get health insurance coverage through their work. The tuition benefits will encourage the workers to be prepared for new job opportunities. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. 66 50 Practical Negotiation Tactics . With the cost of college educations so high. The company’s negotiator didn’t recognize the misunderstanding. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. Tuition in place of health insurances? They’ll think I’ve lost my mind. Union negotiator #2: Please—just a moment outside. What is this. it’s a good proposal. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. Union: (angrily) I’m not presenting this proposal to my people.
Now. 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.Union: Union: Company: Okay. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. the parties returned to the room. Exchanging Initial Offers 67 . let’s move on. we’ll be back in 5 minutes. and the parties were able to complete their negotiations. and I apologize for explaining it poorly. 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. Negotiator #1 regained his footing.) I’m sorry. I thought that the contract would cover one or the other for everyone.
A has gained something of true value and given up nothing he values in return.” Throwaway items are those things that hold little or no value to you. However. Example 1 The buyer. you don’t want your opponent to know what these things are. It is a useful tactic in any negotiations. At a point late in the negotiations. when the two sides are only a few dollars apart. I can go to another dealer and get a green exterior—the color I like best.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. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . it’s a great car and a fair deal. Salesman: Well. this conversation takes place: Hobbs: Yes. He doesn’t really care about the color of the new vehicle. I’ll go get him. and noticed that none of the vehicles have a green exterior. Hobbs: Yes.” Party B thinks that A has sacrificed one important objective to gain another. according to the Consumer Reports listing of the cost of the vehicle. so be sure you present them in a way that suggests importance. I know. but in reality. Mr. but … Salesman: But what? Hobbs: Well. Here’s how it works: Party A exchanges the item for something of true value. according to my figures. not revealing that the item exchanged is a “throwaway. we’ve got expenses and we need to make some profit. Salesman: Let me talk to my manager. you are making $200 profit over the true dealer’s cost. quickly checked the dealer’s inventory of sport utility vehicles in stock. 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. Hobbs. But for this price. but he makes a mental note to use color as a “throwaway” item.
.. Hobbs successfully chose color as a throwaway item.no it’s not. Miguel. The days in question are: Exchanging Initial Offers 69 . The three are sitting at a lunch table to discuss the schedule. and seniority will be used to determine who gets to choose the first day.. The manager was convinced enough to sacrifice a final $100 for the throwaway. Employees will be paid time-and-a half for each of these days.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. 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 . I’ll take the red one for $100 less. 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. All three employees must agree to the schedule. 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. At the very end of the negotiations. Example 2 The office supervisor told the three internal sales representatives (Jenny. Then we have a deal. 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.
2 In the first round of negotiation. December 26. 30.November 25 (the day after Thanksgiving) December 23. January 1. if they let her choose the two days she will be off and the five days she will work. January 1 Carolyn: December 24. She would actually prefer to work the extra days and get paid time-and-a half. each made a first choice of days they will work. They have decided to start over. 26. 26 Miguel: November 25. in exchange for giving up earlier choices due to seniority. They all agreed to their schedules. 30. December 31 Miguel: November 25. January 2 None of the three are totally happy with the results. They agree. A second and third round produced the following allocation: Jenny: December 23. 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 proposes to work five days. but that is a secondary consideration. This would allow Jenny and Miguel to each work only two days. 27. and each chooses their days to work: Carolyn: December 27. 31 January 1. 31. 70 50 Practical Negotiation Tactics . December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. She got what she wanted by giving up something she did not value: the two other days. December 30. 2 Jenny: December 23. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. 24. December 27.
it is often helpful to package the items in distinct groups and then deal with each package separately. and the stock and distribute the proceeds. they met at the house. three ways. 300 shares of stock in a pharmaceutical company. but I’d like to talk about the house and the furniture. one might package all of the financial issues in one group and negotiate on that package as one issue. we need to sell the house. Anne and her sisters. In addition. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. can indicate that something you think is minor is really a major concern to your opponent. The house and much of the furniture has been in the Exchanging Initial Offers 71 . were faced with the task of selling the house and disposing of their mom’s personal belongings.000. A reluctance to include one particular financial item with other financial issues.000 with no mortgage on it. the antiques. along with the cash. their mom left specific pieces of jewelry and art in the will to each of the girls. 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. Anne: As I see it. for example. realizing that the total cost of a deal might make or break the agreement. For example. 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. a house valued at $250.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. Example 1 When their mother died at age 82. The estate’s assets included a checking and savings account totaling $450. When the girls decided it was time to talk about the estate. and a collection of antique furniture. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. Autumn and Angela.
and letting everything else wait for another discussion. and use it to fix the house up? Then when we make a decision. I’d like to talk about the art works Mom left each of us. So we agree: We’ll leave $30. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics .000 in the bank and distribute the remainder three ways. so I will be able to keep tabs on it. I’d really be interested in talking a trade for some of them. don’t you think? Angela: Maybe. and now that we have them. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us. Angela: I live close by. we’re really free to do with them what we want. we can sell ours. Autumn: I think its awfully soon to be making these kinds of decisions. Mother was born here and grew up here. What would you think about agreeing today to distribute the cash and stock three ways. Anne: Okay. We’ll split the stock three ways. Angela: Now’s not a good time to sell either the stock or the house and antiques. And we’ll fix the house up. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. but the operative word is “give. and if we wait a couple of years. Frankly. If we want. she’s free to do so. Why don’t we leave some of the cash in the bank.” She gave those things to us. If Angela wants to hold on to her stock. In fact. With no one living here. it’s a magnet for vandals. we will have a more valuable asset. There was a reason why she gave us what she did. we’d get a lot more for them. It’s a buyer’s market now. I’d like it all to stay in the family. Autumn: Sounds good to me. we’ll discuss again what happens to the house and the antiques.family for years. Anne: But that means we have to continue to take care of the house and its contents. Soon.
the jewelry. Employees: We’ve got a lot of items to cover. health benefits.). and the art works—will be more difficult. etc. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. and the assignment of the limited number of parking spaces. but I’m making no commitment to trade.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. 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. deciding whether there would be annual wage increases as well as merit increases. the antiques. May I suggest that we divide the items into three areas. including benefits for partners in non-traditional relationships. The following tasks needed to be a accomplished: establishing basic pay schedules. what kind of paid leaves there will be (personal. sick. Several issues also needed to be addressed: the ability of employees to move up through the organization. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). and establishing a work schedule to accommodate evening and weekend clients. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. The negotiations on the other items—the house. tuition benefits. The third: Ben- Exchanging Initial Offers 73 . deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. funeral. Anne: Same with me. The second: working conditions (work schedules and promotional opportunities). Angela: That’s fine. vacation.
so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. we are an agency supported generally by public funding. 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. 74 50 Practical Negotiation Tactics . Also. Let’s get started. that makes sense. Executive Director: Sounds like a good agenda. 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.efits (health insurance. as well. but the parties were able to come to agreement because the wage issue had been resolved. Employees: Okay. to be honest with you. I would include that under the Working Conditions category. Executive Director: I think it’s a good idea to group items together. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. I think it also makes sense to include tuition benefits in the Working Conditions category. tuition benefits. because they’re really an incentive for better performance. paid leave times. but I’d change your list. Executive Director: Well. the paid leave categories are pretty clearly defined. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. So I’d like to see us get through the wage issues quickly and then move on. Wages should not include merit pay raises. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. and the parking spaces). Later negotiations were difficult.
Their “property division” was mostly about dividing their debts. Exchanging Initial Offers 75 . They were in the middle of buying a house. sets the stage for mutual respect and communication. after a brief marriage. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. Kathy’s first job paid more than Tim’s because she had a graduate degree. They met and married in college. The couple hoped to do the divorce without involving lawyers in order to save money. An initial agreement. You signed those papers. because Tim felt that Kathy had taken advantage of him during the marriage. The discussion might become very heated. Tim worried that he would be stuck with all of the debt. Tim: You might be leaving town. rather than disposing of assets. You can also make an effort to agree on something your opponent offers early in the negotiations. no matter how insignificant. Kathy was asked by her employer to relocate to another city. Kathy borrowed more money to go to graduate school full-time. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. and might not even be able to keep the house. and that you are entering into the negotiations with the intent to reach agreement. without suggesting any changes or modifications. are divorcing. They had also furnished their house on credit. They have no children. Tim began working right after graduation. and she agreed.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. Now. too. and both have good jobs. It indicates to your opponent that you are a reasonable negotiator. with her promotion sending her out of town. Example 1 Tim and Kathy. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. It was her idea to buy the house and go into debt to furnish it.
What do you want to do about them? Conclusion Having agreed to two items very quickly. I don’t intend to “stick” you with anything. I think that makes sense. hold on. If both of us had been working the year I went to graduate school.. and XYZ Co. I got my convertible. Tim: Well. and he could pay it in annual installments over a five-year period. When we bought them two years ago. we would have paid down our school loans more. yes. Example 2 ABC Company. The first thing I’d like to talk about is what we are going to do about the cars. I think it only fair that I take over repayment of all the school loans. 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. as you remember. 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. Okay. a wholesale art dealer. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. and you got your sports car. The monthly payments are about the same.Kathy: Hey. ABC usually uses UPS 76 50 Practical Negotiation Tactics . Frankly. They also agreed that Tim wouldn’t have to pay her that amount for five years. Kathy: Now. I can hardly argue with that. Kathy: I suppose we should look at the school loans next. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. Tim: Okay. as long as the cost was approximately the same. an art gallery. about the house and furnishings. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan.
and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. when the boxes were opened on Monday.to ship artwork. 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. it was obvious that the art in one of the boxes had suffered considerable water damage. and began preparing to return all of the artwork to ABC. They arrived right before the holiday weekend began. The artworks filled four boxes. XYZ’s manager failed to open the boxes or remove the artworks. but only if you let us ship it UPS. or else the box was damaged in XYZ’s warehouse. and arrived on time and apparently in good condition. and we will continue to discuss who is liable for the three water-damaged works. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. ABC: Before we begin. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. ABC refused to pay WeCanShipArt until it received payment from XYZ. There was no indication that the gallery’s electricity had gone out over the weekend. ABC’s position was that the artwork was fine when it left their location. and the boxes showed no external damage. XYZ decided to cancel the promotional sale that was to start on Wednesday. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. XYZ: ABC: Exchanging Initial Offers 77 . but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. The other times this happened. XYZ contacted ABC immediately. Unfortunately. 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. However.
the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. They also agreed that if the investigations are not conclusive. that’s okay with me if it’s okay with XYZ. XYZ: Okay. 78 50 Practical Negotiation Tactics . we’re ruined.m. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. ABC: Well. And we’ll eat the cost of shipping. Now. regardless of where the original three artworks were damaged. WeCanShipArt: Wait a minute.XYZ: Agreed. If we don’t make the deadline. and if word gets out that you think it was. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. at its financial risk. generated a like offer from WeCanShipArt and a reasonable response from XYZ. The artwork was not damaged while in our control. Having reached an amiable solution to the immediate problem. I can’t see how I can refuse that. they will split the cost of the three damaged pieces three ways. You can’t just ignore us.
Why don’t you give me a price? Colleen: Oh. We plan to put an ad in the paper next week. Can you check others in the paper and just give us your best price? We will either take it or advertise the tractor in the paper. and it came with the bush hog and the leaf pick-up. I know you and Jeff said you’d like one because you have about five acres. I don’t want to quibble. but if you’re interested.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. 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. Exchanging Initial Offers 79 . Ann: Well. Ann: Thanks! We really need one. What do you want for it? Colleen: Well. we’ll sell it to you. we plan on selling our Ford tractor when we move.000 for it six years ago. I don’t have any idea. period. Example 1 Colleen: Ann. The “first and best” tactic enabled them to settle the matter easily. Okay? No quibbling. Jeff spends many hours mowing the yard every week. 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. we paid $5. no hard feelings either way. and even more hours in the fall picking up leaves. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. consider using the “First and Best” tactic. Ann: That sounds great! I don’t want this to affect our friendship. You must mean what you say and be prepared to walk away from an unacceptable offer.
I came up with the best salary offer I can make. and you know my current salary. as we agreed. on this slip of paper. Here it is. and I’ll take 48 hours to consider it.Example 2 Archie: Well. So. how about you making your first salary offer your best one. Archie: Thanks. I want the job. but I don’t want to start off in a new job by negotiating with my boss! So. I think we have agreed to all aspects of the job offer. Okay? Vernon: That sounds good. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. He also started the job with a positive working relationship with Vernon. I’ll either accept it or reject it. I don’t like negotiating over salary either. except salary. I expect a fair increase. We want you. 80 50 Practical Negotiation Tactics . I’ll get back to you in three days. who admired the way Archie negotiated his starting salary. (three days later) Vernon: Archie. I’ll discuss it with my wife and get back to you in 48 hours. Conclusion Archie accepted the job offer. but we have internal budget considerations and we must consider equity with other employees. no questions asked.
you will probably have to modify some of your positions if you are to reach agreement. and then to breakfast at “Timothy’s.) During the posturing phase. then the prom. and we’ve made a lot of plans with our friends that I need to talk to you about. 17 years old and a junior in high school. Example 1 Kevin. It might be your only opportunity to explain your position without interruption. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group.m. Fourth. and in a favorable light. This is called posturing—presenting your position strongly and completely. Second. we’re all meeting at Donna’s so we can share a limousine. (Once negotiations get underway. look for indications from your opponent as to what he or she believes is their best position. so the prom is a pretty big deal to both of us. but he figured “all night” was relative. He and his date had decided that as long as they could join their friends for breakfast after the prom. First we’re going to dinner. Present your position and demands as if yours is the only logical position.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. Third. 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. Kevin had “negotiated” with his parents before. He knew his parents would not agree to let him stay out all night.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. Kevin: Mom and Dad. Sally’s Senior Prom is coming up. First. and ignore or deny any weaknesses in it. a 4:00 a. we’re not going to be dating exclusively after this summer. so he knew that he would have to sell them very quickly.” As you know. curfew would be okay. was dating a senior.m. since Sally is going away to college next year. I’m the only junior in the crowd. you know that Sally is really looking forward to this. Exchanging Initial Offers 81 . Posturing is indeed “acting. you only have one Senior Prom in your life.
