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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
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. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. exactly. few people understand that normal interactions represent bargaining opportunities. Who. at a flea market. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. with family members. • A child wants a new toy now. But if you scored 8 or less. Instead. Unfortunately.negotiator! Pass this book on to someone else who needs it. 4 50 Practical Negotiation Tactics . such as these: • You receive the wrong order at a restaurant. accept what is given. Most readers will no doubt recognize some of these strategies. 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. or engage in an unproductive argument. they pay the sticker price. • A co-worker asks for volunteers for a new project. practical tactics useful in real-life situations at work or at home. with neighbors.
” When you recognize that something can be negotiated. time. Your boss reviews your past year’s performance. 5. Interdependency.• • • • • • • A hotel clerk tells you that your reservation was lost. 4. Your spouse wants to buy new furniture. you must advise the other party of your intention to negotiate. “I’d like Introduction 5 . The parties are interdependent: what one party does affects the other. The parties involved can make a decision by themselves. condition. Decision-making ability. A neighbor wants to remove an old tree on your property line. Each one has the five key characteristics necessary for bargaining: 1. Therefore. A teenager wants to buy his/her first car. 2. In some situations. and I don’t have time to wait for another. In some circumstances. such as price. Two or more sides are involved. There are flexible elements to the situation. Multiple parties. For example. perhaps the employee can say. Mutual goals. What are my alternatives?” During an employee evaluation. A service repair person gives you an estimate on some work. some resolution must be negotiated. Flexibility. perhaps you can say to a hotel clerk. “Well. All of these situations are opportunities to negotiate. A friend is about to select the movie he/she wants everyone else to see. what can you do for me?” Or this to a restaurant manager: “This food order is wrong. since you lost my reservation. Both sides want a settlement. or items of value. 3. one party is only allowed to follow policy or must wait “until the manager arrives. There must be a conflict in the sense that what one wants is not what the other wants. be prepared to bargain. that can be negotiated. and each side can involve one person or several people (each representing one “side” of the issue). The parties involved are interested in reaching a common goal.
Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. the parties and their interests.time to look over this performance review and respond point-by-point. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. Keep this book handy when preparing for any type of negotiation.” To a neighbor you can say. and use the forms in the back to identify the issues. and the tactics that might move the negotiations along. and meet with you again. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. negotiations can be concluded with a written or oral agreement. the facts. 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. You can then use one or more of the tactics presented in this book to achieve the best possible settlement. “I see why you want to cut down the tree. Once a settlement is reached. but I believe it adds value to our house. 6 50 Practical Negotiation Tactics . the other party will realize that you intend to negotiate and do not accept the situation.
Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . etc. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. did you request appropriate compensation? 6.How good are your negotiation skills? Place a check in the box that applies to you. do you routinely negotiate a last add-on before you close the deal? 9. When making a major purchase. or child. do you believe that you negotiated the best possible deal? 4. allowance. The last time you received sub-par service or food in a restaurant. In the past. In the past. but you did not? 8. Do you routinely negotiate for better accommodations when you check into a hotel? 3. Yes No Self-Assessment Quiz 1. When you purchased your last home or car. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. Do you wish you could negotiate a change in your job duties or salary? 7. have you ever required a written agreement covering chores. or division of household duties.? 10. spouse. As a parent. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5.
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the process will probably take several weeks or months as the parties move through all the stages. including those that are less obvious. one for another. the process will be fairly straightforward. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. On the other hand. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. decide how complicated the issue is. etc. The Negotiation Process 9 . state. 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. They’re referred to as “win-win” because each side can achieve their goal. thus allowing each side to achieve one of their goals. If it is a relatively informal situation. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). Examples: • office location (city.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. The “Quick Model” approach outlined below is good for simple negotiations.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation.
The Comprehensive Model Negotiation is more of an art than a science. 10 50 Practical Negotiation Tactics . stages can be combined. Examples: • an item sold by one party and bought by the other • wage increases won by one side. rearranged. or even skipped altogether. the other side loses. but feel free to try them when they seem most appropriate to your specific circumstance. Depending on the situation and the parties involved. What one side gains.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book.
Information. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time.
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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.
as a last resort. Conclusion Selling their business was the Jaggers’ BATNA. The union is demanding wage and benefit increases. They learned that their assets would be easy to sell and were worth more than originally estimated. The owners. 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. and it now employs 230 craftsmen. notified all the employees of their intentions. but rather what the buyer planned to do with the car. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. For the past two months.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. as Harvey had for many years. In this case. inventory. The union negotiators thought the Jaggers were bluffing. The union negotiators convinced the employees that this too. and equipment. With only two weeks remaining before a threatened strike. The $56 million dollar business took them 30 years to grow. was a power play. providing them with a very good income for life. 16 50 Practical Negotiation Tactics . 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 final offer. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it.” which was refused. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. When negotiations with the union became hopeless. his BATNA was not to hold out for more money. selling became an attractive alternative to a strike or prolonged battle. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. The threatened strike became a reality. the Jaggers decided to seek buyers for their land. best.
what the other party’s desired outcome is. so Tom was surprised when John called him out of the blue one day with a proposal. A person who has to sell her home because her company is relocating her. I’ve been thinking of getting rid of it for a while. Gosh. you still interested in my rifle? Of course. Are you finally ready to sell it? Yes. I’ll have to think about that. it’s still perfect. How much are you thinking it’s worth? John: Well. I think so. Preparation 17 . because if the company does not provide relocation benefits. John: Tom: John: Tom: Tom. John assured Tom that this would never happen. sure. I guess I couldn’t take less than $20. it’s to your advantage to know what is behind a seller’s decision to put it on the market. 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.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. might not be willing to lower her asking price because she knows that her company has agreed to buy the house if she can’t sell it. If you are the party making the offer on the house. right? John: Sure.000. for example. Example 1 Tom had always admired John’s 1861 Confederate rifle. What changed your mind about getting rid of it? It is still in perfect condition. Tom: $20. Make me an offer. It is extremely rare—one of only 100 made with that bore and handle. she might have to take a lower offer just to be able to move. This is a good thing to know. at some point. Just as important is the why. you know. Just running out of space. and told John several times to let him know if he ever wanted to get rid of it.000? That’s more than I planned.
let’s do it. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years.Tom: Okay. parties to a negotiation are not likely to reach agreement. Without some trust. we really want to buy your company. I’ve been thinking about your offer. I don’t think I can go higher than $18.000. BigManu: Rick. When Tom found out why John decided to sell his rifle. and now the two-year requirement has become a stumbling block in the negotiations. Well. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. fearing that this will put all of his employees out of work. but thought this might explain John’s sudden interest in selling the rifle. Conclusion Tom entered into the negotiations suspicious of John’s motives. No longer worried about John’s motives. Was Tom interested? Tom declined. The sale price for the company has not yet been agreed to. Tom now felt comfortable negotiating the price. but I could get the money to you right away. He is two years away from retiring and does not want his business to fail before he does. has begun negotiations to sell his firm to BigManu Company. we 18 50 Practical Negotiation Tactics . Example 2 Rick.) Tom: John.500 had an 1861 for sale. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. John: Well. it made the negotiations easier. Rick needs to remain president of the company for the next two years. However. but then he will be happy to retire. and we’re committed to keeping it open as a major division of our company. Tom: Okay. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. if you could come up a little—say $18. the owner of a small manufacturing company. let me think about it and I’ll get back to you.500—we’d have a deal.
let’s talk about the job guarantee you wanted. I just want them to have a real chance to show you how good they are. I need to give them some sense of comfort if this deal goes through. BigManu: We just don’t see a way to give you what you want on this. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. I just can’t go through with this sale. Without this commitment. and I hired every one of these people.cannot guarantee to you that ALL of your employees will be retained for two years. and we think it’s an odd request anyway. We still can’t find a way to do it. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. they decided to put their price on the table and revisit the issue after a price was agreed upon. Rick: These people are the best at what they do. my employees will prove to you that they are uniquely able to run this place. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. In hopes of pushing the deal forward. and he accepted it subject to agreement on the two-year employment guarantee clause. I just don’t want it to change after I’m gone. you will have a say in how the employees are treated. Preparation 19 . Within the parameters of efficiency and effectiveness. The price they gave Rick was actually more than he had expected. Working as a division of your company. BigManu: You know we want you to stay on and manage this division for us. Let’s talk later.) BigManu: Okay. We just can’t make good operational decisions with our hands tied. (Between negotiating sessions. You’ll be in place to participate in our employment decisions. Rick: I built this business from the ground up.
would it? Rick: Well. you’ll have a guaranteed “in” to protect your people. 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. Conclusion By masking his real objective (giving himself two more years as president before retiring). to tell you the truth. Rich almost lost the deal. This wouldn’t have anything to do with your own plans for the future. Let me get back to you. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. that might work. but we won’t be completely tied to operations as they are now. Rick: Well. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. I certainly want to do all I can until then to protect my people. I’m hoping to retire in two years. 20 50 Practical Negotiation Tactics .
they have the information they need at their fingertips.) Let’s take all our Beanie Babies to my house to trade! Okay. Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. they control the breaks and environmental factors. Make up your minds. such as a hotel conference room.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. and so on. (thirty minutes later) Bailey: So. the frog is everybody’s favorite.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. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. Bailey: Cybil: Preparation 21 . too. girls. it’s a deal. Mother: Hush. 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. I like the frog. and go play somewhere! Cybil: Well … Okay. (Think of the showroom tactics used by car dealers. Cybil.
Team B had clearly used its home turf to gain a substantial advantage. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. That’s why she wanted to go to her house. They were blamed for accepting the same deal that had been rejected only days earlier. 22 50 Practical Negotiation Tactics . Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. until we have a settlement.Conclusion Bailey. The firm deadline was only four days away. Team A agreed to a settlement almost identical to the one rejected days before. Team B. Both sides desperately needed to settle a property dispute. The physical and emotional demands of 24-hour. Team A was whipped physically and emotionally. having set up beds. although only ten years old. non-stop negotiations wore down the members of Team A. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. About thirty-six hours later. After forty hours of negotiating. and other conveniences in the adjoining room. When negotiations resumed in two months over another piece of property. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. as long as they met in the boardroom of Team B. was still going strong.” The chief negotiator for Team B agreed. meals. Team A agreed to change the meeting place. not one member of Team A was chosen to return to the table. in their own familiar setting. around the clock. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. while members of Team B were able to stay fresh.
Larry had expected to pay him for his time. After all.” This can hold up an agreement and cost you in the end. though. I anticipated much less work. about your bill. I would have charged anyone else much more. Will is a licensed plumber. Larry: Well. If you think that the other party knows more than you do. and he and Larry have always gotten along. Larry was thrilled. and show them the actual work that got done. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. Larry: Just make sure you’re comparing apples to apples. I was kind of surprised at how high it was. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. Let’s get the guys back in who gave you estimates. Things turned sour. 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. it became clear that all of those pipes had to be pulled and new ones put in. but was shocked at the amount of the bill. rather than give them the “advantage. This uncomfortable negotiation followed: Larry: Will. When you first told me about your project. Believe me. Will: Larry. When we got into it. I gave you my “family” rate. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. based on objective criteria (think property appraisals in real estate).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 Will presented Larry with his bill. If they tell us that they either Preparation 23 . Larry: But Will. and they were much lower than this. I did get some estimates from plumbers.
he used his financial expertise to analyze the investments of the college’s endowment fund. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. and no one had ever questioned her performance. she had been investing the college’s endowment funds for many years. From a look at the portfolio. they had to agree that their early estimates were low. Conclusion When the other plumbers looked at the work. 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 said. 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. Had they actually prepared bids on the work. I certainly didn’t mean to offend you. they would have had to revise the figures. The estimates would have been higher than what cousin Will charged. Larry: That sounds fair. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. because (as Will pointed out) it wasn’t an apples-to-apples comparison. I’ll revise my bill to meet the lowest estimate you get. while she wasn’t an expert. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . The college’s budget officer was understandably offended. 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. and decided to bring the matter up at a Board meeting. Budget Officer: I don’t know what your problem is. Example 2 After Stuart was appointed to the college’s Board of Trustees. Comparing the estimates to Will’s actual costs would have been counterproductive.
I find that a more aggressive investment strategy produces a better return. but I think they more than offset the gains. 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. but we can ask them to plan and cost out each move. but some of these stocks have really lost their value. then you and I can talk about changing our investment strategy. As you know. but such a strategy also increases risk and costs more money to administer. and its resources are limited. Stuart: Yes. because she did not have the background in investments necessary to trust such advice. I don’t want you directing how they’re going to go. I don’t question that they were sound at one time. considering commissions and all. Okay? Budget Officer: Okay. there might be increased risk and some expenses for commissions. I have a suggestion. Now. the college is a private institution. Stuart: No problem. At the end of two months.were stale. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. Preparation 25 . 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. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. In this situation. but I want to be involved in the discussions with them about what we’re asking. if both of them demonstrate a similar strategy and produce better results after expenses. Budget Officer: Yes. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated.