Also. but to use that as a reason to stay overnight doesn’t make sense. And. That’s asking us to believe a lot. We’re just not convinced that your entire group has been alcohol. we’ll have to get in our car and drive home very early in the morning. So. That’s the deal then? Okay. Yes. but it should not be oversold. and we’re just not happy about that. yes. And if we don’t spend the night. remember that when you started dating Sally and hanging out with an older crowd. you and Sally need to call it a night (or really a morning).Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. they will be open for the Prom crowd only. which could be dangerous. so there will be plenty of chaperoning. Things can happen on a night like that that adversely affect you for the rest of your life.m. this prom is a one-night thing—a dance that is dressier than you’re used to. Second. but because the owner’s daughter goes to Sally’s school. I believe you can pay a little more and have the limousine bring you both home. Fifth. Donna’s parents will be there. I’ve never missed my curfew. you have been fairly good about making your curfew—most of the time. You realize that this could be as late as 4:00 a. 82 50 Practical Negotiation Tactics . I know you trust me and that I’ve earned the trust. we know. Finally. for sure. We think that after the breakfast. and the crowd we hang with doesn’t either. Donna’s parents are not as strict as they could be when a bunch of you are there. we told you that we would not be changing our rules to accommodate that older group. the limousine will take us back to Donna’s house to spend the night. of course. I think I ought to be able to stay out all night. From where we sit. I don’t drink or do drugs.or drug-free. However. We are. happy about your plans to use a limousine so you kids aren’t driving. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. You make some good points. Sally’s parents trust us and have already said yes to her. We’ve heard that they allow kids to drink.
With 800 employees. The company approached other states to see what incentives they might offer Tencro to locate in their state. It currently employs 800 people. we’d be adding at least 500 new jobs. we are one of the largest employers in this county. Tencro approached the state’s Economic Development Officer. We need to find out what you’re willing to do to keep us here. our Exchanging Initial Offers 83 . EDO: Well. and had this conversation: Tencro: We really want to keep our company here and expand it. Tencro has approached the state’s Office for Business Incentives to see what. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. The spin-off business from our operations is huge. Tencro: Let me just remind you of what our company means to this state. but it could easily add another 500 if it had the space on its assembly line. but there are limited options available. If we can expand here. regardless of the incentives. one-floor operation would be very profitable. but was disappointed to learn that they offer very few incentives. The assembly plant is out-of-date.m. if anything. we’re of course interested in keeping you here. Also. other companies have received incentives and Tencro certainly wants all it can get. the state can do to help the company expand and rebuild. because his parents could not disagree with such wellthought-out ideas. and a new. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. Example 2 Tencro Company decided to modernize and expand its business. and it does not really need any help.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. Tencro is not going to leave the state. but we’re getting a lot of interest from other states willing to help us relocate. Nevertheless.
We 84 50 Practical Negotiation Tactics .. we will need the two-lane entrance expanded to four lanes. now that the economy has improved. EDO: The state has very limited resources to pay for economic development incentives. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. 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. 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 can’t possibly give it away to other companies coming in behind them. etc. etc. or else it will not be cost-effective for us to stay here.employees pump money into the economy by buying houses and cars. We do want you to expand your plant. There are more residents in the state demanding more public services: road improvements. and traffic signals. And. That might involve the state building housing for them at a reduced cost and providing them with some retraining. 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. so we’d have to have it free here. EDO: Well. We need help in the cost of attracting and training the new 500 employees. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. We need certain incentives. additional police. Certainly. And we’ve been offered land practically free in the neighboring state. schools. paying taxes. and we’ve had to divert funds from business incentive programs over to basic services. while we value your company as a long-time corporate citizen. if the new location is at the local industrial park. Also. We need a rebate on the local income taxes to help pay off the loan to build our new building.
EDO: Get back to us as soon as you can. we’re just not in a position to offer more than that at this time. Tencro: Well. Exchanging Initial Offers 85 . Tencro was able to pay off the borrowed money in half the time. borrowed money for the new building. Future negotiations continued.agree that the road into the industrial park must be widened and a traffic light installed at our expense. Other than that. let us go back and take another look at our options. the training and the new road improvements were all the incentives offered to Tencro. and hired 500 new employees. Tencro bought land in the industrial park. However. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. but for the fact that each party did its homework and was aware of the true facts. The new set-up was so profitable.
because you have settled quickly.” (You have won a settlement. offer $150.. Their realtor told them that it sold for $290. 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. Jay: No. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure. That’s a fair price. Jay: No. The sellers must be willing to come down a few thousand … Sue: Well. or 3) Make an unrealistic offer (i.000 for a house that sold for $185.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. then $320. and you cannot withdraw it in good faith. 2) Start out with an old number. at minimum cost. of course. which can be very useful).000. and that two similar ones on the same street sold for $330. Let’s low-ball them and offer $290. thus requiring greater concessions on both sides. Sue: Let’s offer $325.000 two years ago.” The perfect first offer. They found one they both like that lists for $325. but you feel cursed because you gave away too much. particularly if you don’t know the other party’s “settlement range. is the most (or least) the other side will accept. 86 50 Practical Negotiation Tactics .000—what they paid for it.000 three years ago).000.000. before someone else does. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.) To prevent this from happening. and houses in this area sell fast. We don’t know how anxious they are to sell or if they know the market.000 this year. such as last year’s price. think things through before you make or accept the first offer. The other party will probably come back with an equally ridiculous offer.000 and $337. never give them their asking price. Avoid giving away too much at the outset.e.
(the next day …) Jay: They made us a counteroffer of $307. They outlined how they would develop a new employee performance-appraisal system. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. the company president. Give us your lowest price. If.000 total. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No.000 for each of us—$6. as requested by the human resource director. then let them make a counteroffer. since they had already bought another house. but who knows what they are planning on offering. realizing they offered too much. Lyle Foxworthy.000. Exchanging Initial Offers 87 . That’s an insult! Jay: Well.Sue: Don’t be crazy. the sellers obviously would have accepted and Jay and Sue. 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. they had offered $325. was very impressed with their presentation. Both parties felt that they made a good deal.) Bob: I’d do it for $3. Sue: Then you do it.000. I can’t tell our realtor $290.500—half the difference! Sue: Great. (Bob and Frank meet privately to discuss the situation. as Sue had first suggested. The buyers were very motivated to sell. Frank: Me too. and the offer was based on fact: the prior negotiated price.
Lyle: Okay. 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. and you two come highly recommended.000.) Lyle: Okay.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. What’s the cost? Bob: We want the job.000. They also ended up getting three times ($18.000) their minimum price of $6. but we know you must have an amount budgeted for this and we are willing to do it for that amount. We’ve waited long enough. Bob: That’s fair. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. We’ll do the job. and it would not apply. 88 50 Practical Negotiation Tactics . but we can’t pay more than $18. That is all that’s left in this year’s training budget. I’m out of time.
do not dismiss it because it is not all you want. which would most likely weaken their position (see Tactic #26: Keeping Secrets). which is often the case. because if you do not at least appear to be flexible. Also. is likely to pull away from the table. be enlarged (see Tactic #27: Expanding the Pie). Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. 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. seeing no common ground. One or more parts might be acceptable or indicate movement from their previous positions. and do not flatly reject it because it is not your offer. In some negotiation situations. but possibly of different values to your opponent. and attorneys use tried and true tactics in giving and receiving offers. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. T Making Counteroffers (The “Give and Take”) 89 . Expect that the “total pie” will be different from what it was at the outset. what appears to be an outer limit of the settlement range when the process starts can.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. the other party. It has often been said that the key to negotiations is to be flexible (see Tactic #25). and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). 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. When the other party makes an offer. carefully evaluate an opponent’s offer. labor negotiators. Experienced negotiators seldom reveal their exact priorities and objectives. Instead. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). Skilled negotiators such as salespeople. in fact.
The week he would be home would be the first week of school for Sydney. completed his first year of college and came home for the summer around the middle of May. Jerry had already started his summer job. Proposing multiple ways to reach your goal can get you to the same place. what say you. Jerry pointed out that he is expected to work until July 31st. His brother Sydney. gives your opponent little maneuvering room and might even prolong or damage the negotiations. He planned on being home for one last week before having to pack up and go back to college. Dad: Wait a minute. Sydney. 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. Jerry will be here. In mid-June. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. 90 50 Practical Negotiation Tactics . finished his freshman year of high school at the beginning of June. 15. 19. except when you’re negotiating. and quicker. Let’s see what we can work out. their parents began discussing a family summer vacation. 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. We have four options. Option 1: No family vacation. Dad. Here’s the discussion that followed: Mom: Well. while it may be your best option. so you can go without me. 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.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. Proposing only one solution to a problem. Option 2: Mom and I go before Jerry leaves on August 1. it looks like we can’t really plan a vacation for all four of us. Example 1 Jerry. I don’t want to give up on a family vacation that quickly.
Mom: Well. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. and one secretary in his litigation unit.Option 3: Mom. actually. we could return home on Thursday and still get a week’s vacation. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. when we come home. Then Jerry joins us until Thursday. Classes don’t start until Friday. but he can discharge employees for poor performance. If we started the vacation on a Thursday. Sydney: Okay. and Carl). Conclusion The goal was to have a family vacation. Joe has no say in who was hired by the corporate legal office to work in his unit. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. so I won’t be able to meet up with you until Sunday. but it should work out all right. It’s not perfect. By proposing numerous options. And I miss orientation and start school the next day? Dad: That’s an option. we meet up with him that week for vacation. you have a half-day orientation on Wednesday. Sydney: Don’t I start school that week? I don’t want to miss school. Mom? Mom: Let’s do it. and Sydney go to South Carolina before his school starts. Jerry: My friends and I have plans through Saturday of that week. if it’s okay with Jerry. Bob. Jerry: Okay with me. Andrea considers Making Counteroffers (The “Give and Take”) 91 . one paralegal. me.
we have a very big problem. or you can work out a “supervision” agreement with me so that I can better monitor your performance. I really see your options as follows: You can leave the corporation. The attorney for the other side has agreed to give me the additional time to file it. let me say that I’m handling the missed deadline on the pleading. Before you start. To put it as bluntly as I can. I thought I had cleared it with you when I told you what I thought they ought to offer and you said that sounded too good to be true. however. We have a formal procedure that you just don’t like to follow. which forced Joe to take action. In the last month. so Joe took a “hands off” approach. Joe: Come on. Joe: That’s all well and good. and resents any attempt by Joe to supervise her work. 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. but it doesn’t solve the problem—nor is it the only problem. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. Andrea: Well. she made a two glaring errors in judgment. Her job performance was acceptable. Joe: Andrea.herself to be a professional. isn’t it? But I don’t think just moving you really solves the problem. 92 50 Practical Negotiation Tactics . Andrea: We’re hired for our expertise. rather than to put it off on someone else or for some time in the future. It was just a comment. you have a job-performance problem. Andrea: Wait Joe. you know that wasn’t an okay to settle. If you don’t like the way I do my job. Andrea: You didn’t list moving to another unit as an option. You had no authority to agree to settle the Stites case without clearing it with me. Joe: That is certainly an option. and I don’t see why we don’t have more independence. It is to the corporation’s benefit to address that problem here and now. Andrea.
I hope we can work it out. If you are convinced that I have to undertake an “approval” program. lets talk to Bill about the move. in fact. or I would advise your next supervisor to put you on a very formal approval program. improve her work performance. Andrea’s move and subsequent “approval” regime did. If that option is okay with you. Andrea: Well. I want to stay with the firm. but it would still require some change in the way you work: either a demotion. But in fairness to our mutual employer. It also changed her attitude about being both a professional and a team player in a corporate office. the needs of the corporation have to come first. then it would save face for me if it comes with a move to another unit. (Adapted from The Mind and The Heart of the Negotiator. and propose an acceptable alternative.Joe: That could be an option.) Making Counteroffers (The “Give and Take”) 93 . rather than my staying here. my goal is the same is yours: to create an environment where you can perform to your full potential. Believe it or not. Joe: That’s fine with me. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. by Leigh Thompson.
let’s see if there are any items we both want. These items often involve money). Let’s see. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. etc. the fencing.000. Example 1 Brooks and Maureen Wilson have just finished building a new home. 3) distributive items (those items for which the two parties have exactly opposite interests. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. 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. thus making it necessary to find a middle ground on each. This approach is an important tactic.) Yes. (She looks over the list. only those with polar-opposite interests that must be divided. For example. In essence. one person’s gain is another’s loss—zero-sum. then those which can be easily traded. Let’s agree to those things. because it can speed up negotiations and produce a more desirable outcome. if a buyer negotiates a $500 reduction of a contractor’s bill. 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). 94 50 Practical Negotiation Tactics . then the contractor has lost $500 in revenue. They have a fixed amount of money—$14. It is used only when each side has several demands.). 2) exchange items (those that can be easily traded off—one item for another item of equal value. Exchange. we both want the sod. They both agreed that this is the maximum they will spend on “extras” before moving in.500.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. Maureen: First. Brooks: Right. With distributive items. that’s $9. and a home theatre. and finally. Wow! We are off to a good start. three strategies are used.
Can we split it evenly? Brooks: Okay.200 $200–$2. I’ll trade your sidewalk and trees for my whirlpool bath. Making Counteroffers (The “Give and Take”) 95 . We have $1.# 1 Sod Item Cost $1. Maureen: No. I’d like to spend some of it on lighting upgrades. which takes another $3.000 $5. These are all permanent immediate needs.000 $500 $1.500 $2.500 $500 $1. that makes sense.000 $3.000 $1. and we both get things we want.000! Brooks: Good.500 $5. which I’d like to keep in the bank. $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.000 $2.500 left.
Drug-Testing Program 96 50 Practical Negotiation Tactics . This year. 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). Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. The combined lists total thirteen different items: Desired Outcome No. Wage Increase 4. both sides exchanged lists of initial demands at their first meeting. management and union negotiators found that a “winwin” approach to negotiations worked well.Conclusion By taking the time to list all the items each person wanted and their cost estimates. Length of Contract 2. During that time. Pension Increase 3. All items to be negotiated and their desired outcome for each item were put in writing for review. finally agreeing to split the difference on the remaining amount (distributive items). even in difficult years. Profit-Sharing 5.
they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10).6. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). one Making Counteroffers (The “Give and Take”) 97 . Finally. and (#9) to continue the often-discussed no strike/no lockout provision. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). At this point. They proceeded to draft the language to settle these issues. Because they held opposite positions on these issues. (#5) a new drug testing program. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground. they began to trade off the exchange issues of similar value and nature. eleven of the thirteen original issues to be negotiated had been agreed to. Health Insurance Employees pay 20% Continue cur. Subcontracting 12. Clothing Allowance Based on senior. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). Job Security 13. Next. First. signed. Shift Differential 11. No Strike/No Lockout 10.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Paid Funeral Leave 9.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting.Distributive rent program co-pay Exchange Exchange 7. and removed from the table. Next. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Overtime Assignment 8.
if both parties start from reasonable positions.side’s gain is the other’s loss. when you exchange items so that each party achieves their desired outcome on one of the two. but a middle ground was eventually found on each and negotiations ended. Conclusion This tactic is simple. exchange. They then identify each as compatible. Second. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. the 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. you can use the process to settle many of the other issues on the table. 98 50 Practical Negotiation Tactics . negotiations begin on a positive “win-win” note. but it can be very effective when a negotiation situation involves several issues. Third. The tactic offers several advantages: First. or distributive so that the negotiations can begin in an organized manner. when you agree on the items where both parties have similar desired outcomes. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed.
Let me finish. so I can study. This isn’t high school. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. Rob stays busy all day and evening with other activities. Rob: Wait a minute. each side is expected to put an offer on the table. They agreed on which part of the room each would have. The final issue had to do with “lights out” and quiet times for studying. So when’s a good time? Jasper: (without hesitation) No way. they decided to establish “room rules” so that they would both be comfortable with the room assignment. the location of the TV. do not offer a counterproposal right away. Waiting a respectful amount of time to counter. and can help you reach your goal. and from a strategic standpoint.Tactic 24: Wait to Counter As the negotiations begin. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. I’m not interested in a curfew. Jasper: Finish or not. even if you aren’t going to accept their offer. and on what would be considered acceptable “sharing” of each other’s junk food supplies. and looks like you are belittling them. stereo. and refrigerator. It is especially important that you do two things: take your time before rejecting any offer from the other side. Rob: Making Counteroffers (The “Give and Take”) 99 . 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. you know. Since they didn’t know each other well. Here is how the last issue was handled: Okay. so he wants a quiet room late at night. last item: I’d like it quiet in the room at night. and studies late into the night. Mutual respect must be part of the negotiation process. will make your opponent feel good about the process.
Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. Under the restructuring.m. Jasper: (without taking a breath) At best. and d) a hearing with company owner if the matter is not resolved in 20 days.) Listen. Jasper: Midnight. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . but changed his mind when he saw Jasper’s attitude.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. and that’s it. 10:30 p. The union contract required that management renegotiate this change in the grievance procedure with the union. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. Rob: (there is no hesitation in this voice) No. is all I’ll consider. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person.m. No agreement was reached. b) written complaint to a floor manager if the matter is not resolved in 5 days. and the union foreman would report directly to the plant manager. I want a 10:30 p. midnight during the week is the only thing I’ll consider. and that’s not negotiable. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. the positions of non-union crew leader and floor manager would both be eliminated. curfew on TV and other noise every night. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Under ABC ‘s contract with the union. The appeals procedure would have to be altered to reflect the restructuring.
ABC Company’s negotiator explained the management changes soon to be implemented. We’ve got a couple of alternative models for you to consider. Union: You obviously didn’t come here to negotiate. We just cut out two steps. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. 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 . and began the negotiation session concerning the grievance procedure. (Note: An attitude change sets in. and everything else stays the same. the employee and the foreman would meet with the plant manager and attempt to resolve it. rather than as a judge on the merits of the grievance. he/she can take the grievance to the plant owner for a hearing. Company: Here’s the new draft of the grievance procedure. In fact. We’d like you to consider the plant manager’s role as a problem-solver. 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. because those management layers are gone.any objection to the change. and I’m certain your members will be okay with it. We’ve simply eliminated the first two steps. rather than go on to appeal it to the company owner. Company: (rather abruptly) Let’s not drag this out. The redraft is simple and straightforward. Certainly. this redraft is a very simple change to the contract. An aggrieved employee can make a request for a meeting with the plant manager. After initial pleasantries were exchanged. If in 20 days he/she has not been satisfied. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. Company: (no hesitating) Trust me. Union: Hold on. Union: As you know. The union was prepared to accept the plant manager’s position as final. no one can complain about that. our grievances often signal to management that there are real problems on the shop floor. but to dictate.
Union: We’re very serious. After a cooling off period. 102 50 Practical Negotiation Tactics . Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. You can’t be serious. We’ll see you on the picket line. and actually accepted a three-step procedure. and we’ll strike if we have to. the two parties did meet again. This time. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. rather than in the 35 days the current system provides. the company entertained the ideas the union had tried to propose before.two-step grievance procedure instead of a four-step procedure.
Even before the baby’s arrival. and identified the range of options they feel comfortable with negotiating.m. you can adjust your demands or goals to include such new ideas. established goals. Bill. Nancy: Sue. two sisters. Mom says you. two brothers. Next year. and do not dismiss something said by your opponent just because it came from the opponent. one sister. 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). 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). we’ll get to our side.m.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Bill’s family (parents. But after the negotiation gets started. Sue’s family (parents. Be open minded. Sue: Yes. and now have a new baby girl. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. it’s just too much to do both. and we’re really not able to enjoy either one. their spouses. They flipped a coin to see who “got” them and the new baby this year. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. Bill’s family won. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. and ten nieces and nephews) always ate around 5:00 p. Making Counteroffers (The “Give and Take”) 103 . If you are flexible. The couple used to have Thanksgiving dinner at both families’ homes. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Example 1 Sue and Bill have been married four years. four brothers. They’ve done the research. and at least five aunts and uncles) ate around 7:00 p. Sue’s sister Nancy called her to talk her into coming anyway.
104 50 Practical Negotiation Tactics . There’s nothing “special” about Friday. and it became the family’s new tradition. the holiday will be over. it’s okay with me if you can sell it to everyone else. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Mom’s very upset.. 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. some people have to work on the Friday after Thanksgiving. Sue: Next year. either.Nancy: It just won’t be right without you guys.m. Celebrating the next day seems odd. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. but then I realized that the rest of you already go to your in-laws earlier in the day. When that goal looked out of reach. 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. So that doesn’t work. I thought of asking Mom if she could move dinner up to noon or so. but she won’t tell you. Thanksgiving is Thursday. Sue: I don’t know. I bet everyone could make it on Friday. I know that I would rather not do two Thanksgiving dinners on Thursday. we’ll come to Mom’s. Bill won the coin toss for this year. Nancy: I’ll let you know. she suggested a unique alternative. I mean. By being flexible. Nancy: We’d make it special by all of us being together. 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.
We only have maybe $2 million a year to put toward this charity. the interest income of around $6. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. City: Can’t you borrow the money from a bank to build the facility. City officals: We can probably give you the land for free. Kids’ Home hoped to get $500. we hope to break ground early next year for the new orphan home. but the principal of the fund can’t be touched. Kids’ Home: As you know. Each year. a non-profit organization for orphaned children. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. 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. Foundation officals: Oh. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. They are meeting with the city to ask that the land be donated by the city for the project. we’re committed in theory.5 million is available for distribution to numerous charities.000 a year for operations. Unfortunately (for Kids’ Home). The foundation has a substantial endowment fund. Kids’ Home: That’s why we brought the foundation’s officials with us.Example 2 Kids’ Home. depending on the cost of the land. Estimates for building a new orphan home ranged from $12–$15 million. the foundation’s regular annual grants come to roughly half of their available funds. but we can’t fund all of the $12 or $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. 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 .
I’ll contact the state tomorrow. We wouldn’t want to make such a commitment to a bank. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. it could end up costing double that amount. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. If we borrowed $15 million at 10% interest. 106 50 Practical Negotiation Tactics . We probably would not be able to participate. We’re not familiar with that program. but we’re willing to look at it. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. and really taxes our ability to raise funds. We’re a nonprofit group. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. We’ve never committed our funds to pay back a bank loan.Kids’ Home: Borrowing the money gets very expensive. And “donations” aren’t a very safe collateral for any bank that wants to loan us money.
each side has to know generally what each other wants to accomplish. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. yet not reveal all of your goals and objectives. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. and often took up all the space along the street in front of the two houses. It is perfectly acceptable to say that you are not ready to reveal certain things. Before the Jones family moved into the neighborhood. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. you might not want to reveal all of your priorities at first. and we would very much like to talk about how we can resolve these issues. and often lasted until 2:00 or 3:00 a. it is not acceptable to lie. The Smiths called the police to complain about a late-night party. These parties could get rather loud.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. However. Smith: We don’t know what you’re talking about. and asked the officers to cite the Jones kids for parking too close to a corner. In order for a negotiation to be successful. Successful negotiations depend on trust. The Jones family suspected that the Smiths called the police. Mr. the Smiths could count on parking their car directly in front of their house. and trust can only be established if all parties interact truthfully. Jones: We’ve obviously gotten off on the wrong foot.m. the neighbors began to have problems. At the same time. Mr. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. Making Counteroffers (The “Give and Take”) 107 . But the Jones clan had four cars altogether. Example 1 Soon after the Jones family moved in next door to the Smiths. They asked to meet with the Smiths to talk about these disagreements.
a lot of problems. yes. we’re good now? Mr. Jones: We’ve already talked to the girls about the parties. Jones: Okay. Is that everything now? Mr. Smith: Well. It is really very disturbing. and not in the back yard. they kept it. but we do know that someone has complained. Mr. and was met with the following: Mr. At our age. if they are outside. that wasn’t us. Smith: Yes. (A week later. fine.) 108 50 Practical Negotiation Tactics . Almost every day. And the music is to be off at midnight. I guess.Mr. we have a problem walking long distances in bad weather. 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. Mr. Also. Muffin. Smith: You know that your boys are causing our dog. Smith: Well. 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. Mr. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. we would like to work out some solution. the next time the boys were out playing and the ball came into the Smiths’ yard. Mr. the late-night parties are a problem. So. Mr. we’d like to be able to park our car in front of our house. Jones: Well. And we’ll make sure none of our cars are parked in front of your house. Smith: No. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Jones came to see what the problem was. we thought you might have called the police about our kids’ party and our cars. since you’ve asked. they’re hitting baseballs into our yard. In spite of the Smiths’ assurances. In good weather. and they won’t be having friends over more than one night a weekend from now on.
Jones: (at the Smiths’ door. Unless Neno can get the Union members back to work on Monday. Jones: Sure. Neno’s president and the Union representative met to discuss the walkout. The union knows that the company is up for sale. or European companies do. Why didn’t you tell us? We can’t read what’s on your mind! Mr.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. We would have fixed the tree if you had asked. and the deal is close to being final. Its local headquarters has a union to handle its international shipping. Union officials are afraid that a Japanese company might purchase it. although none of the facilities outside the U. or the deal is off. the British firm will walk away from the deal. because they didn’t like a grievance decision. the tree was clearly over the fence.S. The union laborers walked off the job on Friday.Mr. 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. Japanese companies often do not “recognize” labor unions the same way U. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. You obviously don’t want to be “good neighbors. But we didn’t call the inspector. Example 2 Neno Enterprises is a shipping company with extensive global operations. have labor unions. Smith: Well. Mr. You could have seen that yourself.S. The British insist that a very strict confidentiality provision be part of the negotiating process. Neno has been negotiating the sale of its business to a British company. but Neno cannot tell the union this. you’ve said that before. Making Counteroffers (The “Give and Take”) 109 . irate) I can’t believe you people called an inspector on us.
We can’t put up with the kind of decision we got on our grievance. If that’s going to have a bad effect on your being able to sell the business. I’ll forget all about the strike. Neno: Look. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. We’ll meet with all of the parties on the grievance first thing Monday. I need your guys to come back to work on Monday. we will resolve it to your satisfaction by the end of the day. Neno: All I’m saying is that there is a difference. and if the guys are back on Monday. do you? Union: No. Therefore. so the union won’t be hurt by the buyout. Union: What aren’t you telling me? A labor shutdown. I promise you. whether it’s for one weekend or a week. 110 50 Practical Negotiation Tactics . Anyone who buys the company will have to honor the contract we have.Neno: You know this is a wildcat strike and that it is in violation of our contract. I think it already has. And one company that is interested has a really good track record on expanding the businesses they buy. this is a legal strike under the contract. You really don’t want to do that. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. Have the guys back on Monday. Neno: Look. If they do come back. But I have to have everyone back on Monday. I can’t really be more explicit than that at this time. Our guys are prepared to stay out a lot longer than Monday. If everyone is back on Monday. I’m certain that if we can sit down and talk next week. Union: We think that the grievance decision affects our wages. any interruption in our shipping could affect how these buyers look at our business. It’s not the time to have one. You don’t want to mess up our negotiations. maybe by next Friday or the week after that we’ll have our guys back to work. But if your guys are out past Sunday. we don’t. it will impact our marketability. no harm-no foul. then there’s probably no harm done. We’ve not had a labor shutdown in 20 years. is still a labor shutdown. I know it’s not news to you that this business is up for sale.
Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. He told him that it would mean that the union would not only keep its jobs here. the union was willing to trust Neno—even though he couldn’t tell them everything. Can you assure me of that? Neno: Yes. I would be more specific. Union: Okay. Union: Okay. But I need to tell my guys that this is important to them as well. Conclusion On Monday. we’ll be back to work on Monday. I can. rather than make up reasons. I’m going to go along with you because you’ve always dealt straight with me. while the grievance was being resolved. Neno called the union negotiator in and briefed him on the sale. as well. But I can’t. was the right decision to make. and it’s that important to you as well. Making Counteroffers (The “Give and Take”) 111 . Because the parties had dealt honestly with each other in the past.Union: It’s that important to you? Neno: Yes. the sale was finalized. If I could. but the British firm will allow them to organize at their foreign locations.
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
or C.000. and clean it. that is enough time. I’ll find a way to do without one part-time person. Take it or leave it. I can accept B. Roberto: But I need to start the direct mail and newspaper ads within two weeks. but I will cut your travel budget out completely. (long pause) Felipe: Let me give you three options: A. Use the $5.000 for advertising. or we lose a whole year. but I will cut your staff by one part-time person (or $15. I’ll do it now. but the company president does not share your optimism on this program. Roberto: Well. Amber resisted the chore she hated. keeping her Saturday free. But when her mother laid out the schedule and gave her alternatives. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . B. I’ll approve $15.Amber: row before your basketball game. I can’t help.000 for advertising. Clean it after your game. Roberto: But it will never generate enough interest if no one knows about it. Felipe: (Roberto’s supervisor) Sorry. she chose the one she most preferred. Felipe: Sorry. Conclusion At first.000 budget! I need at least $20.000). Example 2 Roberto: I can’t properly advertise this new program with a $5. Three. I’m not going back to him again to discuss this program.000 in the budget. but no TV or anything until it’s done! (pause) Okay. Felipe: Well. I have three hours. I’ll approve $15.
Roberto believed. Making Counteroffers (The “Give and Take”) 117 . One alternative.” He offered Roberto three alternatives of equal cost. thus achieving his goal of not having to ask for a larger budget.Conclusion Felipe was willing to think “outside the box. would enable him to adequately promote the program. which was his goal.
received a glowing report from her boss on her job performance. I have to tell you that while I appreciate what you have done for me. Jones. She was determined to hold her ground for at least a 13% pay increase and a promotion. he can make an open-ended statement. the promotion had not yet been approved. but one side comes back with a non-negotiable demand. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. I very much appreciated the fair job performance review you gave me. Susan: Mr. After a few minutes of silence.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. This should have resulted in an automatic promotion and a sizable pay increase. inviting a response. you are a valued employee. Unfortunately. and 118 50 Practical Negotiation Tactics . 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. nearing her third year with the company. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. Example 1 Susan. Jones: I certainly do. Here’s how the negotiations went. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. I think you would agree with me that I have performed well above expectations this past year. 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. It was 16% less than she had been led to believe she would be getting. If his opponent cannot agree to the demand but does not want to end the negotiations. Susan: I hope so. You know my commitment to this company. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. The negotiator for the other side says nothing.
and I’m sure management will agree. If there is some flexibility in your request. I must ask you to try to get both. maybe we can talk about the promotion later in the year. and sell it to management that way. I would very much appreciate it if you could ask the company to reconsider. and I think that I really haven’t been dealt with fairly. (says nothing) Or. I could probably find a way to phase it in over a two. Well. the company’s refusal to grant them now was a harder position to support. (says nothing) If I can’t get that pay increase approved right now. Susan’s silence prompted Mr.or three-year period. Okay? (says nothing) Let me check it out and I’ll get back to you. of course I will be glad to do that. it could help. 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. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. because I feel my future with the company might be at stake here. Jones to continue to offer solutions. Making Counteroffers (The “Give and Take”) 119 . Once he acknowledged that both items might be awarded sometime in the future. if management can see their way to giving you the pay increase now. I suppose I could get the promotion approved with the proper presentation. but a pay increase of that size might be more difficult. Conclusion Mr. Promotions of this type are all but automatic around here.
Mayor) said that she was considering running for office. He decided to push for a simple renewal of the original terms. This is how the negotiations went: Town Council Representative: Well. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . Mr. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. by saying that she might run for Chair. The term of the original agreement was nearing its end. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. 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). The parties agreed to continue the previous terms of the agreement. The end of the agreement coincided with the election cycle for the two towns. and until she does. My bosses might not have been inclined to expand the agreement anyway. The mayor. has colored these negotiations. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. Town Council Representative: I think you’re wrong. Also. her plans really don’t have any bearing on these negotiations. 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. I don’t think it’s a problem. but now they’ve got to ask what Madame Mayor’s motivations are.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. and were trying to settle on new and expanded areas when one of the elected officials (Ms. She has not decided what she’s running for. Mayor’s representative: No. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement.
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. Making Counteroffers (The “Give and Take”) 121 . Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. He either had to end the session or figure out what to say to reengage the other side. I’ll go back and tell Madame Mayor your position. 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. Conclusion By remaining silent. In the end. Mayor’s representative: Well. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. and the agreement was renewed with no new provisions.represents have to worry that her desire to switch governments might taint the negotiations. I hate not to attempt to add some additional areas to the agreement. I don’t know what her reaction will be.
The brook 122 50 Practical Negotiation Tactics . I have a problem. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. in a small clearing. which an upstream neighbor had built. As was sometimes the case in these parts. Neighbor: Well. The reason I built it was so that I could protect my patio. and began to renovate it as a home and a pottery shop. One day. you should always enter the talks with a good idea of what you are willing to agree to. or we will be at an impasse. after the gazebo had been there for about five months. Madeline: Hi. This range for maneuvering is not the same thing as the list of items you make at the outset—it’s the last space separating you and your opponent. Madeline built a gazebo about 500 yards from the brook. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. Obviously. You will have to remove the rock barrier. the brook and rock barrier are on my property. when one of you might say. She discovered that a rock barrier. had redirected the brook further into her property. The property came with three acres of forest alongside a meandering brook. Madeline. Example 1 Madeline bought an old farmhouse outside of a small town. 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. She traced the brook back along its course to see why and where it had changed its path. Having an iron-clad demand probably won’t give you enough room to reach an agreement. she noticed that the brook came within 100 yards of it. It calls for compromise.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. the brook was the property line separating her property from a neighboring farm. “I have to have this.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Joe.
Madeline: But by diverting the brook. My neighbor on the adjacent farm wants to sell part of his property for a housing development. Madeline: Well. she widened her range of options. What if you removed the barrier for a short time. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. you have not only threatened my gazebo. which enabled her to achieve her goals. Madeline: Yes. 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. When she found out that this was not going to solve her neighbor’s problem. She left room for a compromise. and return everything as it was. what I need is to protect my property line and my gazebo. Also. Neighbor: I can do both of these things. Neighbor: I’m sorry. I won’t remove the rock barrier. I understand that. I couldn’t have that. Madeline was able to protect her gazebo. It might not be necessary to make such a dramatic change. at least I’ve maintained my property line. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. but you’ve changed the boundary line of my property. By expanding the range of options available to resolve the dispute.extended right up to my back door when the rain was heavy. Then. This will put these houses right next to me. I’ve lost 400 yards of property on my three acres. and allow the neighbor to protect his home. Making Counteroffers (The “Give and Take”) 123 . I ask that you allow an expert to suggest the best way to provide for the diversion of the brook to protect your house and my patio. but I don’t know what I can do about it. restore her property line. I can’t have the brook in my house. if the brook is redirected.
we know that health insurance premiums might skyrocket.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. dependent coverage could cost us $1.000 figure. The pilots want dependent coverage paid for by the company.000 (which we reasonably should have expected to pay in premiums) in the pension account now. then the pension benefits overall will increase by $10.000 to cover the premiums for dependent coverage.000. Pilots: Look.000. With long-term planning and investments. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000. the company can make your pensions much better. with all wage and operations issues resolved fairly early. the airline paid a total of $200. The airline industry is in a slump. And we cannot afford that $1. Company: This could not come at a worst time for us. This would be a better benefit in the long run. 124 50 Practical Negotiation Tactics . As best as we can tell. what they really need is for you to cover the costs of dependent coverage. If we invest the $200.000. The projections for the next five years were that these costs would increase to about $1. However. as it has always been. Over the last five years.000. The company wants to trade paying for dependent coverage for better pension benefits. Over the next five years. This is just a cash-flow problem that your members have to understand. But only a few of our people are close to retirement age. you are taking a risk on the costs increasing. and are willing to keep pension benefits the same. that would be the minimum increase. Everyone was afraid that the dispute would cause an impasse and a possible strike.000.000. and the premiums for health care just keep going up. and we know that with this new contract term of five years.000 a year over the next five years? Company: Yes.
can we agree to a year-to-year agreement on dependent coverage. and the pilots knew what to ask for when the contract expired. however. The dependent coverage is more important to us now than the pension benefits.000 available. if they were that high.000 actually carried them through four years. or invest in the pension plan? Company: Yes. If we can get two or even three years out of the $200. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs.000 to either pay one year of the premiums. we are. by agreeing to let the company cap its exposure for dependent health coverage. Company: Then it’s okay with us. that would be worth it.000? Once the cap is met.000 the first year on the premiums. The pilots expanded the range of options. The $200. It initially believed that the only option was to put that money into pension benefits. The health insurance market stabilized.000. with a cap of $200. Conclusion The company was committed to limiting its exposure to $200. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. so the decision to be flexible was a good one. then those funds will not be available to invest in the pension plan. Company: If the company spends the $200. the company will not be expected to give us this benefit. Making Counteroffers (The “Give and Take”) 125 .Pilots: But you do have the $200.
I recall the day you drove it out of here.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. Buyer: Yes. be sure to add up the total cost. if I can give you this car with a $300 monthly payment.500! Saleswoman: Yes.” 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. If you are on the receiving end of such a tactic.000 for a Volvo? I bought the one I’m driving for $19. what monthly payment did you have in mind? Buyer: More like $300 per month. $45.… (20 minutes later) Saleswoman: So. Buyer: Way too much! Saleswoman: Well. I just can’t imagine the monthly payment on a $45. I love this car. do you want to look at something else? Buyer: No. Saleswoman: With your 740 in trade. it’s a deal? 126 50 Practical Negotiation Tactics .” “affordable weekly payments. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. Phrases such as “for only pennies a day. and compare it to your strategic objective. Example 1 Car buyer: What. but that was several years ago.” and “low monthly rates” are examples of the salami tactic.000 car. I guess it would be around $600 per month. Saleswoman: I’ll be right back.
can’t you? Buyer: Yes. Sure.000 price into “slices” the buyer thought reasonable.00 per month. and payout slices to reach the total price she wanted.” she had him—she worked around the $300 slices. Great! So. You can do that.00 per month for your service. Once the buyer volunteered that $300 was an affordable “slice. but what else must I buy? Only the basic service for $8.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. Instead of a three-year lease. with your car and $6.00 per month. I can’t discuss another client’s account. I can’t afford that much. as promised.99 per month. Making Counteroffers (The “Give and Take”) 127 . but let me see the numbers.000 down. you can get the Disney channel for only $5. But my neighbor pays $39. down payment. Saleswoman: Simple. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.Buyer: I don’t see how you can do that. (looks at the numbers) That looks good.” She decided to cut the $45. and added the trade-in. I can afford $6. do you want Disney? Yes. do you want HBO? How much? $5. it will be a five-year lease. Let’s see.
00 a month. The total is $38. That’s another $5. and probably felt much better about the total negotiated package because it was presented in modest individual slices. What about the music package? Yes.00 per month was far too much. But that’s all! Then we’ll hook you up on Monday. 3.99 per month. Conclusion The owner thought his neighbor’s service at $39. and SI 1. Any other kids’ channels? Yes. and my wife wants the old movies. but he agreed to six “salami slices” for a total of $38. we had that before. Disney is for the kids! The sports channels are for me.00! Why? Because he judged the per-slice price to be reasonable.00. I really want the sports channels.00 per month. Thanks. instead of one total amount. Okay. 2? How much? $8. 2. they asked about the Cartoon Network. Yeah. Great. 128 50 Practical Negotiation Tactics .Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. That’s $5.
“I can only guarantee this price until 6:00 p. pressure tactics should probably be avoided.m. For example. It should be used with caution: It can end negotiations immediately. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward.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. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). Tactic #33 (The Bluff) is a classic pressure tactic. In some cases. angry negotiations. and the use of humor. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. and it can destroy your credibility. which can be successful if the opposing team has two or more members who hold different views of an issue. but it can be used effectively when one party clearly has an edge. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. today. but in tense. turned off by the tactic. 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. Applying Pressure 129 . however. the traditional car salesperson might tell the buyer. so are you ready to make a deal? This might convince a few buyers. Humor might not look like pressure. 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). but others will walk out the door. When both sides believe that each has equally strong positions.
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. and we need to talk to you about how we can buy you guys out. Don: Wow. Although I do think there ought to be some consideration for the two years you had use of the boat. I don’t know. big news! I’ve been promoted. Lacey: Don. Lacey and Chloe didn’t know that Don and Abby were. It 130 50 Practical Negotiation Tactics . Abby really loves that boat. together and separately. Lacey: I know. In the last couple of years. but Don. in fact. Lacey. I think Chloe and I would be willing to pay more than just the money you guys put into it. boat prices have really gone up. getting a divorce and each moving away (and would have no more use for the sailboat). We’d hate to give it up. and they will weaken your credibility. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. and we’ll be moving south in the next month or so.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. 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. Don: Absolutely. When Lacey found out that his employer was transferring him to another city farther down the coast. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. Don and Abby now use it less and less. The two couples used the sailboat a lot the first couple of years. Such exaggerations are easily revealed or uncovered. Chloe and I would like to take the sailboat with us. And we don’t want to be unfair. Your opponent will consider you untrustworthy and might even be insulted by your attitude.