Once you both agree on the list of things to be negotiated. not just an allowance increase! There is: (1) a $10 increase. a sixteen-year-old who lives with her parents and three younger sisters. baby-sit your sisters. It will cost me more than $10—about $35 per week. Example 1 Shari.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. cut the grass. and ask the other party to add to the list. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. has asked her mother for a $10/week increase in her allowance. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . (3) more chores. Shari: Well. (2) a later curfew. Shari: I’m four years older than the next-oldest. not on what you want to spend. Mother: But your allowance is based on what you earn in your weekly chores. if I give you an increase. You can’t treat me the same! Mother: Well—so we’re talking about several issues. I need more money for clothes and CDs. Mother: That’s a large increase—and we just raised it last year! Shari: Well. wash the cars. and for going out with my friends. clean the whole house—should I continue? Shari: Whoa! I want to stay out longer—past my curfew of 10:00—not work more! Mother: Well. This strategy can build trust in the negotiation process itself. your little sisters will want equal treatment. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. what else can I do.
Shari: Right! Mother: So … I suggest no allowance increase. opens by proposing the list of items. was avoided. while your Dad and I go out. Now it is time for each side to list their desired outcome for each item. I’ll pay you $10 to babysit every Wednesday night. and item #23 (the wellness program voucher). but unlike your sisters. An allowance increase. item #11 (the clothing allowance). Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). 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. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. Shari got the $10 she wanted and a later curfew. Now we have a package deal to propose … Preparation 27 . The union’s chief negotiator. since all of their items were included as requested. in the first session. while the mother won a Saturday house-cleaning and a night out each week. which the other children would have requested as well. Management agrees. if you agree to our proposals on item #3 (the paid vacation schedule). Then a “win-win” solution could be determined. And if you clean the whole house on Saturday. The trading of items (where initial demands are discussed and agreed upon) begins.
Conclusion In most labor negotiations. the two sides will at this point sign and date the list of proposed items. other trade-offs are proposed and agreed to until only a few items remain. Then negotiations can resume on the remaining 43 items. 28 50 Practical Negotiation Tactics . thus removing them from the discussion table.
000? No. day. Bob followed the man home. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. 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. One day.) Preparation 29 . That’s a generous offer. say. just out of curiosity. I love this car—restored it myself. (For the next three years. Not even for. which turned out to be only a few blocks from his own house. Prepare carefully. time of day. and general circumstances under which negotiations take place can substantially impact the outcome. Would you possibly be interested in selling it? No.Tactic 6: Timing Is Everything The exact month. he saw an elderly man get in his dream car and drive away. One day. and do your homework. he noticed a FOR SALE sign in the yard. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. I live a few blocks from here. He stopped and knocked on the door. As the man got out of his car. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. on Briarwood Road. my name is Bob Hillard. thanks. It was nice meeting you. as he left the supermarket. but money doesn’t mean anything to me at this point in my life … Well. Bob made it a point about once a month to go out of his way and drive by the man’s house. $12.
if a seventh vote could not be found by the pro-agreement side. Example 2 It was Sunday. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. The board members had met twice before. Then it’s a deal? Yes.m. 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. Follow me. that’s a fair price. as a matter of fact. and the vote was a 6-6 tie each time. The partner organization. I’m moving to California to live with my daughter. the proposal would die at midnight. I’ll see you on Monday. had issued a deadline of December 31st. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well.000. for tax reasons. I can’t take it with me. and I promise to take good care of it. (after a careful inspection) It’s a very nice car! I’ll give you $12. A third vote at 3:00 p. resulted in another 6-6 30 50 Practical Negotiation Tactics . beyond which the project would have to be abandoned. Can you come back on Monday at 10:00 a.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. December 31st. Well. A majority was needed to pass the partnership agreement. Can I see it? Sure. to seal the agreement at the courthouse? Sure. so I guess I will be selling it. Conclusion While Bob did not achieve his goal during his first negotiation effort.m.
For weeks.deadlock. 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. Preparation 31 . timing was everything. The measure passed 6–5 at 5:45 p. Both sides caucused: The leaders on each side met to negotiate a compromise. and it worked.... A member of the pro-project group quickly called for a vote after the leader gave a signal. the project had been stalled by 6–6 votes. That effort failed. At 5:30 p.m. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. a member of the anti-project group left the room. When the meeting resumed at 4:00 p. as predicted. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.m.m.m. Then. He planned for it accordingly. and the meeting was adjourned.. in the end. during an hour break in the meeting.
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Some of the tactics listed in this book are only suitable for single-session negotiations. and Tactic #48 (Walk Away). you must first evaluate your needs and those of your opponent. uncaring approach (Tactic #9: Control Your Emotions. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). Identify all outside influences and hidden agendas before you develop your strategy. 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. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. Are there any outside people who might influence the process. such as a buyer and a seller or a city and its union. Third parties sometimes have their own hidden agendas. Be sure you are aware of this at the beginning. if you want to begin in a friendly. a third party can serve as a mediator (a legislative body. Tactic #12: Find Common Interests can be helpful. If you prefer to take a firm and direct approach. After you have evaluated these factors. might step in and help settle negotiations between a union and administration negotiators. as well as their bargaining history and financial and political positions. such as a third-party negotiator. Before you can do this. Tactic #33 (Bluff). as it can substantially alter the negotiations between two primary parties. but in practice it will likely influence the whole process. 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 . decide whether the negotiations should be continuous. A neutral. The overall strategy chosen does not limit the use of other tactics. For example. such as Tactic #19 (Make a First and Best Offer). 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.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. for example. In some cases. or one-time-only. Tactic #43 (Nickel and Diming). cooperative manner.
” The agent took the offer to the seller. His teenage sons had “trashed” the house. but the inside was a complete turnoff. with “All right. Weeks later. If there is a significant weakness in your position. “Please make any offer—they are motivated!” The buyer responded. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). The buyer said he wasn’t interested. half-serious. let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. I offer half the asking price. The agent explained that the seller was desperate. By assuming opposing roles. For example. The desperate owner agreed. 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). The buyer loved the location.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. and the buyer was able to completely renovate the house and still have a great deal. 34 50 Practical Negotiation Tactics . two people on the team will be more successful because they evoke different emotions from the other side. the seller’s agent called the buyer about the property.
Carol: Maybe not. as well. so do not underestimate what you might be able to achieve. six years ago you bought it for $60. we think $160. And I don’t see a lot of difference in the neighborhood. and then look at the demand from your opponent’s perspective. Planning a Strategy 35 . You are not likely to get more than you request. Your demand should be high enough to give you room to compromise.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. Buyer: The air conditioning might have increased the value of the house. Buyer: We really like the house. Surely there’s some flexibility in your asking price. but the house has increased in value. After all. your request must not be so low that the other party concludes that you are not negotiating in good faith. and just refuses to reduce it. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. Carol wants $160. It’s a good neighborhood.000 is very high. Be realistic. so think this through well ahead of time. but we simply can’t take less than $160. If you consider the demand ridiculous.000. Carol: We really want to sell. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. but the redecorating is of little value. First. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. Anyone buying the house would want to change wall colors or add new carpets. but quite frankly. but not so high as to end the negotiations before they begin. Each time. with no success. one buyer shows some interest. She has had it on and off the market for the last five years. Finally. We also think that the neighborhood has improved over the last few years. The market hasn’t gone up that much in six years. However.000.000. but certainly not exceptional in any way. it is likely that your opponent will.
the founders of the firm. The partners are interested in selling the name. 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. Inquiries to other law firms were not very helpful because in almost all of the instances.000 offer by coming down in price at least a little. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. the buyer took it as a signal that either Carol didn’t want to sell. In any event. The other law firm was prepared to pay $100. were still alive.000. Carol drove off a potential buyer by setting an asking price that was just too high. Here’s how the initial negotiations went: Partners: Well.Buyer: What if we offered you $100.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. but they have no idea what the value of their firm’s name might be in this nearby city. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. we are certainly interested in your request to “buy” our firm name to use in your city. and then $10. We’re curious. When Carol refused to budge.000 immediately. as to how you think the name is going to benefit you. or she has unreal expectations. 36 50 Practical Negotiation Tactics . Neither Edward Bits nor Edmund Bites. 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. though. enjoying a statewide reputation for quality representation. Example 2 The law firm of Bits & Bites was a Sioux City institution.000? Carol: We really can’t take less than $160.
So. I guess this is just not something we’ll be able to pursue. we do. (concerned about loosing the opportunity) Wait. To offer it now would be an insult. We weren’t really thinking about that amount of money. we want $500. And we. Well. then. Yes. that you anticipate to build a very profitable law firm. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . What number were you thinking about? Well.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. We should assume. that is a very high number. because we were not even close to that number. one of these two attorneys carries the surname of the firm they are leaving. it would be impossible to create a new name out of the names of our key partners. starting with the ten partners you describe. Give us some range. and then 10% of your profits each year for as long as you use the name. expect to pay for that. we reserve the right to withdraw our permission. If at any time we feel that you have “harmed” our name. that’s just our initial figure. Using the Bits & Bites name can only enhance our profitability. And even though you don’t have an office in our city. I’m kind of embarrassed now. We probably won’t be insulted. you have a very solid reputation there. (surprised) Well. of course.000 initially. Thanks so much for meeting with me. but we get to keep all of the money we’ve received up to that point. Let’s just pretend this didn’t happen. because you are in the state capital and your firm has handled a lot of high-profile political cases. In every instance. I really don’t feel comfortable doing that now.
In this situation. since they had initiated the contact. It immediately dropped the idea.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. because there was no “objective” criteria available to help them set a reasonable price. The price they were willing to pay would have indicated what the naming rights were worth. Both parties were probably at a disadvantage. rather than negotiate. Either side could have asked for too much. 38 50 Practical Negotiation Tactics . Bits and Bites should have let the prospective firm make the first offer.
200. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. you’re really moving! I hate to see you leave. Andy and Paula: Yes. Andy: No.400 if the catcher and can are included. angry. what’s your price? Andy: $1. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. Peggy: I assumed they went with the mower. only three years ago. Example 1 So. Andy: I want them… Paula: Go ahead and take them. and I know how you take care of things. while another acts difficult. Peggy: Planning a Strategy 39 . I want to keep those. Peggy. Andy and Paula. since they are sitting out in the driveway with it. etc. They cost about $300. And take the leaf-catcher attachment and the gas can. I can use them. Andy: No. (bad guy) and implies that his or her side will hold firm on their demands. Peggy: So. Peggy: I’m hearing one thing from Paula and another from Andy.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. not for $1. Half what it cost us new. Peggy: That’s fair.200! We should get $1. I’ll go home and you can call me if you two can reach an agreement. we won’t need it at the new condo. Paula: Go ahead and ride it home. I heard that you want to sell your riding mower. I don’t know what the deal is now. so I’ll take it. threatening.
the quality of the technicians’ work. For the past three years. we’ve been fairly happy with your responsiveness. Sandy. we’re here to negotiate a new service agreement. And cut the training hours from 55 to 20. Let’s talk. Sandy. You are located outside our primary service area.000 in service calls last year alone because your damn people don’t take care of the equipment. And we need to add a clause that holds your company responsible for machine damages.000 per month is one of the highest in town. causing our reps to spend hours on the road. Miguel: I’ve figured $4. We estimated that it has cost us more than $50. Miguel: Well. Miguel: But not at this ridiculous rate. your rate of $3. 40 50 Practical Negotiation Tactics .200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. She realized that it put her in an impossible negotiating position. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). your account has taken too much time. She very wisely recognized the routine and forced Andy and Paula to give her a clear. and your training programs. Liz: But we still want to renew your contract. perhaps even unintentionally. firm offer if they decided to continue negotiations. And we want to change the 24-hour service response time to 48 hours. Sandy: What? First of all.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine.
Liz. Sandy. I want to keep you as a customer. If not. but Miguel’s right. I’ll stop back about 2:00 p. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. (Three hours later) I’m back. even though it was far above the previous contract. Our customer base has grown. Sandy. Miguel! We’ve worked out a deal I think you can live with. I hope you can meet my terms. Any luck. Planning a Strategy 41 . Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent.m. I’m going on to lunch.Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. you two? Good news. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. with a position he knew was unreasonable. Sandy. these terms will put me out of business—I’m a small 20-person operation. I’m afraid our relationship is over. I’ll explain on the way back to the office. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region.
he was very unhappy. So. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. The fault was partly his because he did not stay on top of changes. How may I help you? Hello. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. 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. 42 50 Practical Negotiation Tactics . It seems that the rate you are charging me on my home phone is $1. but I recently was sold a $. such as deals on computer packages and phone services. because we have had a sick relative out of town and we used long distance a lot this past month. 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. 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. 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. in fact. He decided that the best approach was to act indignant when he spoke to the company representative. and might even harden your opponent into an unfavorable position (for you or for both of you).10 a minute rate at my office location. This will put you at a distinct disadvantage from this point on.Tactic 9: Control Your Emotions Stay cool. made some very good purchase decisions for his small business. He had. I noticed this.00 a minute. I have a problem with my recent bill and my billing rate.
Customer representative: Let me pull up your account. But I am able to offer you a $. Mike. we certainly would have discussed your options. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . to begin now. 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. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. I would think you would have given me the best rate you offer new customers. but this was quite a shock.10 per minute rate on your long-distance service. of course it is not always possible to give existing customers some of the “offers” we have out.I expected the bill to be higher than usual. Well. Had you brought this to our attention before. 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. I realize that that might be the rate I started paying when I first took your service over eight years ago. (beginning to sound irritated. But as a very good customer of yours. I would have known I was paying too much. 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.
either. and I want to speak to someone in authority so I can terminate my service. But I’m looking at a $500 longdistance bill.Mike: I would imagine so. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. between controlled. but I can’t do that. don’t think this is directed at you personally. He was walking a thin line. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. In doing so. 44 50 Practical Negotiation Tactics . Wait—I’ll get my supervisor.10 per minute. which should rightly be $50. If you can’t get me someone to talk to. and I should be treated with more respect! I’m sorry. I … (interrupting and in a stern. Mike’s willingness to show a measured “flare of temper” brought results. a long-time customer of your company. there’s no reason for this conversation to continue. I am. after all. however. The best we can do is fix the rate for the future. strategic anger and abusive behavior. she kept Mike as a residential customer as well as a business customer. controlled voice) I need to talk to someone who can do it immediately. but I am very angry with Over-the-Air Company. The latter would not have produced the desired results. (with a much angrier tone) Madam. 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.
and you just can’t be too careful. The owner told the employees that he was worried that during the overtime shifts. and it’s not what we’re even talking about. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . Owner: Now. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. On those overtime shifts. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. 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. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. that’s just not fair. they would become dissatisfied with their pay and want their base pay increased. and it’s getting old. 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.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. Working with fireworks is working with explosives. and that they should be asking for a fairer base wage for the work they do for you. They will be putting the plant AND their fellow workers at risk by not being here. I’ve got to have the employees with the most experience to protect this place.
What if we were to agree that the senior employees could refuse half of the overtime offered to them. the negotiator would have had to find a way back into the negotiations without losing ground. or they’re not. In practice. Until you’re ready to talk about that. I’m not coming back. most of them continued to take all the overtime they could get. sit down. Sit down.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. either the employees are properly trained. After the employees’ negotiator threatened to walk out. don’t be so hasty. The safety of the plant demands it! (standing up to leave) This is just ridiculous.) Now. Then you can’t have it both ways. Either they are properly protected. he became more reasonable. (He begins to walk out. or they’re not. not at all. now. But the fireworks business is a business that involves risk. Had the owner let him leave. The negotiator was also running a risk with his flare of temper. But we protect our people. That’s all. 46 50 Practical Negotiation Tactics . You are not addressing the real issue for you: money. but not all? Conclusion The owner was on shaky ground with this one. No one who takes a job with us can be unaware of that. All I’m saying is that the most-senior employees have to be on the overtime shifts. The end result was that the most-senior employees did win the right to refuse overtime. though.
The first party decides on a price for which he or she will either buy or sell the object to the second party. Mike: Mary Anne. you’re the oldest. A fourth option. and split the proceeds. All the rest of the estate has been divided among the family. the executor of the estate. since this one is in perfect shape and it was Mother’s. Then Susan. called the “Reciprocal Buy-Sell Offer. Susan. The second party then decides to either buy it at that price and pay the first party.” is the recommendation of Howard Raiffa. with winner taking all. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. However. I’m willing to pay or let it go for $800. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. I’ll give you 48 hours to decide the price. Planning a Strategy 47 . Mike. 2) They can flip a coin. with the highest bidder paying the amount to the other side in compensation for their loss. so you set a price at which you agree to buy or sell the coffee grinder. Both sisters covet it.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. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. 3) They can agree to sell the object to a third party. a well-known negotiations professor from Harvard University. (two days later) Mary Anne: Well. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder).
which will bind us to the outcome. (sixty days later) 48 50 Practical Negotiation Tactics . the lower bidder must agree to sell his half-interest to the higher bidder at a price that evenly splits the difference between the two bids. Lectures on Negotiation Analysis. You will both agree. Both came to Raiffa to help negotiate a settlement. They accepted his suggestion to use the “reciprocal buy-sell strategy. in writing. I’ll pick it up tonight. Both sisters felt that the process enabled them to resolve the issue fairly. They thus were able to determine the highest price each was willing to pay for it or receive for it. Two business partners had been working together for ten years to build a successful business. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. Thanks for making this last step as easy as possible. After I open the bids. Here is my check for $800.Susan: Mike: Well. I choose to buy it. I suggest a slight modification to the process. to submit a sealed offer to buy/sell the business sixty days from today. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). and then decide how much more “emotional value” it held. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder.” Howard: Since in this case you are talking about a multi-million-dollar business.
Bobby. Conclusion Both parties wanted to keep the business. you agree to sell your half-interest to Bobby for $180 million. and we close by July 1st. but only if they could become the sole owner. Agreed. Bobby was willing to pay more than Abe to remain sole owner. Planning a Strategy 49 . The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. I will arrange to sell him my half-interest for $180 million. Abe. And I will arrange financing to pay you $180 million to become sole owner. 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. your bid is $170 million. and to close within ninety days.Howard: Abe: Bobby: Abe. your bid is $190 million.
” and then argue for the frugal alternative. Based on seating capacity. he decided upon a strategy: First establish himself as the “dimension expert. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. The husband found the dimensions of the couches in the brochures and Web sites. and created a spreadsheet to compare the five best-rated couches on their list. The couple decided to limit their selection to those rated “excellent. and forcing him or her to control the discussion of the issue. and the husband felt like he saved them hundreds of dollars. This approach can also be reversed: The wife in this situation is a banker. Conclusion The husband became the “expert” in this situation by doing the homework. When it came to comfort. It can also work in reverse: establishing the other person as the expert. He thus ended up having greater negotiating power. This strategy worked. When he showed his wife the detailed spreadsheet. They both expressed an interest in finding a couch that offered the most “interior” space. she glanced at it and immediately deferred to his opinion.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. the one he wanted (one of the least-expensive) was superior. Looking at these statistics. the one that was the most expensive was superior. so when the husband wants them to make an 50 50 Practical Negotiation Tactics .” but there were substantial differences in price—differences that the wife did not see as a problem. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. The wife was determined to buy the least-expensive brand rated excellent by consumer publications.
” If you spend many hours learning about Health Maintenance Organizations (HMOs). 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 argues that she is the expert. Preferred Provider Organizations (PPOs). and should therefore handle the problem.investment decision or deal with an error in a bill. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. you gain an edge when negotiating a new plan for your company.
I missed dessert the other night because I had to get to baseball practice. and then asked their mom for a chance to negotiate with each other. the last piece of cake will get thrown away. When they boys returned. That simply rewards your continual squabbling. Russ: 52 50 Practical Negotiation Tactics . you both want to complete negotiations by a certain date. Usually. and I really love the banana/butternut/ sour cream frosting on this cake.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. Unless you can convince me otherwise. like we usually have. and so on. Be clear on what you have in common at the start. Example 1 When Russ and Bill got home from school. If this was chocolate icing. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. and neither boy was very happy. neither of you want to be embarrassed at the outcome. particularly when things seem to be at a standstill. This time. you want to reach an agreement that is favorable to an outside party. These positive things are part of your goals and objectives. The boys quickly huddled. here’s what they said to her: I think I should be rewarded with the piece of cake. I also took out the garbage last week without being asked twice. and their mother was tired of it. The two boys fought over the last piece of everything. because I am so conscientious about my paper route. she decided to try something different. They immediately began to fight over it. point them out at the very beginning of negotiations and refer to them throughout the process. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. she made them share whatever it was. they saw that there was one piece of cake left over from their mom’s bridge party. I wouldn’t care so much.
and her children were in school. Residents: Marilyn. That sounds like a wonderful solution. We really want you to go back to your original times. Now that her children are in college. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. so these hours worked out well.m. Customers have started to park in nearby apartment lots.m. and that’s not my favorite either. 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. We realized that if we cut the cake lengthwise. One day. and keeps it open longer so she can attract customers on their way to and from work. Marilyn originally set her shop’s hours for 10:00 a. she got a visit from some of the residents. 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.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. This cake is white cake. and better than a fast-food restaurant with late-night hours and a drive-through window. and I really like white cake. It was the type of shop the nearby residents preferred. I can have the part with the icing and Bill can have the part with the cake and filling. your new shop hours have caused your customers to park in our parking spaces. she opens her shop at 7:30 a. I helped with the bags without being asked twice.m. because there is no parking along the street during morning and evening rush hours. Planning a Strategy 53 . to 3:00 p. The last cake we had was chocolate cake. so that your customers can park on the street.
then we’ll try and accommodate you. Most of our residents are gone by 8:00 a. and I close at 4:00 p. Can’t you post signs that tell non-residents not to park in the lots? Residents: The problem is that for the signs to be very effective. Marilyn: Conclusion Marilyn needed the extra parking.m. rather than after work. the off-street lots probably won’t be used by my customers. The shared parking arrangement did work out for Marilyn. let’s see what the options are. Identifying their shared interests caused the nearby residents and the customers to reach agreement. I don’t think that would be very good for business. 54 50 Practical Negotiation Tactics . And we don’t think you want your customers’ cars towed.m. if I go ahead and open the shop at 7:30 a. I have to convince them to come before work. and between 4:00 p. Do you? Marilyn: No. We think they’ll be agreeable to the morning parking. But I really am increasing my sales by being open longer hours. if residents haven’t left for work yet. It is very costly to have cars towed.m. Okay.m. So. and the residents needed Marilyn’s shop.. The parking lot used for apartment residents is probably full from 7:30– 9. Lets try it.m. I really need that extra income to stay in business. my customers can’t park on the street..m.m. Between 7:30 a. If you need to have the shop open more hours. 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. and is probably empty in the afternoon if they haven’t gotten home yet. and see if it works. But in order to keep my new customers. we have to be willing to tow the cars that violate it. and 9:00 a.00 a. and usually the car is gone by the time a tow truck shows up anyway.m.I’m sorry this is happening.m.? Residents: We certainly want you to stay in business here. and 9:00 a.m.. or so anyway. and 6:00 p.
That will take days! I haven’t been in this house for twelve years. We just don’t have the time … We’ve got to do this—the house is sold! Okay. A deadline can help you make the best possible agreement in the shortest amount of time. Well. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests). let’s all take a few hours to look around. 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. Then we can sit down at this table at 3:00 p.m. I don’t. How can I do that? You all live in this town and you know this house. let’s all take two hours to look around and make a list of things we might want. A few hours? I can’t—I’ve got to leave shortly for the drive home. the first. and start choosing things. Example 1 Four adult children have gathered at the home of their recently deceased mother. one at a time: the youngest. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. how should we go about dividing up the furniture and possessions? I can’t talk about it. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. etc. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. we can each take turns selecting things … Like each tool or dish. But at Planning a Strategy 55 . Well.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations.
Okay. David: I understand your concern. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. and I appreciate your interest in the historic structure. this is December 29. And besides. your attorneys know the tax laws. if we are not finished. Example 2 Allan: As the negotiating team for the city. However. Sue. 56 50 Practical Negotiation Tactics .m. 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. All of us must come back before Saturday to take what is ours—agreed? Okay. if I cannot carry a negotiated and signed deal to my board by noon on December 31. can sell or give away what is left. Agreed. Allan: Let me confer with the city attorneys. December 31..Sue: Mary: Jenny: 5:00 p. being the oldest. we all leave. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight.
) I understand the December 31 deadline. Let’s continue. we can’t get the reports we wanted in 48 hours.Allan: (One hour later. Obviously. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Planning a Strategy 57 . and I don’t like it. Conclusion Knowing the external deadline gave David a significant negotiating edge.
He decided to preempt the discussion in order to make the best deal. and you can neutralize its effect on the negotiations. We had one at the beginning of the semester that we were using pretty often. Did you buy it? Jason: Yes. Then the teacher went back to the first one. Mom: I gave you money to buy a workbook a few weeks ago. before your opponent tries to catch you off-guard. Mom: What’s that? Jason: A few weeks ago I lost my workbook. One day mine disappeared. The objective is to negotiate from a position of strength. Now. I bought the second one. He knows that a D will mean that he will have to change the way he studies.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. 58 50 Practical Negotiation Tactics . as well as strengths. and I missed some assignments. Have a clear goal in mind AND all the information you need to make your points. first-quarter grades are coming out at the end of the week. But don’t lose it again. Unfortunately. and Jason knows he is getting a D in Spanish. but that was actually a different workbook. don’t get mad. Mom: All right. we need to talk. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. His mother disapproves of his study habits. but I have a problem in my Spanish class. and one of the ways to do that is to reveal a weakness at the beginning. so he was able to prevail upon her to let him continue. There will be times during a negotiation when you will want to catch your opponent off-guard. as well as those of the other side. and we used it a couple of times. but his grades are good. Control the use of the information. I’ll give you money for it. and this usually means having all the right information. but remember that both sides have weaknesses. while watching TV. Jason: Mom. I’ll need to buy it again.