After all. I was afraid something was going on when you all-butstopped joining us on the boat. and neither of us put much in for upkeep. he likely would have found himself in a stronger negotiating position. and we’re moving farther south. big news!! Don got his promotion. though it’s not so happy.is just about the most important thing we own. Don: Lacey. I’m surprised by your attitude. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. I’ll be glad never to see it again. Don. Lacey and Don’s negotiations changed considerably. and I’ll get back to you. Lacey: Cut it out. but separately. Let me talk to her.) Lacey: Don. It’s about time now for some major investment. I thought you understood how important this boat is to Abby. which you would have to share if you want to retain half-ownership. (After Lacey and Chloe had a chance to talk. Don and I are getting a divorce. Applying Pressure 131 . I’ve been thinking. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. Conclusion Don got a lot less than he could have from Lacey because he found out that Don exaggerated the importance of giving up the boat. Abby: That boat. Abby told Chloe about the divorce and about how she never wants to see the boat again. I’m sorry. (Around the same time. the boat has depreciated. I have big news too. Abby is having this conversation with Chloe) Chloe: Abby. Abby: Well. It just reminds me of how happy Don and I used to be. Chloe: Oh. We’ll be leaving here for the Midwest.
our production line changes at least three times a year. the company president decided to use the stock price as a negotiating tool during the current union contract talks. I’ll be looking to you to make some major wage concessions on this upcoming contract. 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. Here’s how these negotiations went: Company president: Well. they will make their decision based on a review of the stock price that day. I’ll be going back to them as soon as next week. The current stock price is the lowest it has ever been. but this has been such a crazy situation. in fact. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. I’ll have to show them 132 50 Practical Negotiation Tactics . Company president: Well. And as you know. I think you’ll have to agree with me that wage increases in this next contract will not be available. I’m afraid that with this current information. I can’t see how today’s numbers really impact the long-term profitability of this company. And while these fluctuations have little to do with the health of the company itself. and that the economy is strong.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. I’m telling you the stock price is having a huge impact on us already. in this global market. I read in the papers every day that the market is still strong. we will need to make drastic cuts in our operating costs just to survive. the situation in the stock market is not good. Union negotiator: The stock price might be down right now.
) Union negotiator: I’m sorry. he lost the trust of the union. Company president: All right. When the market took a swing up during the negotiations. Union negotiator: I know that’s what you told me. we’d like to reopen talks on next year’s pay increase. If the stock goes up next week. they would do a thorough analysis and look at the health of the company over the long haul. The union became hardened in its position that the employees needed wage increases in the new contract. So. and I’ll have our people look at it. but I checked it out and it’s not totally true. When negotiations resumed. Union negotiator: Well. Conclusion Because the company’s president over-emphasized the impact of the market on the company. here’s what happened. We think this company is very healthy and can withstand the temporary downturn. Give me your proposal for wage concessions. Let’s get back together next week.that we’ve cut expenses to counter the losses in the stock market. Applying Pressure 133 . this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. They told union officials that it would be very rare for a bank to make its decision solely on stock price. okay. (In the interim. no concessions! In fact. If you put it that way. the union checked into the Letter of Credit transaction with some experts in banking. and the union ended up with a substantial increase in their contract. the company’s position was weakened even more. but your proposal to cut wages is just not going to fly. let’s talk about it.
Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. 134 50 Practical Negotiation Tactics . Poker players know all-too-well-that bluffing can be very costly. so their “free” time was very limited. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. The couple had not discussed marriage.Tactic 33: Bluff! Bluff with caution. She knew that if she made such a demand and threatened to leave him unless he made a commitment. and they really have no intentions of doing so. Here’s how the discussion went: Christy: Tom. Tom: Oh. I really hate it that you chose to see the movie with Charlene. and she didn’t think Tom had. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. Both of them were still in graduate school and worked full-time. and I really wanted to see the new Lenny Bruce movie. are you? Christy: I don’t want to be. yeah. they are bluffing. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. We don’t have that much free time together. it might backfire. either. Example 1 Christy and Tom had been dating for about a year. Charlene. but Christy thought the relationship was heading in that direction. This can come back to haunt you. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. 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. I called Charlene and she was available. you will have lost credibility with your opponent. You’re not upset about that. but I really am. If you subsequently agree to begin talks again. Sara said she saw you at the movies with Charlene yesterday.
Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. she paid her own way. It’s made me realize that I want us to have an exclusive relationship. Applying Pressure 135 . I’m not “dating” anyone else. If Tom had “called” Christy’s bluff. Tom: Okay. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. Christy: I just can’t see it that way. It is. Actually. Christy: What I’m saying is that I can’t accept that you are going out with a “friend” who is a woman—not at this stage of our relationship. It really wasn’t a “date”—we just saw the same movie together. She convinced Tom that her feelings were strong. he had to make a commitment or risk losing her. Since he wasn’t sure about that. I certainly don’t want to lose you. I won’t go out with any woman friend. then I’m afraid I want us to stop seeing each other. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. I’m willing to risk losing you. I need to have your commitment that you won’t do that. The union negotiators. I just thought of her because I knew you weren’t available. so he didn’t call her bluff. if you can’t make that kind of commitment. Conclusion Tom didn’t want to lose Christy. and at first he thought she might bluffing. Tom: I have friends of long standing who are women. but very little progress had been made. Tom: You’re serious? It’s that important to you? Christy: Yes.Tom: She’s a friend who happens to be a girl. He believed she was sincere. If that’s not possible.
Nexon: I’m sorry. The union members ended up voting not to strike at this time. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. 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.believing that Nexon would not risk a strike.) 136 50 Practical Negotiation Tactics . First. Nexon: I’m just not prepared to give you one. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. Union: You’re wrong. Another bargaining session was scheduled. Here is what happened at the next negotiations session: Nexon: I’m sorry. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. much less today. Many of our union members who are working part-time hope to work full-time. it will cost too much. Nexon: We’ve got lots of issues to discuss. This is something we just have to have. Second. Why don’t we put this one aside for now. And I don’t believe you’re going to go call for a strike over this. Union: You don’t seem to understand. we want the part-time workers to apply for and fill fulltime positions as they become available. We need an answer today. then all of our other demands will change. but working without benefits is simply not acceptable. we’re really prepared to go the distance on this benefits issue. We need some agreement on this today. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. This is a critical issue to us. or else we’ll be asking the membership to strike. We’re not going to reach agreement on this at all. If we’re not able to reach agreement on this.
Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
and was forced to pay whatever they demanded. Example 2 Let’s face it: Sometimes one party holds all the cards. he was able to successfully bargain for other services. The same kind of thing happened a couple of years before that: In the middle of August. It is sometimes referred to as “pressure bargaining. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. once had to call a plumber in for emergency repairs. while the other is not—that is. when one side has “leverage” over the other. Since his toilet had overflowed and water was continuing to run all over the floor. If the employer is a shipping and express mail company. the guy was in no position to dicker over the price of the repair. for example. not blessed with many household repair skills. its union has the advantage in the weeks just before Christmas. On the other hand. such as the advantage of time. The owners of professional sports Applying Pressure 141 .” Example 1 We have all been at the mercy of someone who uses pressure bargaining. his air-conditioning unit went out.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. Unions can strike at any time to achieve their goals if they have some leverage. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. Since the heating and air conditioning company held no leverage over him. there were times when there was no pressure and no emergency. Try bargaining with a plumber! This homeowner. because this is the busiest time for that industry. He was at the mercy of the company that could install an appropriate unit the fastest.
On the other hand. etc. for example. can suffer repercussions in the form of sabotage. The employees had no power to resist the demands of the employer. and other undesired outcomes. What goes around comes around. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. consider whether or not the two parties will likely meet again in the future to negotiate.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. If you have a special skill that an employer needs and few others have that skill. but before you choose such a tactic. will what goes around come around? 142 50 Practical Negotiation Tactics . it is the union’s turn to hold firm on its demand). When the employer proposed adding duties to the job classifications. he didn’t have to be flexible because the employees believed that they had no alternatives. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. unemployment is low and jobs are plentiful. there are likely to be long-term repercussions. then you are in a position where you can set reasonable demands on wages. she has leverage and can more likely hold firm on her price. despite strong resistance. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. low employee motivation. This gives it the upper hand in negotiating with employees. however.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. the employer has the advantage: a supply of jobs. if the unemployment rate is high and jobs are few. either individually or through collective bargaining. When one side places undue pressure on the other side. but they are less willing to negotiate several months ahead. A note of caution: Circumstances in one round of negotiations might give one side an advantage. If so. benefits. (Team owners are notoriously unpredictable. Other employers find themselves in situations that actually reverse the leverage (when.
(Their dad pulls to the side of the road and turns to face them in the back seat. the little girls began to fight over the doll. and here’s how the “negotiations” went: Dad: You two stop fighting. Andrea: Okay. Why? A sudden surprise can disrupt the dynamics of a negotiation. Just because you saw it first doesn’t make it yours. Almost from the beginning of the three-hour drive. Just share the doll. Their dad tried to reason with them. and I can’t stand it. This time. The doll can be shared. the fighting starts up again. and Susie. We’ve got a long ride ahead of us. (In a few minutes. About an hour into the drive. Mom said so. because you will probably only get to use it once. You’re driving me nuts. Example 1 A father and his two daughters were on their way to visit the grandparents. you have it when we drive home. and Susie hid them under the seat. Tell Susie to let me have it. Andrea: The doll is mine.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. but use this tactic judiciously. the girls had been fussy. the argument is over the doll’s shoes.) Dad: Stop it right now. Susie: The doll belongs to both of us. Andrea. Susie: Okay. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Consider making a suggestion or a proposal that completely surprises your opponent. you have it this part of the trip. Andrea had taken them off the doll.) Applying Pressure 143 . I took it out of the box. I can’t drive if you keep this up.
in fact. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. he slowed down. so it was worth the risk. The auditor asked to meet with the editor to explain his position. Susie: Daddy didn’t say anything about the shoes.Andrea: Give me the shoes back. charging that they breached their duty in their handling these funds. I think I have acted properly. He grabbed it and threw it out the window. and I hope I can convince you of that. and that they had invested and spent the tax dollars wisely. 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. (They continued to argue and whine and pinch each other. Dolly doesn’t need shoes on in the car. at great expense to the auditor’s office and the school board. but nothing else up to that point was working. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. Finally. I want the shoes. they didn’t say another word. Dolly has to have her shoes. Daddy said I got the doll on the way to Grandma’s house. Dad tried correcting them a few more times. He initiated the litigation against the local school board members and several banks that invested the money for the board. The litigation itself had been going on for more than three years. The tactic was so successful. to no avail. Conclusion Dad’s use of a “surprise” tactic was extreme.) Dad: Now there’s no more fighting over the doll. and reached back for the doll. The defendants contended that the auditor’s actions were politically motivated. She can have them later. 144 50 Practical Negotiation Tactics . The local newspaper was prepared to urge the auditor to end the litigation. Both Andrea and Susie were so shocked by their dad’s action.
I guess we’re finished here. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. Your reporters will probably want to follow up on it. Auditor: Well. perhaps you should just cut your losses—and just drop the suit. From what I can see. but recommended that the parties reach a settlement. I think I have something here that will convince you otherwise. 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. Editor: Well. We believe the other defendants will soon follow suit. Here are the papers. Conclusion The editor wrote an editorial urging a resolution for the good of the community. one of the banks settled with my office. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. Auditor: I appreciate their arguments. rather than drop the case. but actually superior to some other entities you supervise. They’ve been making that same argument from the beginning. Obviously. and it is costing your office money and good will. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. They are very persuasive that this is just a political battle. there’s just nothing to back up your allegations.Editor: I’m certainly willing to listen. That’s really the reason this has gone on so long. this case needs to be dropped. the bank would not have done that had we not proven our case. I really think the community would be better off. and a significant amount of money will go toward the tax fund. Applying Pressure 145 . This morning. Editor: Well. as a matter of fact. Thank you for coming in. but I have to warn you that from what I’ve seen and heard so far.
Kevin is against it because he is turning 16 years-old soon. 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. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Kevin: So am I. I’d 146 50 Practical Negotiation Tactics . you might be able to dilute their power by identifying their different interests and addressing them separately. although getting your license and getting a pool table are connected. and a car is more important to him than a pool table. If the other side involves more than one person. but I think it will get a lot of use. especially Kevin.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. night after night. 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. I know we’ll all enjoy it. Kevin: I don’t really care about a pool table. they’ll be mobile! The last thing I want is for them to be out cruising around. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. I can remember spending hours playing with my friends and family when I was growing up. Mike knows he needs to get either his wife or his son on his side. Dad. Tina: I’m really against this pool table idea. Mike: I know. I want to talk about a car! Mike: It’s really not one or the other. Tina and their son Kevin are against the idea. Example 1 Tina’s husband Mike wants to buy a pool table for their family room.
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. and Kevin and his friends use it often. only Kevin did. received it without comment. She noticed that Jim (another member of the union’s negotiating team. What happened? Applying Pressure 147 . don’t you think you guys would use it? Kevin: I guess so. she joined his side of the debate. Kevin. 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. the chief negotiator for the company. Here’s how the negotiations went. Tom. Mike: I really do. I’m surprised. has just presented the company’s initial wage offer. Tina: Well. A number of contract changes have already been worked out and Wylma. I thought we were making real progress. Wylma: Tom. Conclusion Mike found an argument that divided Tina and Kevin. some. then maybe it’s not such a bad idea. the head of the union negotiating team. Once Mike convinced Tina of the idea’s merits. Instead of both opposing the idea. They bought the pool table. A pool table could attract them here. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. 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. But I’m not going to hang out here all the time.
Let’s start again tomorrow morning. (When they resumed. Tom: We don’t think so.) Wylma: Now Tom. Tom had reduced his wage demand significantly. you’ve seen our sales projections and production costs. you’ve heard our demand. Right. Wylma: Tom. these are accurate. Do you think this is reasonable? Jim: (looking uncomfortable) Well. Wylma: Jim. Wylma: Let’s take a break.Tom: Wylma: Nothing happened. but he added some workplace changes that Wylma was comfortable negotiating. 148 50 Practical Negotiation Tactics . Wylma distributed copies of financial data that showed the company’s current condition. as Jim can point out to you. But Tom. This is just what we think is fair. I think you need to rethink your demand. Your demand is totally unreasonable. you certainly are aware of our financial situation. When the negotiations began again. Jim? Jim: Yes. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. these are our actual accounting figures. forcing them to reconsider their demand.
That will just make a bad situation worse. but it should never be at anybody’s personal expense.Tactic 38: Break the Tension Tension is inevitable in most negotiations. the oldest and youngest Jones children. get over it. some of the siblings decided they liked giving presents to one another. Example 1 The four Jones kids grew up. especially between Madison and Cory. When are you going to grow up? Madison: (very emotional) I can’t believe you can say that to me! Christmas should mean something! Cory: It’s just silly for adults to exchange presents. Cory: Madison. When all of their children were small. but the thought that matters. Applying Pressure 149 . it was easy to agree on just giving presents to the children. Sometimes the argument got heated. Madison: Okay. I don’t feel Christmas in the way I used to. and had children. but it is really important to me. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. so you can find a way to quickly neutralize it. We can’t afford to buy each other things we really need. You are almost 40 years old. Humor often works to break the tension of the room. but as the children grew up and had families of their own. married. so what’s the point? I don’t need another tie! Madison: It’s not the gift. Tempers flare and people say things they shouldn’t out of anger or frustration. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. and it makes me very sad. I want to say something. so pressure grew to draw names and exchange gifts. Ever since Mom and Dad died. Stay alert and watch for clues that a negotiation is about to get out of hand.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.
Example 1 Julie and Dara both attend a local preschool. C. don’t you want to play? We could color before your mom comes. I want to play “Princess” and I want Dara to be the “Prince. they were the last children left in the playroom for the remaining two hours of the day.” Can I color now? You said we would color later.” but she needed Dara to play with her.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with.” Dara. was ready to color. Then we can color. but since the other children in their room were not there. and that doesn’t happen without compromise. At some point. One day. however. Okay. or maybe tomorrow. how about going out to the yard for a while? You can swing or play ball.: Julie: Dara: Mr. (In a successful negotiation. Mr. I want to play “Prince and Princess. Dara. Both of the little girls liked to play ball when they were outside. 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. they would have to play ball with older children. the exchange will be between things of equal value. C. Julie wanted to play “dress-up. If there is resistance to compromise. The day-care worker wanted to take them outside for a while so that he could visit with his friend. the individual might be afraid that the exchange isn’t equitable). not the Prince. who was outside with older children. 154 50 Practical Negotiation Tactics . If I can be the Princess. Isn’t it “later” yet? Right now would be a good time to go outside. each side must decide whether or not one more compromise will produce an agreement that they will later regret. When that point is reached. it is better not to compromise.: Julie: Dara: Julie: Girls.
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. We want to play dress-up and then color. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. and they still had time to color. They did all the compromising they were willing to do. Mr. The owner decided to try for a variance.Mr.” No. We don’t want to go outside. wouldn’t you like to go outside first? After you swing for a while or play ball. and teenagers attracted by Making Progress 155 . the owner had to supply additional parking. failed to offer the children something that was as important as the plans they had made. The owner and a small group of neighbors met to talk about these problems. however. the parking lot will start to look trashy. you can come back in and play “Prince and Princess.: Julie: Hey. C. C. Conclusion The children stayed inside and played dress-up. The existing parking lot didn’t meet the current parking standards for that size theater. or apply for a variance. According to the city’s zoning laws. 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 neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. neighbors became concerned about the changes to the mall. When his variance application was made public.
Many of our homes back up to that lot. not having direct access to the south lot from the street would be unworkable. And. the south parking lot has not been used much.the theater will start to hang around and maybe wander around our yards at night. with your plans to put the entrance of the theater on the east side of the mall. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. as you said. We hope you’re right. With the Comedy Club and the grocery store on that end. but it’s not ever full. So. What if I changed the entrance to the middle of the lot? That way. lights in and out at night can be very annoying. the closest parking to it is along Elm Street. and break in his door. even though I’m not adding any parking. driveways on the south side of the mall are along the east and west side of the parking lot. We’re just not convinced. I could put a privacy fence along the east and west—at the backs of your yards. if I agree to move the theater entrance to the south side. The neighbors: Owner: 156 50 Practical Negotiation Tactics . the north lot is used more. We’d really like to block off that cut-through and have the theater face the south. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. Not having in and out traffic to the south of the mall is just not very practical. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. In fact. We’d like you to prohibit cars from entering or leaving from the south lot. only when that lot is full would cars come around the mall and park on the south side. Right now. and we’d like to keep it that way. Right now. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. You could have all of the traffic enter from the north lot. I’m afraid.
Agreed. then will you agree not to push for increased private security? Yes. But you’re going to have to have some kind of security as well. If I agree to move the theater entrance to the south. If the fence was set back the width of a driveway onto your property. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. Now you’re talking about considerable expense. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. add a new entrance into the south lot. set back a driveway width. and they discouraged patrons from parking on neighborhood streets. the neighbors reported that they were very happy with the way it all worked out. Making Progress 157 . The fences created a buffer from the lights and noise. and make sure the parking lot is kept clean. Teens can form into gangs if left unwatched. The compromises were what everybody could live with. there could still be access from the street to our garages—just not to the main parking area. Conclusion Both sides had to give up something on certain items in order to reach agreement. however. put a privacy fence along both the east and west sides of the south lot.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. And a year after the theater opened.
Your opponent might give in readily. She learned that everyone in the neighborhood had complained at least once. Take advantage of any confusion about your friendliness to try to get them to agree to some of the easier things you have to work out. and didn’t stop until 6:00 a. I’m Joan. The dog was Mrs. professional. Close your windows at night and don’t listen. Joan was already pretty tired. thinking that you will be just as easy to work with on the sticky issues. Lonely’s only companionship. Lonely. Mrs. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Example 1 Joan was new to the neighborhood. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. 158 50 Practical Negotiation Tactics . so her neighbor’s barking dog came as an unpleasant surprise. Joan: Hi. and what kind of complaints might have already been made. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. and that as angry as they were. incident was usual or unusual. Present your position forcefully. Joan had a new baby. but be friendly. If your opponent is aggressive or angry. and started to get upset.m. but going out of your way to be friendly is an especially helpful tactic. Joan decided to at least try and talk to the neighbor. She didn’t believe her neighbors ought to complain about the barking. and I just moved in next door. she just didn’t think it was a serious problem. they had gotten nowhere. They might even start to underestimate your negotiating skills. This gives you an advantage. because you are the one to set the tone for agreement.Tactic 40: Be Friendly Being polite. respectful.. Lonely: If you’re here to complain about my Rocky. and pleasant always enhances one’s ability to reach an agreement. just forget it.m. and because she was hard of hearing. Mrs.m.
Maybe I could come back tomorrow and bring him? Oh. then. it’s probably because they just haven’t had the time to get to know him. (Joan’s sleep was disturbed by another night of barking. by the way. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. sure. isn’t he cute! He’s a handful. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. I might have to talk to you about Rocky. I know that some of these people around here don’t like him. Lonely: Joan: Mrs. Well. I guess that would be okay. Lonely: Joan: Mrs. but she took her baby and went to visit Mrs. not at all. I’ll see you. Lonely: Joan: No. Well. though.) Hi. Making Progress 159 . Who. I just wanted to come by and introduce myself. I need to get the baby home. too. Lonely: Joan: Mrs. Here’s my little angel. He’s a real comfort to me. Do you think his age has contributed to some of that? You know. I guess so.Joan: Mrs. Lonely: Joan: Mrs. He’s been keeping me up at night. Mikey. no. Why. I can’t pay for something like that. don’t worry about that. I stopped by and visited with him over the fence this morning. The barking at night has been mentioned to me. How long have you had him? Almost eight years now. No. I’ve got a friend who is a veterinarian. I’d like to introduce you to my new baby. I sure hope he starts sleeping through the night soon. Lonely again. When he does. I’ve only got my Social Security. is a really sweet dog.
and Mrs. 160 50 Practical Negotiation Tactics . agreed to meet with the mayor. Company ZZZ. I think that if you could have let me know ahead of time. that’s very understanding of you. you would have. that the press got hold of the story of our company’s activities before we could call you to let you know. Joan took up contributions from the neighbors.S. he prescribed medicine that gave Rocky a more regular sleep schedule. its 150 management and sales employees could continue to work in Happy City. When he heard the news on the radio. Under its new corporate structure. overseeing a factory in Mexico and selling products in the states. Hearing about this from the press obviously puts you in a very embarrassing situation. They anticipated that it would be an unpleasant meeting. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. Lonely and Rocky. Lonely’s needs and arrive at a workable solution to the problem. Lonely didn’t have to pay for the medicine she could not afford. After Joan’s veterinarian friend visited with Mrs. Here’s how the meeting went: Company ZZZ: We’re very sorry. the mayor called and asked for a meeting with Company ZZZ officials. The barking all but stopped..Conclusion Joan’s friendly approach enabled her to understand Mrs. Company ZZZ: (surprised) Well. It’s very difficult to make a move of this type without having it leak out. Mayor: (very friendly) I understand how these things happen. of course. 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. U.A.
because I’d hate for us not to make an appropriate pitch to them. We just haven’t heard anything yet. or would we need to involve the Malaysia group? Company ZZZ: Certainly. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. Making Progress 161 . You’ve been very understanding about this. Unfortunately. 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. the 150 management/sales jobs did end up moving to Mexico. Mayor: Please let me know as soon as you can. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. By the way. This strategy worked. Would you be in a position to talk to me about such a deal. so we need to understand how we can affect their decision on keeping an office here. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. They need a really good deal on the plant price. Many laid-off employees did indeed find new jobs at the plant.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. Mayor: Great! Let me know when we can talk again. the city has a potential buyer for your plant building. The buyer is a “disadvantaged business” we have been working with for some time. Company ZZZ: I’m not sure what to tell you on that. and the mayor was reelected. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. and I want them to know that. We recognize that your new corporate owner is a large company located in Malaysia.
South Carolina. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. the investigator. this time in front of a hidden recorder.00. the younger sister. They might worry that the tapes will be made public or given to others. Jones’s supervisor. Susan understood the impact a tape recording can have when it reveals a lie. The two sisters had saved up a little money so that they could buy souvenirs. The effect on the other party might be even more substantial if lies. 162 50 Practical Negotiation Tactics . She borrowed a tape recorder so she could ask her father if this was a fair deal. were on vacation with their parents in Myrtle Beach. but Susan had only $20. Susan repeated her demand.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. and Alexis. Alexis agreed. had $40. who was disappointed to hear that she might propose such a deal. age 15. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. age 14. and Jones. or used to pressure the other side to agree to certain demands. Somehow. Michael Wood. thus becoming a source of embarrassment. Fred Adams. Conclusion For the first time in her life. Then he played the tape. until Susan said they would evenly split what they bought. Alexis then played the tape for her father. the accused. Alexis.00 to spend. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. or simply “bad faith” methods have been used by the other party. Example 1 Susan. Susan denied it. Alexis knew this was not fair. threats. are talking about a possible settlement of the issue. He asked his elder daughter about the arrangement.
But by refusing to repeat his answers. Appleton both claim they saw the incident and will testify. Conclusion Jones had knowingly lied when he denied the charges.” meaning something other than copies? No. and gestures did not have a single hint of sexual implication or innuendo? None at all. You never touched any part of her body? Not even accidentally? No. So. Mr. No one could have possibly misunderstood your intentions? No reasonable person. Mr. “Do what I want. I’ve brought a tape recorder with me. Ruiz and Ms. you are aware that the next step in this process is to ask witnesses to come forth. to quote you. Starr.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. He failed to think about what might be the next step. Well. stares. Jones. And you did not threaten her job if she did not. I simply asked her to make copies for me as quickly as possible. Jones suddenly realized that his strategy would not work. Making Progress 163 . exactly what you said to Ms. he also lost his negotiating position. (a long pause) I want to see my lawyer. Your request. So you refuse to repeat the answers you just gave us? Yes. I think I can write my recommendation. Stuart. When Adams set the tape recorder on the table and revealed that he had witnesses. and now I’ll ask you to repeat your answers—on tape. And please describe your general manner.
Their dad instructed them to share the candy bar. is usually careful about dividing the object into two equal parts. Roberto will get to choose which half he wants. because you did the cutting. with the remaining part going to the person who did the dividing. Maria. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. Oh.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. one person is given the task of dividing the object(s) into two parts. the classic “split and choose” tactic might be the best way to settle the issue. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . Many of us learned this one from our parents: After two people agree to the strategy. of course.” the divider.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Realizing the potential of getting the “smaller half. which certainly is large enough (he naively thought) for two young children to easily share. take this knife and slice the Snickers into two halves. Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. Maria and Roberto: No. The second person then chooses which of the two parts they will receive.
Archie: Here is the map. Example 2 Two friends and business partners. That makes them more desirable. They all have a great view and are equally desirable to build on. that sounds fair. Deal? Clarence: Sure. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible.000. The problem is that one of us will get four lakefront lots and the other will only get three lots. both parties. 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. Clarence and Archie. according to county deed restrictions. quickly recognize the fairness of the divideand-choose method. Give me the map and a pencil. Archie: That’s true. jointly purchased fourteen acres of lakefront property several years ago. There is only one place for an access road that must serve all lots. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Clarence: Right. Then I will choose which parcel I want. but is not sure how to arrive at a fair split. Lots must be at least one acre to be developed. so we should be able to divide the property fairly. Archie: I really don’t care either. and wants to divide it into two separate parcels. I don’t really care which lakefront lots I keep. Making Progress 165 .Conclusion When two people desire the same object and it is something that can be divided in some way. even children. Archie is ready to build a retirement home on the property. They have a recent appraisal that values the property at $150.
and both men were happy with the arrangement. and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics . 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.