I think I can do that. It’s because I didn’t have the book. Mom. and since he offered her the information up front. 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. then I’ll agree to make changes. And those are hard classes—Algebra. Pizza Boy was interested and had even made inquiries about the property. B. she trusted it more. Thanks. Its owners found out that at least three other buyers had been in contact with Jane. 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. The work I did turn in was fine. or borderline B. Obviously. all right. His explanation made sense. Since I missed some assignments. The location was ideal for a convenience store or a fast-food restaurant. And I know I have to be better about getting in all of my assignments. I’ll give you more time. and the D is directly related to my losing the book. Although his Spanish grade was only a C+. If I don’t pull the D up to a C or better. But that Spanish grade needs to come up to a B!! Jason: Okay. Example 2 Jane once owned a piece of property she wanted very much to sell. but all three deals Planning a Strategy 59 . English. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. Environmental Science. he was able to continue to study the way he wanted to. so there’s no reason to think I need to change my study habits.Jason: Another thing. Jason: Spanish is just one class.(maybe C+). but I think you do need to change your study habits. Mom: Well. All of my other classes are A. I don’t think you’re taking your schoolwork seriously enough. my study habits are okay. Conclusion All of Jason’s grades did improve over the next quarter.
had fallen through. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. the other interested buyers already have businesses in the neighborhood. she started her campaign to keep them from closing the deal. They decided not to fight a disgruntled neighbor. and was able to politely ignore her. Pizza Boy: We’ve checked the property out. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. either. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. Pizza Boy: Well. Jane: Oh. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. When the neighbor heard about the new buyer. however. let’s assume that you are right. I think you’ll find that this is only one person. though. You are a big enough corporation to withstand her objections. really. since they were well aware of the negatives. Furthermore. But unlike your company. I know. Pizza Boy: Well. What are you asking for the property? Conclusion Jane told them her asking price. What are her grounds for complaining? Jane: She doesn’t have any. Pizza Boy was prepared for her call. I’m sure. she will want you to think it’s the whole neighborhood. The real problem. however. Actually. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. This is how the negotiations went: Jane: Pizza Boy. A tentative deal was signed. it’s only the neighbor to the right of the property who has a problem. When she contacts you. 60 50 Practical Negotiation Tactics . there were no unpleasant surprises to stop the deal. we’re not interested in neighborhood fights. I’m very happy you’re interested in my property. which was way below the price they were actually willing to pay. and it’s zoned for commercial use.
“Distributive” bargaining (“win-lose” or “zero sum”) is used.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. Another common strategy is to start with the status quo. quick agreement.500) Fig. for example.000) Target Point ($23. 2: Distributive Bargaining Process. by Michael R.000 22 23 24 25 26 27 Initial Offer $28.500) Resistance Point ($25. (2004). Carrell and Christina Heavrin.750–$25. such as proposing to continue at the current rate or price. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse.000) Settlement Range ($22. The negotiator firmly states that it is their best offer in an attempt to gain a nice. as illustrated in the following figure: Seller Resistance Point ($22. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).500) M $21. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.750) Target Point ($24. None is as important as the first one. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. 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. 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.000 Buyer Initial Offer ($21. This is a practical starting point that will not anger the other side (and might even be expected). Exchanging Initial Offers 61 . 190–192. Adapted from Labor Relations and Collective Bargaining.
The settlement range is the distance between the resistance points. usually.” but the settlement price.In this example. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). these points have set the outer limits. thus starting out on a positive note. it is termed the settlement point – not the “right price” or “fair price. if the buyer’s initial offer was $25.000) is reasonable.000. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. 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). the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. the other side does not agree to this value). A target point is the desired settlement value a party has set as a goal when negotiations begin.000 and $28. thus producing a true “win-win” negotiation. 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. 62 50 Practical Negotiation Tactics . each initial offer ($21. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. and is the range in which most negotiations actually occur. the process quickly narrows to the range between the initial offers. When the two parties agree to a price within the range. 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). 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. After initial offers are exchanged. See Tactic #18: Agree on Something As Soon As You Can. In the example. 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.
–10:00 p. We’ll just have chips and soda. Shelly. You can invite up to 20 of your friends. We don’t want it to be a late evening. 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 negotiations have suddenly gone in an unanticipated direction. a caucus can be used as a break to calm the situation down. If the team is feeling pressure to concede on certain items. the negotiations got out of hand when Shelly’s dad forgot what had been decided.m. without revealing their ideas to the other side.m. so we’ll have the party from 7:00 p. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. Example 1 Shelly’s “Sweet Sixteen” party was coming up. If negotiations seem stalled. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. because it might disturb the neighbors. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. If the negotiations are heated. There are many ways to use this strategy. Her mom and dad had already talked about it privately. Unfortunately. Mom: We’re planning on having your party here on Saturday night. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . and presumably had an agreement. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. so her parents sat down with their daughter to discuss the details. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. or if a member takes on a role in the negotiations that has not been assigned to them. A caucus gives you an opportunity to work out problems with your own team in private.Tactic 15: Caucus If you are part of a negotiating team. make use of the opportunity to call for a caucus.
And they can’t go home at 10:00 p.” They would never expect a party to end before midnight. We’ll get a band—everyone does. In fact.—that’s so “baby. Dad. I think the band would be fine. And midnight is definitely too late. (excited) That would be so cool. It’s special!!! Well. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. I’m sure we can ask them to tone it down a little.m. (During the caucus. I think we can handle a few more kids—how about 35? And midnight sounds okay. I guess the VFW will work. We could play records and you guys could dance. Oh. Your dad and I already talked about this and agreed that 20 guests would be the limit. That would be great! It would keep everyone entertained. Jerry from down the street is in a really good band that all of the crowd likes. Shelly. we need to talk. Time out! Dad. we’ll call you when we’re ready. That sounds like too many for here at the house. and then the number of kids won’t matter. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. alone. Actually. (with some irritation) I’m not sure.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. Mom! This is my “Sweet Sixteen” party. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. we could rent the VFW hall. okay.
is for little kids!! No. A DJ? I guess that’s okay. and we will need to approve the list. Example 2 The contract negotiations between the company and the union had been going on for days. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. Your mom and I agree—11:00 p.) Okay. to 11:00 p.m. But we can have the band.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. sorry. her mom presented the revised proposal. but your dad and I agree on getting a DJ to play.m.m. That’s so lame. That way. we’re going to rent the VFW hall. but no Sweet Sixteen birthday party decorations. But you are limited to 40. we will be better able to chaperone. but we’ll schedule the party for 8:00 p. All right. causing them to lose control and make compromises they hadn’t intended to make. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective.m. And we’re serving chips and sodas. please!! 11:00 p. Okay. too? No way!! I want presents!! Conclusion In spite of their prior planning. When they called Shelly back in. and not a huge production. Dad. midnight. Does that mean no presents. can’t we? No band. Agreed. this mom-and-dad negotiating team became unglued during the negotiations. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . and you can invite more friends.
What is this.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. 66 50 Practical Negotiation Tactics . The tuition benefits will encourage the workers to be prepared for new job opportunities. A lot of employees have spouses who can get health insurance coverage through their work. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. With the cost of college educations so high. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. The union’s lead negotiator misunderstood the proposal. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. some attempt to undermine me with my members? Company: I don’t know what you’re so worked up about—we’re willing to spend the same amount of money!! Union negotiator #2: Can we take a break? Union: We don’t need a break—we’re not discussing this stupid proposal. Union negotiator #2: Please—just a moment outside. many will want to use it for their children’s education. and the following conversation occurred. Union: (angrily) I’m not presenting this proposal to my people. The company’s negotiator didn’t recognize the misunderstanding. Tuition in place of health insurances? They’ll think I’ve lost my mind. it’s a good proposal. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No.
(After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. let’s move on.) I’m sorry. I think that what you’re proposing is a really good idea. we’ll be back in 5 minutes. Now. Negotiator #1 regained his footing. Good. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. and I apologize for explaining it poorly. the parties returned to the room. and the parties were able to complete their negotiations. Exchanging Initial Offers 67 .Union: Union: Company: Okay. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. I thought that the contract would cover one or the other for everyone.
Salesman: Well. this conversation takes place: Hobbs: Yes. but in reality. Example 1 The buyer. Mr.” Party B thinks that A has sacrificed one important objective to gain another. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . I’ll go get him. It is a useful tactic in any negotiations. Salesman: Let me talk to my manager. I know. However. A has gained something of true value and given up nothing he values in return. He doesn’t really care about the color of the new vehicle. Hobbs. 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: Yes. it’s a great car and a fair deal.” Throwaway items are those things that hold little or no value to you. according to the Consumer Reports listing of the cost of the vehicle. But for this price. but … Salesman: But what? Hobbs: Well. you don’t want your opponent to know what these things are. Here’s how it works: Party A exchanges the item for something of true value. not revealing that the item exchanged is a “throwaway. I can go to another dealer and get a green exterior—the color I like best. quickly checked the dealer’s inventory of sport utility vehicles in stock. and noticed that none of the vehicles have a green exterior. At a point late in the negotiations. but he makes a mental note to use color as a “throwaway” item. when the two sides are only a few dollars apart. according to my figures. so be sure you present them in a way that suggests importance.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. you are making $200 profit over the true dealer’s cost. we’ve got expenses and we need to make some profit.
.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Then we have a deal.. The manager was convinced enough to sacrifice a final $100 for the throwaway. Example 2 The office supervisor told the three internal sales representatives (Jenny. The days in question are: Exchanging Initial Offers 69 . 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.. and seniority will be used to determine who gets to choose the first day. Conclusion Mr. 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. The three are sitting at a lunch table to discuss the schedule. At the very end of the negotiations. Employees will be paid time-and-a half for each of these days.no it’s not. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. I’ll take the red one for $100 less. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). All three employees must agree to the schedule. Miguel. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I . Hobbs successfully chose color as a throwaway item.
26. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. 30. 26 Miguel: November 25. A second and third round produced the following allocation: Jenny: December 23. They have decided to start over. She proposes to work five days. 30. She got what she wanted by giving up something she did not value: the two other days. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. She would actually prefer to work the extra days and get paid time-and-a half. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. and each chooses their days to work: Carolyn: December 27. December 30. but that is a secondary consideration. This would allow Jenny and Miguel to each work only two days.November 25 (the day after Thanksgiving) December 23. January 1 Carolyn: December 24. They all agreed to their schedules. December 31 Miguel: November 25. January 1. 31. January 2 None of the three are totally happy with the results. if they let her choose the two days she will be off and the five days she will work. 2 Jenny: December 23. 24. each made a first choice of days they will work. in exchange for giving up earlier choices due to seniority. 31 January 1. December 26. They agree. December 27. 2 In the first round of negotiation. 70 50 Practical Negotiation Tactics . 27.
A reluctance to include one particular financial item with other financial issues. The estate’s assets included a checking and savings account totaling $450. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. and the stock and distribute the proceeds. can indicate that something you think is minor is really a major concern to your opponent. they met at the house. we need to sell the house. The house and much of the furniture has been in the Exchanging Initial Offers 71 . Example 1 When their mother died at age 82. the antiques. one might package all of the financial issues in one group and negotiate on that package as one issue. three ways. 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.000 with no mortgage on it. For example. it is often helpful to package the items in distinct groups and then deal with each package separately. Anne: As I see it. 300 shares of stock in a pharmaceutical company.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. When the girls decided it was time to talk about the estate. In addition. but I’d like to talk about the house and the furniture. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. for example. their mom left specific pieces of jewelry and art in the will to each of the girls. along with the cash. realizing that the total cost of a deal might make or break the agreement. Anne and her sisters. were faced with the task of selling the house and disposing of their mom’s personal belongings.000. and a collection of antique furniture. The house was closed up at the time of their mother’s death because she had been in a nursing facility for a couple of months. Autumn and Angela. a house valued at $250.
we’ll discuss again what happens to the house and the antiques. and use it to fix the house up? Then when we make a decision. What would you think about agreeing today to distribute the cash and stock three ways. Mother was born here and grew up here. Autumn: I think its awfully soon to be making these kinds of decisions. Why don’t we leave some of the cash in the bank. Angela: I live close by. In fact. There was a reason why she gave us what she did. If we want. and letting everything else wait for another discussion. And we’ll fix the house up. Soon. she’s free to do so. we’d get a lot more for them. If Angela wants to hold on to her stock. and now that we have them. I’d really be interested in talking a trade for some of them. it’s a magnet for vandals. Anne: Okay. and if we wait a couple of years. Autumn: Sounds good to me. It’s a buyer’s market now. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us.family for years. we’re really free to do with them what we want. we will have a more valuable asset. don’t you think? Angela: Maybe. Angela: Now’s not a good time to sell either the stock or the house and antiques. So we agree: We’ll leave $30.” She gave those things to us.000 in the bank and distribute the remainder three ways. I’d like it all to stay in the family. We’ll split the stock three ways. With no one living here. I’d like to talk about the art works Mom left each of us. Frankly. Anne: But that means we have to continue to take care of the house and its contents. but the operative word is “give. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. we can sell ours. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . so I will be able to keep tabs on it.
deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. and establishing a work schedule to accommodate evening and weekend clients. etc. health benefits. The negotiations on the other items—the house. Employees: We’ve got a lot of items to cover. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. May I suggest that we divide the items into three areas. Several issues also needed to be addressed: the ability of employees to move up through the organization. funeral. The third: Ben- Exchanging Initial Offers 73 . vacation. Angela: That’s fine. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. what kind of paid leaves there will be (personal. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). including benefits for partners in non-traditional relationships.). The second: working conditions (work schedules and promotional opportunities). 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 following tasks needed to be a accomplished: establishing basic pay schedules. the jewelry. tuition benefits. and the assignment of the limited number of parking spaces. the antiques. but I’m making no commitment to trade. and the art works—will be more difficult. Anne: Same with me. sick.