” Under store policy. “Okay. However. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. 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. so the salesperson delivered the suite himself. attach legs.” thus extending the scope of the negotiations. and the delivery carrier doesn’t set up mirrors. His tactic was to throw in a “nickel” in order to make lots of “dollars. miles from their home. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). Brenda did her part when she said.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. we’ll take the suite if you’ll throw in free delivery and set up the furniture. With a great deal of effort. etc. he also set up all of the furniture in a second-floor bedroom. supposedly the bargainer in the household. Jason was having a hard time getting the salesman to lower the price. is expected to dicker over the price. Her husband Jason. What started out as a single issue is now a combination of a major issue and a much smaller issue. delivery was limited to a small geographical area.
“Okay.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. 168 50 Practical Negotiation Tactics . This experienced bargainer said.important item. 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. In one case. At the end of negotiations. If one party misjudges the situation. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. so be prepared to withdraw the nickel and dime item at the hint of trouble. it can be a dealbreaker. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. we’ll agree to Health Plan A with another ½ cent on the pension fund.
trustworthy. thus creating the impression in others that the good qualities they see are present all the time. and all the rest is small junk. Kathy: Then I’ll take the couch and love seat. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. Donna: They match. Donna: No way! These are the last two pieces of furniture. and performance evaluations for people to come across as likeable. You can go first. People tend to make an effort to put their best foot forward. or knowledgeable. Kathy: But they are a matched set. This creates what is called a “halo effect. Kathy: I suggest we take turns choosing which of these things we want. decision-making meetings.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Donna: I’ll take the bar with stools. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . but they are two pieces of furniture. Kathy: I’ll take the pool table. Donna: Okay. I’ll take the color TV.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews.
I want the stools. (Pause) We’ve got to settle this today and get this stuff moved. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. Good idea. I trust his judgment. Let’s call Johnny Ryan. Example 2 During a heated labor negotiation.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. He’s our cousin. what can we do? Give me the couch and love seat! No. What for? Tell him the situation. 170 50 Practical Negotiation Tactics . and ask him if the couch and chair should be one item or two. The union negotiators. with a record of labor involvement that included three recent strikes. and if the bar and stools should be one item or two. the team representing the city management found itself unable to convince the union negotiators that their newly proposed staffing plan would provide adequate personnel for each firehouse. Johnny had the “halo” of an honest person. and he has always struck me as an honest person. I want the love seat. He might or might not have also been a good arbitrator.
simply did not trust the management team. when negotiations again stalled on a retirement plan issue. as a consultant to review their proposal. 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. They might have stretched his halo farther than his expertise and experience warranted. He said he believed that it would work as presented by management. the management team hired Sam Boston. On Monday. The teams took a weekend break from the stalled negotiations. and that he did. Boston was widely known as a totally honest man who speaks his mind. This time. the consultant did not speak. Boston went to the negotiation table with the management team. Two weeks later. thus bringing the negotiations to a conclusion. the city management again hired Boston. even if the proposal appeared to be valid. He solemnly told the union negotiators that he had been hired to review it. but the power of the so-called halo effect was great. During the break. Making Progress 171 . but his mere presence caused the union leaders to accept a management point as valid. without any reservations. the former union president. The union accepted the proposal.
Here’s a list of the five that are about the same size as yours. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. has owned the house for 24 years and is downsizing to a condo. What? That’s $35.000 under the listing price! We realize that. but we feel that it’s a fair offer.000. $237. $235. They believe it is overpriced. and we are countering with an offer of $250. (Next day) We’ve reviewed the records you’ve produced. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. Sam Jones.000.000. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.500.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. the other party will ignore or refuse to believe the information.000. The owner. and $237.000. but the key is to gather facts that you might need—not just the facts that you will need. but you’ve priced it way too high.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . I’ll get back to you. but the right facts presented at the right time can chill or astound and completely turn things around. This offer is for more money than any four-bedroom houses on this neighborhood list. $229. We love your house. Sometimes.000. They sold for: $225.
and did his homework. Hatfield: While I was at purchasing. I asked for a list of all new PCs bought this year.000. We’ve talked with purchasing and we have the authority to buy seven for $2. who was not particularly knoledgeable about real estate.600 unless the company president approves.400 each. Conclusion Hatfield had anticipated what his supervisor’s position would be. The last 20 were over $2. let’s not worry about it. Conclusion The Joneses had based their asking price on the advice of a friend.600 for a computer. I’ll be… Okay. Supervisor: If I okay this purchase order. No one can go over $1. and wisely chose exactly when to present them in order to make his point.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute.000 each. and we know that only this model will meet our needs. if other departments have ignored the policy. Well… We have a written counter of $245. Order the new computers. That’s the bottom price. Example 2 Supervisor: You know the policy. Here it is. Making Progress 173 . The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. I’ll get called on the carpet. He found facts that supported his position. We accept. You can’t pay more than $1. Supervisor: Well. Hatfield: My staff has done a lot of research.
some people would have forty or fifty books out at the same time. I trust you. reveal misperceptions or lack of knowledge about positions that can be corrected. but I don’t set the policy and I can’t make exceptions. but you don’t want to jeopardize your job? Jenny: Yes. Would I do that? Jenny: Maureen. Maureen: Well. and two are for my husband. I’m sure you would not. Example 1 Maureen: What. yes. But I can’t break the limit rule—it is an absolute rule here. and they would all be unavailable to others. I can’t check out these four books? Jenny (Librarian): That’s the policy. I can do that within the rules. Otherwise. Maureen: Well. A maximum of three books can be checked out to a person at any one time. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. you know me. The effective use of probing questions can help achieve a favorable settlement.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. If you trust me. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. Maureen: So you trust me with the books. I want two of these. can you check out two on a card for him? Jenny: Well. 174 50 Practical Negotiation Tactics . Maureen. They can help you identify or better understand what the other side really wants.
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. Brooks. Can you get me the number? Sure. and they don’t even have a use for the sales data. But this forces us to make decisions without complete information! Yes. Why? Some policy? Yes. are you sure I can’t get your information technology people to give us direct information on product sales? No. Babu. Mary. but it’s because you don’t have access clearance. Security? Right. and Kenzie. They say it’s a security issue. I couldn’t find anyone who knew it. (Next day) Do you have the policy about giving out product sales information? No. Sue. If that data ended up in the wrong hands. Mary and Kenzie? They are 2-3 pay grades below us. Who does have access clearance? Mike. Jay. it could kill us. we can’t do that. What’s the policy number or date of approval? I don’t know. Making Progress 175 . Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark.
Mark: Well.P. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. 176 50 Practical Negotiation Tactics .” He intended to do this until he hit a dead-end or was able to find a solution to his problem. When can I get the data? Mark: Today. if we can have access? Mark: I guess so. Jack was able to receive clearance as well.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. that’s been the policy since I’ve been here. I’ll sign now. His probing questions turned up a critical fact. I’ll get it for you ASAP. Once he discovered that employees in lower pay grades had access clearance. Jack: Here. Jack: Can you ask your V.
Stage 7: Reaching Agreement he final stage! It might come minutes. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. In this process. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. If friends or neighbors need to settle something but prefer to avoid the negotiation process. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). When multiple issues are at stake and most have been agreed upon during negotiations. this process can easily result in a final settlement. They bring it out when a dispute arises. and the classic Walk Away (Tactic #48). 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. days. the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. T Reaching Agreement 177 . or even months after the first offer is presented. 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. When two parties believe they have an oral agreement. hours. this tactic can produce an agreement. and the child learns an important lesson about life.
Let’s do go to Virginia Beach and Washington D. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. off-again discussions. but his wife Nancy likes to stay put and relax. Example 2 Negotiations can take a long time and incorporate many issues. Near the end of a particularly anxious bargaining session when there was little time left to negotiate.…” 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. As he hugged her. She said. Larry Snyder gets bored staying in any one place for many days. 3) and adds one last key demand to the congratulation sentence.C. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Nancy brought up the subject of vacation again after dinner. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. D. After days and weeks of on-again. His wife had carefully planned her exact “premature” vacation agreement.C. 2) allows the other side to feel the release that comes with completing the bargain.Tactic 47: The Premature Congratulation This tactic draws its strength from timing.” Conclusion The husband was so excited about visiting Washington. They both have stressful jobs and look forward to their annual vacation together. 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.
I felt the tension in the room. “It was hard for us. However. My team had convinced me that doubling the time frame would create a real problem on the shop floor.” Bob: Ted timed this perfectly. but acceptable.almost willing to accept any deal. but also that they sensed the weariness of my team. There were grins and handshakes coming from the other side. “…as long as you give us a 45-day probation period. In our last offer. as the negotiator came closer. When the chief negotiator emerged with his team and headed toward my team. Therefore. but the other side continued to ask for 60 days. Ted said. (This is a bad position to be in. but we agree to everything in your final proposal…” Members of my team shouted hooray. and rested. One operating issue involved the probation period for new employees. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. It was so close. The celebration had begun. because it makes you pretty vulnerable. fit. Reaching Agreement 179 .) Here’s what happened: Bob: I knew that the other side was similarly harried. he turned on a large warm smile and extended his hand to shake. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. We all knew that it could come down to agreement or strike. One of the best pieces of negotiation advice is to remain fresh. My team was afraid we would not even come to an agreement. symbolizing that he was agreeing to the entire final offer. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. The old agreement specified a 30-day period. we made some small concessions on financial matters. but held firm on remaining operating principles. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes.
Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. 180 50 Practical Negotiation Tactics . The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. However. the negotiator skillfully finishes his words of congratulations by inserting one last key demand.
You had time to assess my car. I’ve worked with you before. I like it. My name is Jay Vahaly. I don’t want to negotiate. and he can simply buy it when the lease expires. the following exchange occurs. Jay. Jay. He really likes it. Whether you are really bluffing or you are serious.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 my Avalon is a good car. here are your keys. He stopped by Pembroke one day to look at the new models. or go after you and perhaps make a new concession in order to get you back to the table. (Vahaly drives the new Highlander home.) Jay: Sue. but I thought I might want to try a new Highlander. The next morning. but his Avalon has been a good car. Jay: Hi. all from Sue Wilson. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. be sure you think this through beforehand. too. right? Jay: Yes. what can you do on a 36-month lease? Reaching Agreement 181 . and the lease on my Avalon is about to expire. a veteran salesperson. You bought your wife a new van just last year. if I roll over the lease to a Highlander. Sue: I remember you. Sue: Well. Your opponent will have to either let you go and run the risk that things are really over. Sue: Let me get you the keys so you can take this one home overnight to see how you like it.
That was the figure he was looking for. Sue: I’ll try. Please go back and work out a lower lease payment. Jay. they came down to $199 more on a thirty-six month lease. (Jay got in his car and drove home. I thought I’d get a fair deal. a successful musical instrument sales and rental store. Jay. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. (15 minutes later) Sue: Well. These Highlanders are hot items! Jay: Well. Jay: What? I was thinking the lease payment would be. (He walks away) Sue: No. Let me try again. at most. Sue called him as soon as he walked in the door and offered another $50 break on the lease. I’m disappointed. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. Jay accepted.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. $100 more. They’ve talked about retiring in recent months. Jay—wait. but 182 50 Practical Negotiation Tactics . He effectively used the walk-away tactic to let Sue know that he was firm on the price. He was prepared to keep his Avalon if the lease was even $1 more than his limit. Sue: Sorry.
let’s eat lunch. Reaching Agreement 183 .0 million. One day. What do you think? Judy: Larry. Michael: I have a check right here for 4. Michael Roberts. come out here! (Judy comes out from the back room. Two months later. You rejected it. In reality. visited their store. with a certified check. you’ve already told us that. Larry.5 million. our accountant said it’s worth $6 million. He met with Bizannes twice before. Michael: Well. How’s business? Larry: Great! I’m surprised to see you again. Larry: Judy.5 million.5 million. and I only need your building to own it. so why are you here? Michael: I’ve discussed it with my partners. (Judy and Larry walk into the back room and close the door. which the Bizannes accept. Michael: Good morning. but their continued walkout convinced Michael that they would hold firm.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price.) Larry: Michael is here again. Judy: Larry. a local developer.both of them love their store. I still want to develop this block. after no contact from Larry or Judy. Michael calls on them again with a check for $5. and we gave you our price. and I’m prepared to offer you $4.5 million for the building. today. Larry. and he is offering us $4. go back to your office. Larry: Michael. Larry: Yes. and I’m not interested in less. they were prepared to accept $5.
They inform her that they put the machine on e-Bay and have an offer of $1. Lynne told Jenny that she and her husband Gary have restored two other Singers. Six months later. Both involve the use of third parties who are objective. Jenny: No. In ﬁnal offer arbitration. We have a few dollars invested in parts and we had fun working on it. Example 1 Jenny and Lynne are sisters. In mediation. but they wanted to give Jenny $500 for her “share” of the machine. That was the deal. Lynne and Gary bring the restored Singer to Jenny’s house. which she has kept in a barn for over ten years. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. I offered it to you for nothing. Keep the $1. which is generally voluntary.000. Jenny told them to sell it. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. In arbitration. Lynne: No.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. and would be able to restore hers as well. 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). In most arbitrations. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. One day Lynne dropped by for a visit and the discussion turned to the old Singer.000. Jenny has an antique Singer sewing machine. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. Each party wants their offer chosen. I won’t take it. Lynne responded that this was their intention. both sides have agreed in writing to accept the arbitrator’s decision. Let’s split the money. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). 184 50 Practical Negotiation Tactics .