I think it also makes sense to include tuition benefits in the Working Conditions category.efits (health insurance. Wages should not include merit pay raises. we are an agency supported generally by public funding. and the parking spaces). but the parties were able to come to agreement because the wage issue had been resolved. Executive Director: I think it’s a good idea to group items together. Later negotiations were difficult. tuition benefits. the paid leave categories are pretty clearly defined. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. 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 . Executive Director: Well. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. I would include that under the Working Conditions category. 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. paid leave times. Executive Director: Sounds like a good agenda. to be honest with you. that makes sense. Employees: Okay. Let’s get started. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. 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. but I’d change your list. as well. Also. because they’re really an incentive for better performance.
Exchanging Initial Offers 75 . Tim: You might be leaving town. Now. rather than disposing of assets. and she agreed. Their “property division” was mostly about dividing their debts. because Tim felt that Kathy had taken advantage of him during the marriage. no matter how insignificant. You can also make an effort to agree on something your opponent offers early in the negotiations. Kathy was asked by her employer to relocate to another city. They have no children. are divorcing. Tim worried that he would be stuck with all of the debt. Tim began working right after graduation. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. too. You signed those papers. An initial agreement. They met and married in college. Example 1 Tim and Kathy. The discussion might become very heated. with her promotion sending her out of town. Kathy’s first job paid more than Tim’s because she had a graduate degree. Kathy borrowed more money to go to graduate school full-time. and both have good jobs. sets the stage for mutual respect and communication. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. It was her idea to buy the house and go into debt to furnish it. They had also furnished their house on credit. and that you are entering into the negotiations with the intent to reach agreement. and might not even be able to keep the house. without suggesting any changes or modifications. after a brief marriage. It indicates to your opponent that you are a reasonable negotiator. but don’t think you’re going to stick me with all of the mortgage and credit-card payments.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. The couple hoped to do the divorce without involving lawyers in order to save money. They were in the middle of buying a house.
Frankly. Tim: Well. Tim: Okay. The monthly payments are about the same. and you got your sports car. as long as the cost was approximately the same. When we bought them two years ago. hold on. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. I don’t intend to “stick” you with anything. Okay. and XYZ Co. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. as you remember. 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 that makes sense.Kathy: Hey. I can hardly argue with that. a wholesale art dealer. I got my convertible. Kathy: I suppose we should look at the school loans next. Kathy: Now. 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.. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. ABC usually uses UPS 76 50 Practical Negotiation Tactics . I think it only fair that I take over repayment of all the school loans. yes. If both of us had been working the year I went to graduate school. What do you want to do about them? Conclusion Having agreed to two items very quickly. an art gallery. They also agreed that Tim wouldn’t have to pay her that amount for five years. and he could pay it in annual installments over a five-year period. 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. we would have paid down our school loans more. about the house and furnishings.
but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. and began preparing to return all of the artwork to ABC. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. The artworks filled four boxes. They arrived right before the holiday weekend began. XYZ’s manager failed to open the boxes or remove the artworks.to ship artwork. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. Unfortunately. when the boxes were opened on Monday. and the boxes showed no external damage. ABC refused to pay WeCanShipArt until it received payment from XYZ. We’ll expect you to pay for the 12 works that will be in your show. However. but only if you let us ship it UPS. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. and we will continue to discuss who is liable for the three water-damaged works. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. The other times this happened. it was obvious that the art in one of the boxes had suffered considerable water damage. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. 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. or else the box was damaged in XYZ’s warehouse. and arrived on time and apparently in good condition. ABC: Before we begin. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. XYZ decided to cancel the promotional sale that was to start on Wednesday. XYZ contacted ABC immediately. XYZ: ABC: Exchanging Initial Offers 77 . 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. 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.
And we’ll eat the cost of shipping.m.XYZ: Agreed. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. 78 50 Practical Negotiation Tactics . tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. I can’t see how I can refuse that. ABC: Well. You can’t just ignore us. The artwork was not damaged while in our control. that’s okay with me if it’s okay with XYZ. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. XYZ: Okay. they will split the cost of the three damaged pieces three ways. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. Now. and if word gets out that you think it was. Having reached an amiable solution to the immediate problem. at its financial risk. They also agreed that if the investigations are not conclusive. generated a like offer from WeCanShipArt and a reasonable response from XYZ. If we don’t make the deadline. WeCanShipArt: Wait a minute. regardless of where the original three artworks were damaged. we’re ruined.
period. no hard feelings either way. Ann: Well. consider using the “First and Best” tactic. Ann: Thanks! We really need one. I don’t have any idea. I know you and Jeff said you’d like one because you have about five acres. The “first and best” tactic enabled them to settle the matter easily. Example 1 Colleen: Ann.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process. but if you’re interested. Okay? No quibbling. Why don’t you give me a price? Colleen: Oh. and it came with the bush hog and the leaf pick-up. What do you want for it? Colleen: Well. Ann: That sounds great! I don’t want this to affect our friendship. we’ll sell it to you. Exchanging Initial Offers 79 . we paid $5.000 for it six years ago. 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. we plan on selling our Ford tractor when we move. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. Can you check others in the paper and just give us your best price? We will either take it or advertise the tractor in the paper. 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. and even more hours in the fall picking up leaves. You must mean what you say and be prepared to walk away from an unacceptable offer. I don’t want to quibble. We plan to put an ad in the paper next week.
I expect a fair increase. Here it is. on this slip of paper. I’ll get back to you in three days. and you know my current salary. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. but I don’t want to start off in a new job by negotiating with my boss! So. but we have internal budget considerations and we must consider equity with other employees. I want the job. He also started the job with a positive working relationship with Vernon. Okay? Vernon: That sounds good. no questions asked. I came up with the best salary offer I can make.Example 2 Archie: Well. who admired the way Archie negotiated his starting salary. how about you making your first salary offer your best one. as we agreed. (three days later) Vernon: Archie. I think we have agreed to all aspects of the job offer. I don’t like negotiating over salary either. We want you. and I’ll take 48 hours to consider it. I’ll discuss it with my wife and get back to you in 48 hours. Archie: Thanks. except salary. I’ll either accept it or reject it. So. 80 50 Practical Negotiation Tactics . Conclusion Archie accepted the job offer.
Example 1 Kevin. Third. I’m the only junior in the crowd. and ignore or deny any weaknesses in it. Exchanging Initial Offers 81 . First.m. we’re all meeting at Donna’s so we can share a limousine. (Once negotiations get underway. a 4:00 a. you know that Sally is really looking forward to this. you only have one Senior Prom in your life. Present your position and demands as if yours is the only logical position. so he knew that he would have to sell them very quickly.) During the posturing phase. He and his date had decided that as long as they could join their friends for breakfast after the prom.” As you know. Kevin had “negotiated” with his parents before. His girl friend’s Senior Prom was coming up and Kevin obviously wanted to stay out beyond his usual curfew time of 1:00 a. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. so the prom is a pretty big deal to both of us. and we’ve made a lot of plans with our friends that I need to talk to you about. Sally’s Senior Prom is coming up. we’re not going to be dating exclusively after this summer. 17 years old and a junior in high school. Fourth. was dating a senior. and then to breakfast at “Timothy’s. First we’re going to dinner.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. then the prom. This is called posturing—presenting your position strongly and completely. curfew would be okay. since Sally is going away to college next year. but he figured “all night” was relative. you will probably have to modify some of your positions if you are to reach agreement. and in a favorable light.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. Second.m. Kevin: Mom and Dad. look for indications from your opponent as to what he or she believes is their best position. It might be your only opportunity to explain your position without interruption. Posturing is indeed “acting. He knew his parents would not agree to let him stay out all night.
you and Sally need to call it a night (or really a morning). We’ve heard that they allow kids to drink. We are. I know you trust me and that I’ve earned the trust. but it should not be oversold.m. We think that after the breakfast. remember that when you started dating Sally and hanging out with an older crowd. Fifth. I believe you can pay a little more and have the limousine bring you both home. So. the limousine will take us back to Donna’s house to spend the night. Donna’s parents will be there. so there will be plenty of chaperoning. they will be open for the Prom crowd only. Things can happen on a night like that that adversely affect you for the rest of your life.or drug-free. And if we don’t spend the night. From where we sit. Finally. but because the owner’s daughter goes to Sally’s school. we told you that we would not be changing our rules to accommodate that older group. 82 50 Practical Negotiation Tactics . You make some good points. I think I ought to be able to stay out all night. Also. Second. Sally’s parents trust us and have already said yes to her. and we’re just not happy about that. we’ll have to get in our car and drive home very early in the morning. yes. However. Donna’s parents are not as strict as they could be when a bunch of you are there. We’re just not convinced that your entire group has been alcohol. of course. And.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. happy about your plans to use a limousine so you kids aren’t driving. That’s asking us to believe a lot. That’s the deal then? Okay. for sure. we know. which could be dangerous. I’ve never missed my curfew. You realize that this could be as late as 4:00 a. you have been fairly good about making your curfew—most of the time. Yes. I don’t drink or do drugs. but to use that as a reason to stay overnight doesn’t make sense. 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. and the crowd we hang with doesn’t either. this prom is a one-night thing—a dance that is dressier than you’re used to.
we’d be adding at least 500 new jobs. because his parents could not disagree with such wellthought-out ideas. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. but we’re getting a lot of interest from other states willing to help us relocate. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. The spin-off business from our operations is huge. our Exchanging Initial Offers 83 . we’re of course interested in keeping you here. and had this conversation: Tencro: We really want to keep our company here and expand it.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. It currently employs 800 people. Nevertheless. Example 2 Tencro Company decided to modernize and expand its business. Also. but was disappointed to learn that they offer very few incentives. we are one of the largest employers in this county. other companies have received incentives and Tencro certainly wants all it can get. Tencro: Let me just remind you of what our company means to this state. and it does not really need any help. Tencro has approached the state’s Office for Business Incentives to see what. one-floor operation would be very profitable. regardless of the incentives. With 800 employees. but it could easily add another 500 if it had the space on its assembly line. and a new. the state can do to help the company expand and rebuild. The company approached other states to see what incentives they might offer Tencro to locate in their state.m. if anything. Tencro approached the state’s Economic Development Officer. We need to find out what you’re willing to do to keep us here. EDO: Well. If we can expand here. but there are limited options available. The assembly plant is out-of-date.
and traffic signals.. etc. And we’ve been offered land practically free in the neighboring state. etc. schools. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. if the new location is at the local industrial park. we will need the two-lane entrance expanded to four lanes. now that the economy has improved. And. additional police. There are more residents in the state demanding more public services: road improvements. 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. and we’ve had to divert funds from business incentive programs over to basic services. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant.employees pump money into the economy by buying houses and cars. We need a rebate on the local income taxes to help pay off the loan to build our new building. so we’d have to have it free here. We need certain incentives. and we are willing to offer some training dollars for the new workers. or else it will not be cost-effective for us to stay here. Also. We do want you to expand your plant. Certainly. That might involve the state building housing for them at a reduced cost and providing them with some retraining. We need help in the cost of attracting and training the new 500 employees. We can’t possibly give it away to other companies coming in behind them. EDO: The state has very limited resources to pay for economic development incentives. We 84 50 Practical Negotiation Tactics . EDO: Well. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant. while we value your company as a long-time corporate citizen. paying taxes.
the training and the new road improvements were all the incentives offered to Tencro. Future negotiations continued. Tencro bought land in the industrial park. we’re just not in a position to offer more than that at this time. EDO: Get back to us as soon as you can. Other than that. and hired 500 new employees.agree that the road into the industrial park must be widened and a traffic light installed at our expense. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. However. Exchanging Initial Offers 85 . let us go back and take another look at our options. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. Tencro: Well. The new set-up was so profitable. Tencro was able to pay off the borrowed money in half the time. but for the fact that each party did its homework and was aware of the true facts. borrowed money for the new building.
which can be very useful). Jay: No. Their realtor told them that it sold for $290.000 two years ago.000. 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. never give them their asking price.” The perfect first offer.e.000 three years ago).” (You have won a settlement. but you feel cursed because you gave away too much. or 3) Make an unrealistic offer (i. because you have settled quickly. think things through before you make or accept the first offer. thus requiring greater concessions on both sides. 2) Start out with an old number. and you cannot withdraw it in good faith.000—what they paid for it. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. The other party will probably come back with an equally ridiculous offer.000 and $337.000 this year.) To prevent this from happening. Sue: Let’s offer $325. They found one they both like that lists for $325. particularly if you don’t know the other party’s “settlement range. of course. We don’t know how anxious they are to sell or if they know the market. 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. before someone else does. is the most (or least) the other side will accept. Jay: No.. Avoid giving away too much at the outset.000.000 for a house that sold for $185. 86 50 Practical Negotiation Tactics .Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. such as last year’s price. and that two similar ones on the same street sold for $330.000. offer $150. and houses in this area sell fast. at minimum cost. Let’s low-ball them and offer $290. That’s a fair price. then $320. The sellers must be willing to come down a few thousand … Sue: Well.
000 total.000. Sue: Then you do it. 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. The buyers were very motivated to sell.) Bob: I’d do it for $3. Frank: Me too. and the offer was based on fact: the prior negotiated price. Give us your lowest price. (Bob and Frank meet privately to discuss the situation. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. I can’t tell our realtor $290.000 for each of us—$6.Sue: Don’t be crazy. as Sue had first suggested. then let them make a counteroffer. They outlined how they would develop a new employee performance-appraisal system. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company. (the next day …) Jay: They made us a counteroffer of $307. but who knows what they are planning on offering. was very impressed with their presentation. If. as requested by the human resource director.500—half the difference! Sue: Great. the sellers obviously would have accepted and Jay and Sue. Lyle Foxworthy. Both parties felt that they made a good deal.000. realizing they offered too much. they had offered $325. since they had already bought another house. Exchanging Initial Offers 87 . That’s an insult! Jay: Well.
) Lyle: Okay. What’s the cost? Bob: We want the job. We’ve waited long enough. We’ll do the job. 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. Bob: That’s fair. That is all that’s left in this year’s training budget. but we know you must have an amount budgeted for this and we are willing to do it for that amount. but we can’t pay more than $18.000) their minimum price of $6. and you two come highly recommended.000.000. They also ended up getting three times ($18. 88 50 Practical Negotiation Tactics . I’m out of time. and it would not apply.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. Lyle: Okay.
Expect that the “total pie” will be different from what it was at the outset. be enlarged (see Tactic #27: Expanding the Pie). seeing no common ground. Instead. labor negotiators. T Making Counteroffers (The “Give and Take”) 89 . which is often the case. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert).Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. carefully evaluate an opponent’s offer. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). Skilled negotiators such as salespeople. 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. is likely to pull away from the table. and attorneys use tried and true tactics in giving and receiving offers. do not dismiss it because it is not all you want. 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. One or more parts might be acceptable or indicate movement from their previous positions. Also. It has often been said that the key to negotiations is to be flexible (see Tactic #25). because if you do not at least appear to be flexible. When the other party makes an offer. in fact. what appears to be an outer limit of the settlement range when the process starts can. and do not flatly reject it because it is not your offer. In some negotiation situations. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. which would most likely weaken their position (see Tactic #26: Keeping Secrets). Experienced negotiators seldom reveal their exact priorities and objectives. the other party. but possibly of different values to your opponent.
We have four options. In mid-June. Dad: Wait a minute. His brother Sydney. completed his first year of college and came home for the summer around the middle of May. Proposing only one solution to a problem. 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. He planned on being home for one last week before having to pack up and go back to college. Dad. I don’t want to give up on a family vacation that quickly. and I try to get to the South Carolina beach for a week in July? Sydney: I’m not going to the beach with my parents! I’ll just stay home. 19. finished his freshman year of high school at the beginning of June. 15. Jerry pointed out that he is expected to work until July 31st. except when you’re negotiating. it looks like we can’t really plan a vacation for all four of us. gives your opponent little maneuvering room and might even prolong or damage the negotiations. Option 1: No family vacation. and quicker. Jerry had already started his summer job. while it may be your best option. their parents began discussing a family summer vacation. Jerry will be here. Let’s see what we can work out.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. Here’s the discussion that followed: Mom: Well. Option 2: Mom and I go before Jerry leaves on August 1. Proposing multiple ways to reach your goal can get you to the same place. Sydney. so you can go without me. what say you. 90 50 Practical Negotiation Tactics . Example 1 Jerry. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. The week he would be home would be the first week of school for Sydney. 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.
If we started the vacation on a Thursday. actually. Andrea considers Making Counteroffers (The “Give and Take”) 91 . Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. you have a half-day orientation on Wednesday. one paralegal. Then Jerry joins us until Thursday. but it should work out all right. if it’s okay with Jerry. And I miss orientation and start school the next day? Dad: That’s an option. Sydney: Okay. me. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Bob. and Carl).Option 3: Mom. and one secretary in his litigation unit. Conclusion The goal was to have a family vacation. It’s not perfect. Classes don’t start until Friday. and Sydney go to South Carolina before his school starts. Sydney: Don’t I start school that week? I don’t want to miss school. Joe has no say in who was hired by the corporate legal office to work in his unit. Jerry: My friends and I have plans through Saturday of that week. By proposing numerous options. when we come home. Mom: Well. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Jerry: Okay with me. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. but he can discharge employees for poor performance. Mom? Mom: Let’s do it. we meet up with him that week for vacation. we could return home on Thursday and still get a week’s vacation. so I won’t be able to meet up with you until Sunday.
Andrea: We’re hired for our expertise. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. We have a formal procedure that you just don’t like to follow. Andrea: Wait Joe. Before you start. 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. If you don’t like the way I do my job. Andrea: Well. we have a very big problem. Her job performance was acceptable. and I don’t see why we don’t have more independence. so Joe took a “hands off” approach. 92 50 Practical Negotiation Tactics . It is to the corporation’s benefit to address that problem here and now. rather than to put it off on someone else or for some time in the future. Joe: Come on. Andrea: You didn’t list moving to another unit as an option. however. Joe: That is certainly an option. Andrea. I really see your options as follows: You can leave the corporation.herself to be a professional. you know that wasn’t an okay to settle. let me say that I’m handling the missed deadline on the pleading. but it doesn’t solve the problem—nor is it the only problem. To put it as bluntly as I can. Joe: That’s all well and good. 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. she made a two glaring errors in judgment. Joe: Andrea. In the last month. isn’t it? But I don’t think just moving you really solves the problem. or you can work out a “supervision” agreement with me so that I can better monitor your performance. which forced Joe to take action. The attorney for the other side has agreed to give me the additional time to file it. You had no authority to agree to settle the Stites case without clearing it with me. It was just a comment. you have a job-performance problem. and resents any attempt by Joe to supervise her work.
then it would save face for me if it comes with a move to another unit. the needs of the corporation have to come first. But in fairness to our mutual employer. If that option is okay with you. Believe it or not. lets talk to Bill about the move. It also changed her attitude about being both a professional and a team player in a corporate office. I hope we can work it out. If you are convinced that I have to undertake an “approval” program. but it would still require some change in the way you work: either a demotion. Andrea’s move and subsequent “approval” regime did. by Leigh Thompson.) Making Counteroffers (The “Give and Take”) 93 . in fact. Joe: That’s fine with me.Joe: That could be an option. I want to stay with the firm. my goal is the same is yours: to create an environment where you can perform to your full potential. and propose an acceptable alternative. (Adapted from The Mind and The Heart of the Negotiator. or I would advise your next supervisor to put you on a very formal approval program. improve her work performance. rather than my staying here. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. Andrea: Well.
three strategies are used. then the contractor has lost $500 in revenue. For example. then those which can be easily traded. This approach is an important tactic. Wow! We are off to a good start. 94 50 Practical Negotiation Tactics . if a buyer negotiates a $500 reduction of a contractor’s bill. we both want the sod. Brooks: Right. In essence. and a home theatre.). With distributive items. They both agreed that this is the maximum they will spend on “extras” before moving in. and finally. Avoid assuming that you both differ on every issue (in which case you might be making unnecessary sacrifices) by first identifying items for which both sides have similar desires.) Yes. etc. because it can speed up negotiations and produce a more desirable outcome. 3) distributive items (those items for which the two parties have exactly opposite interests. Maureen: First. They have a fixed amount of money—$14. Let’s see. thus making it necessary to find a middle ground on each. (She looks over the list.000.500.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. one person’s gain is another’s loss—zero-sum. that’s $9. It goes like this: Organize the joint list of demands into three categories: 1) compatible items (those items that both parties can quickly agree on because they share the same desired outcome). let’s see if there are any items we both want. Example 1 Brooks and Maureen Wilson have just finished building a new home. Let’s agree to those things. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. 2) exchange items (those that can be easily traded off—one item for another item of equal value. These items often involve money). It is used only when each side has several demands. Exchange. only those with polar-opposite interests that must be divided. the fencing.
Can we split it evenly? Brooks: Okay. I’d like to spend some of it on lighting upgrades.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. that makes sense.000 $5.000 $2. $750 for lighting and $750 in the bank.000 $500 $1. which I’d like to keep in the bank.000 $3.500 $5. Maureen: No.000! Brooks: Good. which takes another $3. We have $1.500 left. and we both get things we want. These are all permanent immediate needs.# 1 Sod Item Cost $1.500 $2.500 $500 $1.000 $1. I’ll trade your sidewalk and trees for my whirlpool bath. Making Counteroffers (The “Give and Take”) 95 .200 $200–$2.
Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). Profit-Sharing 5. both sides exchanged lists of initial demands at their first meeting. management and union negotiators found that a “winwin” approach to negotiations worked well. 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. finally agreeing to split the difference on the remaining amount (distributive items). All items to be negotiated and their desired outcome for each item were put in writing for review. This year.Conclusion By taking the time to list all the items each person wanted and their cost estimates. Wage Increase 4. During that time. The combined lists total thirteen different items: Desired Outcome No. Drug-Testing Program 96 50 Practical Negotiation Tactics . Pension Increase 3. even in difficult years. Length of Contract 2.
eleven of the thirteen original issues to be negotiated had been agreed to. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). Next. First. one Making Counteroffers (The “Give and Take”) 97 . and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). Subcontracting 12. At this point.Distributive rent program co-pay Exchange Exchange 7.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Shift Differential 11. They proceeded to draft the language to settle these issues. No Strike/No Lockout 10. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). they began to trade off the exchange issues of similar value and nature. and (#9) to continue the often-discussed no strike/no lockout provision. Because they held opposite positions on these issues. Clothing Allowance Based on senior. signed. Finally. Overtime Assignment 8.6.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. (#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. Health Insurance Employees pay 20% Continue cur. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Paid Funeral Leave 9. and removed from the table. Next. Job Security 13.
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. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. Second. The tactic offers several advantages: First. Third. but a middle ground was eventually found on each and negotiations ended. when you agree on the items where both parties have similar desired outcomes. but it can be very effective when a negotiation situation involves several issues. 98 50 Practical Negotiation Tactics . A middle ground often must be found on each of these distributive issues if you are to reach an agreement. exchange. if both parties start from reasonable positions. They then identify each as compatible. you can use the process to settle many of the other issues on the table. negotiations begin on a positive “win-win” note. when you exchange items so that each party achieves their desired outcome on one of the two. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. Conclusion This tactic is simple.side’s gain is the other’s loss. or distributive so that the negotiations can begin in an organized manner.
Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. 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. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. Rob: Wait a minute. Since they didn’t know each other well. Rob: Making Counteroffers (The “Give and Take”) 99 . They agreed on which part of the room each would have. So when’s a good time? Jasper: (without hesitation) No way. Rob stays busy all day and evening with other activities. The final issue had to do with “lights out” and quiet times for studying.Tactic 24: Wait to Counter As the negotiations begin. Here is how the last issue was handled: Okay. stereo. This isn’t high school. each side is expected to put an offer on the table. will make your opponent feel good about the process. 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. the location of the TV. and studies late into the night. so I can study. do not offer a counterproposal right away. and refrigerator. last item: I’d like it quiet in the room at night. and from a strategic standpoint. It is especially important that you do two things: take your time before rejecting any offer from the other side. and can help you reach your goal. Let me finish. Mutual respect must be part of the negotiation process. Waiting a respectful amount of time to counter. Jasper: Finish or not. I’m not interested in a curfew. you know. they decided to establish “room rules” so that they would both be comfortable with the room assignment. so he wants a quiet room late at night.
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. Under the restructuring. The appeals procedure would have to be altered to reflect the restructuring. 10:30 p. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. The union contract required that management renegotiate this change in the grievance procedure with the union. the positions of non-union crew leader and floor manager would both be eliminated. is all I’ll consider. curfew on TV and other noise every night. and d) a hearing with company owner if the matter is not resolved in 20 days. but changed his mind when he saw Jasper’s attitude. and that’s not negotiable. and the union foreman would report directly to the plant manager. 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. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. I want a 10:30 p. Rob: (there is no hesitation in this voice) No.) Listen. Jasper: Midnight.m. No agreement was reached. Jasper: (without taking a breath) At best. midnight during the week is the only thing I’ll consider.m. b) written complaint to a floor manager if the matter is not resolved in 5 days. and that’s it. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down.Rob: (Rob was about to suggest midnight on Mondays through Thursdays.