I can’t see any way to reach an agreement. At best. after six weeks of negotiating. Tina. based Reaching Agreement 185 . Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. but we’ve made no movement on any of them since we started. Tina: Good. he did not need to “haggle” with them. I have chosen management’s offer to keep it as it is under the current contract. Their father found Jenny’s position to be the most reasonable. the old machine was only worth $50 when Lynne hauled it away. and meet back here in 72 hours—3:00 p. since he could only choose one offer. Example 2 Ralph: Well. (One week later) I think Jenny’s position is the most reasonable. Then we both submit our final offers to Judge Ryan within 48 hours. I’ll buy that.) Judge Ryan: Here is my written. The union’s position could have run into millions of dollars. binding decision on the three items. first on the health insurance co-pay. My troops are getting restless. on Friday. Ralph: I know.” Lynne proposed a 50-50 split. Ralph: Right! (Friday at 3:00 p. Tina: Yes. As a brief explanation. we are down to only three unresolved items.Jenny: Dad: Okay. They should get the other $950. Any increase in value was due to the work of Gary and Lynne.m.m. so I am invoking the finaloffer arbitration ground rule we have in place.
I have chosen the union’s final offer. on the merit pool distribution method issue. Finally. Well. reasonable resolution to their last three unresolved issues. I’m sure you realize that we could have taken six more weeks to reach the same point. on the clothing allowance. Now let’s get a signed contract. Conclusion The final-offer arbitration process enabled the parties to gain a fast. It will only cost $120. and stress. money. nor why their method was superior.Ralph: Tina: on last year’s data. and peacefully finalize a contract that contained several important gains for both sides. but we agreed to this process. Second. No increase has been given for six years. At least we both saved time.000—less than 1 percent of the total package. I have chosen management’s offer because the union did not justify why the past practice should be changed. 186 50 Practical Negotiation Tactics . and an item that large should have been negotiated at the table. Ralph. I’m not happy with your decisions.
The owners were selling the house without a real estate agent.000. Example 1 Bill and Paulette had been house-hunting for some time. everyone is busy grappling with the details of the negotiations. Seller: Yes. Bill and Paulette fell in love with the house. all the usual stuff in a sale. During a discussion. however. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. They finally looked at a house they really liked. not the furniture. Obviously. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. At the very least. and decided to stop by to see if they liked the house. We’d like to make you an offer of $150.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. and felt that they would have to work fast to make an offer before someone else did. we won’t be involving our real estate agent. They were not the only couple to come to the open house. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations.000. and one of the other couples looked very interested. Bill: Reaching Agreement 187 . Seller: We’re asking $152. they looked at this particular house on their own. If we shake hands on it right now. Bill pulled the seller aside. 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. They saw the “For Sale” and “Open House” signs. and while Bill and Paulette had been using an agent to help locate houses.
Under the section for appliances to be left on the property. I think we can work something out. he left the price at $150. she said that her supervisor had repeatedly asked her out. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. but I’d like to make sure there are no misunderstandings. look this over. Let me just get the standard “offer of sale” form and fill out what I hear you saying. When he had the chance to put the deal in writing. and two area rugs. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics .000. real.Seller: Just a minute. the refrigerator. The supervisor pointed out that he had a staff of 20 or so women. he began to have “problems” with her job performance.000. all window blinds and drapes. he listed the stove. and when she refused. Bill: (pleasantly surprised to learn that the garbage disposal. and the two area rugs were specifically included. If it’s what you meant. It worked. Conclusion The seller had always intended to leave the garbage disposal. and that the problems with her job performance were. and the garbage disposal. In the section for fixtures and miscellaneous items to be left on the property. he listed an attached hutch in the kitchen. then we have a deal. the hutch. and had been prepared to drop his price to $145.) Seller: So. (The seller recorded the offer of $150. since he probably would have missed them) Yes. In her complaint. the hutch. Example 2 Monica brought a sex discrimination charge against her employer.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. The supervisor assured the employer that there was no basis for her complaint. that’s what I meant. and the two area rugs. in fact. the house is yours. a public agency. Sign here. Seller: Okay.
the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. even though you are paying Monica because we can prove he did do something wrong. You’re just trying to make it seem as if your supervisor did nothing wrong. settling—What difference does it make to her? She’s getting her $100.000 without actually having to prove anything. and expensive matter. but it’s not standard when a complaint is formally withdrawn. Withdrawing.there was little basis for the complaint. He offered to send settlement agreement papers to her. But the employer doesn’t want to go through the expense and publicity of a trial. Why’s that? Well. It might be standard when there’s a settlement. drawn-out. and must agree not to tell anyone about the $100. I’m He: She: He: Reaching Agreement 189 . Monica had. my client is supposed to formally withdraw the complaint rather than just settle it. by this time. even though we’re certain we would prevail. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. And the confidentiality clause is standard. Look.000.000. you didn’t mention in the agreement that in exchange for the $100.000. but said that fighting the charges would be a long. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. then Monica had to acknowledge that the supervisor did nothing wrong. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. The supervisor insisted that if the employer felt he had to settle. He’s happy to prove that in court.000.
000 and the conditions of the offer. Monica accepted the $200. to his disadvantage. It was made clear that the employer had paid the additional $100.000 just to get the employee to “withdraw” the complaint. 190 50 Practical Negotiation Tactics .000 when all that was asked for was $100.She: authorized to pay $200.000. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. I’ll take your offer back to her and let you know. There was a confidentiality agreement. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. but word did get out that a public agency paid $200.
Reaching an agreement is the first step. but some of the decisions were put off for a couple of months. talking is not always the same thing as communicating. reaching an agreement is sometimes a long and difficult process. One way to help the parties abide by an agreement is to put it into written form. of course. but it was not what I meant. I thought you said something else. When two friends agree on what movie to see. Certainly someone has said to you. In Tactic #17 (Package Items). commitment. depend on the kind of negotiations in which you are involved. however. The degree of detail and formality of a written document will. A union contract. and contract. However. when they engage in honest “give and take” negotiations. and when they agree to solve problems together. even an informal agreement benefits from some type of written documentation. most certainly needs to be in written form. operating under an agreement after it has been reached can be even more difficult. Putting an agreement into writing serves three purposes: communication. If the agreement reached at the time had been put into writing with all three sisters signing it.” Clear communication is essential if you want to reach an agreement and have it abided by.” By the same token. “Oh. Putting the Agreement in Writing 191 . it would have been easier to resume negotiations at a later date. it is much more effective in the long run when the parties enter into “win-win” agreements. a written document is hardly necessary. rather than attack each other. “That may be what I said. then the parties have to abide by the agreement. Think of how often you have said to someone. A Communication Hearing is not necessarily the same as listening.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. As these examples of personal and business negotiations show. Unfortunately. the three sisters reached an amiable agreement.
pictures. seek information. or express a thought or emotion through words. In Tactic #4 (Use Objective Criteria).” In Tactic #14 (Don’t Always Hide Your Weaknesses). you have created something tangible that can be referred to in the future when memories become fuzzy. When communication is limited to the spoken word only. pictures. a couple of months away. Writing an agreement down gives the parties an opportunity to use more-specific or precise language and eliminate some of the emotion that might have accompanied the negotiations. the price is spelled out in the loan document as “twenty-two thousand. 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. If Jason fails to live up to his side of the deal.944. sounds. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. the message being conveyed and received might be understood differently. And because the sender and the receiver are two unique individuals. he can be reminded of the details because it’s all there in black and white. nine hundred and forty-four dollars—$22.Communication is a process that involves a sender and a receiver. 192 50 Practical Negotiation Tactics . that is. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. The receiver has to decode the message being sent by trying to understand and interpret the words. His mom could more easily enforce the agreement if she had it in writing. The sender wishes to convey an idea. Who isn’t excited about buying a brand new SUV or truck? Until. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. sounds. When you create a written record of the details of an agreement. or movements being used by the sender. or movements. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written.
In either case. one party will work if the other party pays for the work. or it isn’t an agreement—it’s merely the conveying of a gift. dating it. what. when. WHAT? The written document should clearly describe the item(s) covered by the agreement. which kind of. leading to misunderstandings and contract disputes. have your spouse also agree to the details of the agreement. signed. and getting all the parties to sign it usually creates an enforceable contract. before the trip. protect yourself by having a written. Carefully and completely describe the subject matter of the agreement. Here’s what we mean. ask yourself the basic questions of who. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. say. and so on in standard contract form. One party wishes to buy what the other wishes to sell. WHO? Provide of the full names the parties necessary to the agreement. Generally. which. and put that information into the document. in writing. and dated agreement.Contract Finally. Both parties must receive a benefit or something they personally consider of value. one party will change behavior in exchange for something of value from the party who wants the behavior changed. When you are ready to commit yourself in writing. details such as what fixtures stay or what appliances go can be easily overlooked. You can do this more formally by taking them to court (perhaps as a last resort). your plants die because the house-sitter wasn’t told to water them. as many people learn when they purchase a home. However. 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. and how much. pulling an agreement in writing. the address and description of the real property. 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. the real estate contract includes information about the buyer and seller. how many. why. Failure to do so can lead to big problems. If you have agreed to pay someone to house-sit while your family is on vacation. Putting the Agreement in Writing 193 . where.
Putting an agreement in writing. in fact. agreed to the same thing.The remaining questions fill in the details of the agreement. It gives the parties an opportunity to really buy into the deal. if that becomes necessary). The more-specific and clear these details are. dating it. the better. 194 50 Practical Negotiation Tactics . how much or how many. And it can create a tangible reminder of the deal (or an enforceable agreement. which one or which kind of. depending upon the deal: when or where. and having all parties sign it ensures that the parties have.
and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ 6. ________________ 10. ________________ 4. ________________ 8.Name of Negotiation Tactic 1. ________________ 7. ________________ 5. ________________ 9. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 3. ________________ 2.
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The Negotiation Handbook. and J. Getting to Yes: Negotiating Agreement Without Giving In. Maddux. Prospect Heights. References 199 .E. Fisher. Victor. Fisher. 7th ed. 1991. 2nd ed. Gavin. Inc. D. New Jersey: Prentice-Hall. Ury. LittleJohn. Mediation. David. Upper Saddle River. Eshelman. Sharpe. You Can Negotiate Anything. University of Missouri: Columbia Press. New York: Simon and Schuster. Inc. Upper Saddle River. Cleary. Los Altos. New York: Bantam Books. and J. 1980. Inc. Clark. The Essentials of Negotiation. Heavrin. Pocket Negotiator. R. Getting Together: Building Relationships As We Negotiate. 1996. Cohen. Roger. and B. The Relaxation and Stress Reduction Workbook. Inc.: New Harbinger Publications. K. R. New York: M. Lewicki. George. W. Patrick J.. Roger. E. 1999. 1989. and Law. McKay. Inc. W. Brown. Negotiating in the Real World. Irwin. 2nd ed.: Crisp Publications. Minton. New York: Penguin Books. Labor Relations and Collective Bargaining: Cases. M. Domenici. and S. Saunders. 1988. Inc. 2001. C. and M. Inc. Herb. Practice. 2001. Kennedy.: Waveland Press. The Negotiator’s Handbook. M. 1991. J. Calif. 1987. and C. New Jersey: Prentice-Hall. 1997. Fiske. Ill. Fuller. R. M. Chicago: Richard D. Oakland. New York: Penguin Books. and S. 1988. 2004.. New York: Basil Blackwell. Calif.REFERENCES Carrell. Negotiation Skills. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Patton. Gotbaum.
William. Inc. B. George. New York: Bantam Books. G. Bargaining for Advantage. Raiffa. New York: Viking Press. 1991.Nierenberg. Inc. Dudley. New Jersey: PrenticeHall. 1982. Labor Relations in a Global Economy. R. www. Stulberg. Howard. New York: Simon and Schuster.E. Massachusetts: PON Books. Heath and Company. 1994. New York: Penguin Putnam. Cambridge. Gerald I. Getting Past No: Negotiating with Difficult People. The Art and Science of Negotiation. C. Tsogas. The Art of Negotiating. 1987. Upper Saddle River. Thompson. The Mind and Heart of a Negotiator.negotiationsources. Sharpe. Weeks. Inc. 1998. New York: M. Inc. Cambridge. Lectures on Negotiation Analysis. Taking Charge/Managing Conflict. 2001. Ury. L. J. Lexington. 1999. Raiffa. 1996. Shell. Massachusetts: Harvard University Press. The Eight Essential Steps to Conflict Resolution. Massachusetts: D.org 200 50 Practical Negotiation Tactics . 1981. Howard.
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 . Morehead State University. and negotiations. Dr. he was elected to the City of Louisville Board of Aldermen for five terms. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. The Academy of Management Review. Marshall University. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. Business Forum. and served as President of the Board and Mayor Pro-tem for three terms. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. In addition to negotiating numerous litigation settlements and contracts. During his academic career he has received awards for both outstanding research and teaching. Carrell has held academic positions at California State University.D. Human Resource Management. organizational behavior.A. In addition. Carrell are in the fields of collective bargaining and labor relations. The Personnel Administrator.ABOUT THE AUTHORS ichael R. Organizational Behavior and Human Performance. and the University of Louisville. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. Labor Law Journal. M Christina Heavrin J. and MBA and B. in Economics from the University of Louisville. and Public Personnel Management. which is located in the greater Cincinnati area. HR Magazine. Personnel. He received his doctorate from the University of Kentucky. Personnel Journal. The Journal of Accountancy Training. Carrell is Dean of the College of Business at Northern Kentucky University. The University of Nebraska-Omaha. Books published by Dr. Bakersfield.
an agreement between the State of Kentucky. Jefferson County.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. 202 50 Practical Negotiation Tactics . Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. the City and a for-profit hospital for guaranteed indigent health care services for city residents. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Ms. 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.
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