An aggrieved employee can make a request for a meeting with the plant manager. Union: As you know. We’ve simply eliminated the first two steps. because those management layers are gone. We’ve got a couple of alternative models for you to consider. 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.any objection to the change. (Note: An attitude change sets in. 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. We just cut out two steps. Union: You obviously didn’t come here to negotiate. If in 20 days he/she has not been satisfied. the employee and the foreman would meet with the plant manager and attempt to resolve it. Certainly. Union: Hold on. this redraft is a very simple change to the contract. The union was prepared to accept the plant manager’s position as final. ABC Company’s negotiator explained the management changes soon to be implemented. 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. and began the negotiation session concerning the grievance procedure. The redraft is simple and straightforward. no one can complain about that. After initial pleasantries were exchanged. We’d like you to consider the plant manager’s role as a problem-solver. but to dictate. our grievances often signal to management that there are real problems on the shop floor. If the union foreman felt that the grievance had merit. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. and everything else stays the same. and I’m certain your members will be okay with it. Company: (no hesitating) Trust me. In fact. Company: (rather abruptly) Let’s not drag this out.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . rather than go on to appeal it to the company owner.
You can’t be serious. and actually accepted a three-step procedure. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily.two-step grievance procedure instead of a four-step procedure. rather than in the 35 days the current system provides. the company entertained the ideas the union had tried to propose before. After a cooling off period. This time. 102 50 Practical Negotiation Tactics . Union: We’re very serious. the two parties did meet again. We’ll see you on the picket line. and we’ll strike if we have to. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days.
one sister. and ten nieces and nephews) always ate around 5:00 p. and identified the range of options they feel comfortable with negotiating. Next year. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. you can adjust your demands or goals to include such new ideas. Bill’s family won. Even before the baby’s arrival. 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). two sisters. Be open minded. Bill.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. we’ll get to our side. their spouses. and at least five aunts and uncles) ate around 7:00 p. it’s just too much to do both.m. and now have a new baby girl. They flipped a coin to see who “got” them and the new baby this year. Example 1 Sue and Bill have been married four years. Sue’s family (parents.m. two brothers. They’ve done the research. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. If you are flexible. The couple used to have Thanksgiving dinner at both families’ homes. Sue: Yes. Nancy: Sue. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. established goals. four brothers. 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). Mom says you. and do not dismiss something said by your opponent just because it came from the opponent. Bill’s family (parents. Making Counteroffers (The “Give and Take”) 103 . and we’re really not able to enjoy either one. Sue’s sister Nancy called her to talk her into coming anyway. But after the negotiation gets started.
Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. 104 50 Practical Negotiation Tactics . When that goal looked out of reach. Nancy: If we keep the time at 5:00 p. Thanksgiving is Thursday. I bet everyone could make it on Friday. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. Nancy: I’ll let you know. Sue: I don’t know. Bill won the coin toss for this year. I mean. Celebrating the next day seems odd. but she won’t tell you. I thought of asking Mom if she could move dinner up to noon or so. the holiday will be over. Nancy: We’d make it special by all of us being together. we’ll come to Mom’s. she suggested a unique alternative.m. Sue: Next year. So that doesn’t work. some people have to work on the Friday after Thanksgiving. and it became the family’s new tradition. either. it’s okay with me if you can sell it to everyone else. 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. I know that I would rather not do two Thanksgiving dinners on Thursday.Nancy: It just won’t be right without you guys. By being flexible.. There’s nothing “special” about Friday. Mom’s very upset. but then I realized that the rest of you already go to your in-laws earlier in the day. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday.
Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. Kids’ Home hoped to get $500.000 a year for operations.5 million is available for distribution to numerous charities. but we need some assurance that you will be able to build and operate the orphan home at that location. Each year. depending on the cost of the land. the foundation’s regular annual grants come to roughly half of their available funds. Kids’ Home: That’s why we brought the foundation’s officials with us. a non-profit organization for orphaned children. Unfortunately (for Kids’ Home). City: Can’t you borrow the money from a bank to build the facility. Foundation officals: Oh. we’re committed in theory. They are meeting with the city to ask that the land be donated by the city for the project. We need the city’s help by allowing us to get the city land donated to us (for free). The foundation has a substantial endowment fund. We only have maybe $2 million a year to put toward this charity. City officals: We can probably give you the land for free. the interest income of around $6. but the principal of the fund can’t be touched. but we can’t fund all of the $12 or $15 million. we hope to break ground early next year for the new orphan home. Kids’ Home: As you know. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget.Example 2 Kids’ Home. Estimates for building a new orphan home ranged from $12–$15 million. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 .
We’re a nonprofit group. We’re not familiar with that program. We wouldn’t want to make such a commitment to a bank. We probably would not be able to participate. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. We’ve never committed our funds to pay back a bank loan. but we’re willing to look at it. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. 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. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. it could end up costing double that amount. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. I’ll contact the state tomorrow. If we borrowed $15 million at 10% interest. 106 50 Practical Negotiation Tactics .Kids’ Home: Borrowing the money gets very expensive. and really taxes our ability to raise funds.
the neighbors began to have problems. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. and often took up all the space along the street in front of the two houses. the Smiths could count on parking their car directly in front of their house. They asked to meet with the Smiths to talk about these disagreements. Mr. each side has to know generally what each other wants to accomplish. you might not want to reveal all of your priorities at first. However. But the Jones clan had four cars altogether. and trust can only be established if all parties interact truthfully. Making Counteroffers (The “Give and Take”) 107 .Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. These parties could get rather loud. Mr. and we would very much like to talk about how we can resolve these issues. The Smiths called the police to complain about a late-night party. Before the Jones family moved into the neighborhood. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. and often lasted until 2:00 or 3:00 a. The Jones family suspected that the Smiths called the police. Smith: We don’t know what you’re talking about. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. Successful negotiations depend on trust. It is perfectly acceptable to say that you are not ready to reveal certain things. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. it is not acceptable to lie. Example 1 Soon after the Jones family moved in next door to the Smiths.m. In order for a negotiation to be successful. Jones: We’ve obviously gotten off on the wrong foot. yet not reveal all of your goals and objectives. and asked the officers to cite the Jones kids for parking too close to a corner. At the same time.
Almost every day. Mr. we have a problem walking long distances in bad weather. if they are outside. but we do know that someone has complained. It is really very disturbing. Jones: We’ve already talked to the girls about the parties. Is that everything now? Mr. fine. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Jones: Well. Also. we’d like to be able to park our car in front of our house. Jones: I wish you had mentioned that the last time we talked. Mr. and not in the back yard. At our age. Mr. since you’ve asked. yes. I’ll talk to the boys and we’ll make sure they play baseball in the park. Smith: No. the Jones were visited by a city inspector because of a complaint from the Smiths about the tree branches hanging over the fence and brushing against the garage roof. they kept it. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Smith: Well. (A week later. In good weather. Smith: Yes. Mr. Smith: Well. we would like to work out some solution. the late-night parties are a problem. And we’ll make sure none of our cars are parked in front of your house. I guess. a lot of problems. that wasn’t us. And the music is to be off at midnight. Muffin. they’re hitting baseballs into our yard. and was met with the following: Mr. the next time the boys were out playing and the ball came into the Smiths’ yard. Smith: You know that your boys are causing our dog. we’re good now? Mr. and they won’t be having friends over more than one night a weekend from now on. Jones came to see what the problem was.Mr. Jones: Okay. we thought you might have called the police about our kids’ party and our cars.) 108 50 Practical Negotiation Tactics . So. In spite of the Smiths’ assurances. Mr.
although none of the facilities outside the U. Mr. Union officials are afraid that a Japanese company might purchase it. because they didn’t like a grievance decision. Japanese companies often do not “recognize” labor unions the same way U. You could have seen that yourself. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. But we didn’t call the inspector. but Neno cannot tell the union this. The union laborers walked off the job on Friday. have labor unions.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. and the deal is close to being final. Jones: (at the Smiths’ door. Making Counteroffers (The “Give and Take”) 109 . Jones: Sure.Mr. Neno’s president and the Union representative met to discuss the walkout. Unless Neno can get the Union members back to work on Monday. The British insist that a very strict confidentiality provision be part of the negotiating process. irate) I can’t believe you people called an inspector on us. Neno has been negotiating the sale of its business to a British company. You obviously don’t want to be “good neighbors.S. We would have fixed the tree if you had asked. Why didn’t you tell us? We can’t read what’s on your mind! Mr. or the deal is off. the tree was clearly over the fence.S. or European companies do. Smith: Well. the British firm will walk away from the deal. Example 2 Neno Enterprises is a shipping company with extensive global operations. The union knows that the company is up for sale. you’ve said that before. The Jones’ effort to sit down and negotiate the problems with the Smiths were thwarted by the Smiths’ reluctance to put all of their concerns on the table and their failure to admit that they were the ones who made the formal complaints. Its local headquarters has a union to handle its international shipping.
the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. Anyone who buys the company will have to honor the contract we have. You really don’t want to do that. You don’t want to mess up our negotiations. Union: We think that the grievance decision affects our wages. But I have to have everyone back on Monday. I can’t really be more explicit than that at this time. no harm-no foul. so the union won’t be hurt by the buyout. But if your guys are out past Sunday. we will resolve it to your satisfaction by the end of the day. this is a legal strike under the contract. Neno: Look. Neno: Look. it will impact our marketability. Union: What aren’t you telling me? A labor shutdown. We’ll meet with all of the parties on the grievance first thing Monday. Therefore. Neno: All I’m saying is that there is a difference. I think it already has. 110 50 Practical Negotiation Tactics . And one company that is interested has a really good track record on expanding the businesses they buy. If that’s going to have a bad effect on your being able to sell the business. I’m certain that if we can sit down and talk next week. whether it’s for one weekend or a week. Have the guys back on Monday. I need your guys to come back to work on Monday.Neno: You know this is a wildcat strike and that it is in violation of our contract. then there’s probably no harm done. I’ll forget all about the strike. I promise you. any interruption in our shipping could affect how these buyers look at our business. We’ve not had a labor shutdown in 20 years. and if the guys are back on Monday. If they do come back. is still a labor shutdown. If everyone is back on Monday. Our guys are prepared to stay out a lot longer than Monday. we don’t. do you? Union: No. maybe by next Friday or the week after that we’ll have our guys back to work. I know it’s not news to you that this business is up for sale. It’s not the time to have one. We can’t put up with the kind of decision we got on our grievance. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously.
If I could. But I need to tell my guys that this is important to them as well. Can you assure me of that? Neno: Yes.Union: It’s that important to you? Neno: Yes. while the grievance was being resolved. rather than make up reasons. the union was willing to trust Neno—even though he couldn’t tell them everything. as well. Union: Okay. Neno called the union negotiator in and briefed him on the sale. Conclusion On Monday. Because the parties had dealt honestly with each other in the past. we’ll be back to work on Monday. Union: Okay. Making Counteroffers (The “Give and Take”) 111 . and it’s that important to you as well. I would be more specific. but the British firm will allow them to organize at their foreign locations. He told him that it would mean that the union would not only keep its jobs here. I’m going to go along with you because you’ve always dealt straight with me. the sale was finalized. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. was the right decision to make. I can. But I can’t.
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”)
Amber resisted the chore she hated. but the company president does not share your optimism on this program. I’m not going back to him again to discuss this program. Clean it after your game. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . she chose the one she most preferred. I’ll do it now. Roberto: But it will never generate enough interest if no one knows about it. Example 2 Roberto: I can’t properly advertise this new program with a $5. Roberto: But I need to start the direct mail and newspaper ads within two weeks.000 in the budget. Conclusion At first.000 budget! I need at least $20. B. Three. or C.000. I’ll approve $15. keeping her Saturday free. or we lose a whole year. Felipe: Well. but I will cut your staff by one part-time person (or $15. but no TV or anything until it’s done! (pause) Okay.000). Felipe: Sorry. I can’t help.000 for advertising. that is enough time. But when her mother laid out the schedule and gave her alternatives. but I will cut your travel budget out completely.000 for advertising. I’ll approve $15. Use the $5. I can accept B. I have three hours. (long pause) Felipe: Let me give you three options: A. and clean it. Felipe: (Roberto’s supervisor) Sorry. Roberto: Well. Take it or leave it.Amber: row before your basketball game. I’ll find a way to do without one part-time person.
which was his goal. One alternative.Conclusion Felipe was willing to think “outside the box. thus achieving his goal of not having to ask for a larger budget. Roberto believed.” He offered Roberto three alternatives of equal cost. would enable him to adequately promote the program. Making Counteroffers (The “Give and Take”) 117 .
It was 16% less than she had been led to believe she would be getting. 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. Unfortunately. you are a valued employee. After a few minutes of silence. the promotion had not yet been approved. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. Susan: Mr. If his opponent cannot agree to the demand but does not want to end the negotiations. She was determined to hold her ground for at least a 13% pay increase and a promotion. Example 1 Susan. You know my commitment to this company. he can make an open-ended statement. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. Here’s how the negotiations went. but one side comes back with a non-negotiable demand.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. received a glowing report from her boss on her job performance. Jones. The negotiator for the other side says nothing. This should have resulted in an automatic promotion and a sizable pay increase. I think you would agree with me that I have performed well above expectations this past year. I have to tell you that while I appreciate what you have done for me. Jones: I certainly do. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. and 118 50 Practical Negotiation Tactics . inviting a response. I very much appreciated the fair job performance review you gave me. nearing her third year with the company. But she also knew he would have to be willing to go to bat for her with his superiors if she was to get her advancement. Susan: I hope so.
Jones to continue to offer solutions. and I’m sure management will agree. I really want you to stay with the company. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. (says nothing) If I can’t get that pay increase approved right now. (says nothing) Or. Making Counteroffers (The “Give and Take”) 119 . it could help.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. I suppose I could get the promotion approved with the proper presentation. maybe we can talk about the promotion later in the year. Once he acknowledged that both items might be awarded sometime in the future. the company’s refusal to grant them now was a harder position to support. I must ask you to try to get both. Conclusion Mr. I would very much appreciate it if you could ask the company to reconsider. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. because I feel my future with the company might be at stake here. I could probably find a way to phase it in over a two. Okay? (says nothing) Let me check it out and I’ll get back to you. but a pay increase of that size might be more difficult. Promotions of this type are all but automatic around here. If there is some flexibility in your request. of course I will be glad to do that. and I think that I really haven’t been dealt with fairly. Well. and sell it to management that way. Susan’s silence prompted Mr.or three-year period. if management can see their way to giving you the pay increase now.
The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. My bosses might not have been inclined to expand the agreement anyway. by saying that she might run for Chair. She has not decided what she’s running for. Town Council Representative: I think you’re wrong. He decided to push for a simple renewal of the original terms. The mayor. The parties agreed to continue the previous terms of the agreement. Mayor) said that she was considering running for office. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. Also. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. and until she does. Town Council Chair). The term of the original agreement was nearing its end. The end of the agreement coincided with the election cycle for the two towns. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. has colored these negotiations. and were trying to settle on new and expanded areas when one of the elected officials (Ms.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . Mayor’s representative: No. her plans really don’t have any bearing on these negotiations. This is how the negotiations went: Town Council Representative: Well. but now they’ve got to ask what Madame Mayor’s motivations are. I don’t think it’s a problem. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. Mr.
and the agreement was renewed with no new provisions. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. He either had to end the session or figure out what to say to reengage the other side. Conclusion By remaining silent. Mayor’s representative: Well. Making Counteroffers (The “Give and Take”) 121 . I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. I’ll go back and tell Madame Mayor your position. I hate not to attempt to add some additional areas to the agreement. Town Council Representative: (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. In the end.represents have to worry that her desire to switch governments might taint the negotiations. I don’t know what her reaction will be. the Town Council representative’s position prevailed. the Town Council’s representative left the mayor’s representative with no room to maneuver.
I have a problem. Having an iron-clad demand probably won’t give you enough room to reach an agreement.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. She discovered that a rock barrier. The brook 122 50 Practical Negotiation Tactics . Your rock barrier has sent the brook onto my property and it is too close to my gazebo. Obviously. when one of you might say. “I have to have this. Madeline: Hi. had redirected the brook further into her property. in a small clearing. You will have to remove the rock barrier. She traced the brook back along its course to see why and where it had changed its path. she noticed that the brook came within 100 yards of it. Joe. 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. the brook and rock barrier are on my property. Neighbor: Well. It calls for compromise. or we will be at an impasse.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. One day. you should always enter the talks with a good idea of what you are willing to agree to. the brook was the property line separating her property from a neighboring farm. The reason I built it was so that I could protect my patio. 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. As was sometimes the case in these parts. The property came with three acres of forest alongside a meandering brook. Example 1 Madeline bought an old farmhouse outside of a small town. and began to renovate it as a home and a pottery shop. which an upstream neighbor had built. Madeline. after the gazebo had been there for about five months. Madeline built a gazebo about 500 yards from the brook.
She left room for a compromise. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. what I need is to protect my property line and my gazebo. Also. This will put these houses right next to me. I understand that. and allow the neighbor to protect his home. Madeline: But by diverting the brook. What if you removed the barrier for a short time. When she found out that this was not going to solve her neighbor’s problem. I’ve lost 400 yards of property on my three acres. Madeline was able to protect her gazebo. Neighbor: I’m sorry. but you’ve changed the boundary line of my property. 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. Making Counteroffers (The “Give and Take”) 123 . I can’t have the brook in my house. but I don’t know what I can do about it. restore her property line. It might not be necessary to make such a dramatic change. By expanding the range of options available to resolve the dispute. Madeline: Well. I couldn’t have that. if the brook is redirected. My neighbor on the adjacent farm wants to sell part of his property for a housing development. 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. Then. she widened her range of options. Madeline: Yes. I won’t remove the rock barrier.extended right up to my back door when the rain was heavy. you have not only threatened my gazebo. which enabled her to achieve her goals. 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. and return everything as it was. Neighbor: I can do both of these things.
Over the last five years. Everyone was afraid that the dispute would cause an impasse and a possible strike. with all wage and operations issues resolved fairly early.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. and we know that with this new contract term of five years. The projections for the next five years were that these costs would increase to about $1. and are willing to keep pension benefits the same. 124 50 Practical Negotiation Tactics .000 (which we reasonably should have expected to pay in premiums) in the pension account now.000 to cover the premiums for dependent coverage.000. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. But only a few of our people are close to retirement age. And we cannot afford that $1. we know that health insurance premiums might skyrocket. As best as we can tell. With long-term planning and investments.000 figure. The pilots want dependent coverage paid for by the company. Pilots: Look. Over the next five years. The airline industry is in a slump. the airline paid a total of $200.000 a year over the next five years? Company: Yes.000. This is just a cash-flow problem that your members have to understand. The company wants to trade paying for dependent coverage for better pension benefits.000. that would be the minimum increase.000. and the premiums for health care just keep going up.000. as it has always been. what they really need is for you to cover the costs of dependent coverage. you are taking a risk on the costs increasing. dependent coverage could cost us $1. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. Company: This could not come at a worst time for us. then the pension benefits overall will increase by $10.000. If we invest the $200. However. the company can make your pensions much better.000. This would be a better benefit in the long run.
000. so the decision to be flexible was a good one. The health insurance market stabilized. then those funds will not be available to invest in the pension plan.Pilots: But you do have the $200. If we can get two or even three years out of the $200. The $200. Company: If the company spends the $200. the company will not be expected to give us this benefit.000 actually carried them through four years. Company: Then it’s okay with us. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. Making Counteroffers (The “Give and Take”) 125 . if they were that high.000 the first year on the premiums. with a cap of $200. however. we are.000 available. or invest in the pension plan? Company: Yes. The pilots expanded the range of options. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. can we agree to a year-to-year agreement on dependent coverage. Conclusion The company was committed to limiting its exposure to $200. and the pilots knew what to ask for when the contract expired. by agreeing to let the company cap its exposure for dependent health coverage.000 to either pay one year of the premiums. It initially believed that the only option was to put that money into pension benefits. The dependent coverage is more important to us now than the pension benefits.000? Once the cap is met. that would be worth it.
I recall the day you drove it out of here. $45.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party. be sure to add up the total cost. Phrases such as “for only pennies a day.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami.000 car. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. it’s a deal? 126 50 Practical Negotiation Tactics .000 for a Volvo? I bought the one I’m driving for $19. Example 1 Car buyer: What. If you are on the receiving end of such a tactic. I love this car. what monthly payment did you have in mind? Buyer: More like $300 per month. I just can’t imagine the monthly payment on a $45.… (20 minutes later) Saleswoman: So. do you want to look at something else? Buyer: No. if I can give you this car with a $300 monthly payment. Buyer: Yes. Buyer: Way too much! Saleswoman: Well. and compare it to your strategic objective.” “affordable weekly payments. but that was several years ago. I guess it would be around $600 per month. Saleswoman: I’ll be right back. Saleswoman: With your 740 in trade.” and “low monthly rates” are examples of the salami tactic.500! Saleswoman: Yes.
Great! So. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. and added the trade-in. Let’s see. But my neighbor pays $39. do you want Disney? Yes. Instead of a three-year lease. You can do that.000 down. I can’t afford that much. do you want HBO? How much? $5. but let me see the numbers. I can’t discuss another client’s account.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock.” she had him—she worked around the $300 slices. Once the buyer volunteered that $300 was an affordable “slice. Making Counteroffers (The “Give and Take”) 127 . Saleswoman: Simple. and payout slices to reach the total price she wanted. down payment. with your car and $6. but what else must I buy? Only the basic service for $8. can’t you? Buyer: Yes.” She decided to cut the $45. you can get the Disney channel for only $5.00 per month for your service.99 per month. as promised.000 price into “slices” the buyer thought reasonable. I can afford $6.Buyer: I don’t see how you can do that.00 per month.00 per month. Sure. it will be a five-year lease. (looks at the numbers) That looks good.
00 a month. 3. Great. Yeah.00 per month was far too much. they asked about the Cartoon Network.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. and probably felt much better about the total negotiated package because it was presented in modest individual slices. What about the music package? Yes. we had that before. Okay.00 per month. The total is $38.00. Any other kids’ channels? Yes. Disney is for the kids! The sports channels are for me. and SI 1.99 per month. 128 50 Practical Negotiation Tactics . Conclusion The owner thought his neighbor’s service at $39. 2. but he agreed to six “salami slices” for a total of $38. Thanks. That’s $5. That’s another $5. and my wife wants the old movies. instead of one total amount.00! Why? Because he judged the per-slice price to be reasonable. But that’s all! Then we’ll hook you up on Monday. 2? How much? $8. I really want the sports channels.
Humor might not look like pressure. the traditional car salesperson might tell the buyer. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). It should be used with caution: It can end negotiations immediately. Tactic #33 (The Bluff) is a classic pressure tactic. pressure tactics should probably be avoided. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. but others will walk out the door. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. but in tense. When both sides believe that each has equally strong positions.m. today. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. which can be successful if the opposing team has two or more members who hold different views of an issue. angry negotiations. and it can destroy your credibility. Applying Pressure 129 . “I can only guarantee this price until 6:00 p. For example. In some cases. 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.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. 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). it is effective. however. so are you ready to make a deal? This might convince a few buyers. but it can be used effectively when one party clearly has an edge. turned off by the tactic. and the use of humor.
We’d hate to give it up. Your opponent will consider you untrustworthy and might even be insulted by your attitude. Don and Abby now use it less and less. together and separately. The two couples used the sailboat a lot the first couple of years. in fact. Lacey: I know. and we need to talk to you about how we can buy you guys out. Chloe and I would like to take the sailboat with us. Such exaggerations are easily revealed or uncovered. but Don.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Lacey. And we don’t want to be unfair. getting a divorce and each moving away (and would have no more use for the sailboat). Don: Wow. It 130 50 Practical Negotiation Tactics . I don’t know. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. Don: Absolutely. Abby really loves that boat. and we’ll be moving south in the next month or so. and they will weaken your credibility. Lacey: Don. When Lacey found out that his employer was transferring him to another city farther down the coast. but it is not a good idea to exaggerate what you are offering or what you are giving up. I think Chloe and I would be willing to pay more than just the money you guys put into it. 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. In the last couple of years. he and Chloe wanted to buy out Don’s and Abby’s interest. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. boat prices have really gone up. Lacey and Chloe didn’t know that Don and Abby were. Although I do think there ought to be some consideration for the two years you had use of the boat. big news! I’ve been promoted.
After all. he likely would have found himself in a stronger negotiating position. Abby told Chloe about the divorce and about how she never wants to see the boat again. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. (After Lacey and Chloe had a chance to talk. Abby is having this conversation with Chloe) Chloe: Abby. I was afraid something was going on when you all-butstopped joining us on the boat.is just about the most important thing we own. but separately. Lacey and Don’s negotiations changed considerably. Applying Pressure 131 . I’ve been thinking. and neither of us put much in for upkeep. I’m sorry. Let me talk to her. I have big news too. Abby: That boat. It’s about time now for some major investment. Don and I are getting a divorce. Chloe: Oh. which you would have to share if you want to retain half-ownership. Don: Lacey. big news!! Don got his promotion. the boat has depreciated. Don. Abby: Well. though it’s not so happy. I’ll be glad never to see it again. I’m surprised by your attitude. and we’re moving farther south.) Lacey: Don. We’ll be leaving here for the Midwest. Lacey: Cut it out. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. It just reminds me of how happy Don and I used to be. 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. (Around the same time. I thought you understood how important this boat is to Abby. and I’ll get back to you.
in fact. I can’t see how today’s numbers really impact the long-term profitability of this company. I’m telling you the stock price is having a huge impact on us already. the situation in the stock market is not good.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. Here’s how these negotiations went: Company president: Well. I’ll be looking to you to make some major wage concessions on this upcoming contract. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. The current stock price is the lowest it has ever been. Union negotiator: The stock price might be down right now. and that the economy is strong. And as you know. I think you’ll have to agree with me that wage increases in this next contract will not be available. the company president decided to use the stock price as a negotiating tool during the current union contract talks. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other. And while these fluctuations have little to do with the health of the company itself. in this global market. I’ll have to show them 132 50 Practical Negotiation Tactics . 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. I’m afraid that with this current information. Company president: Well. they will make their decision based on a review of the stock price that day. our production line changes at least three times a year. I’ll be going back to them as soon as next week. but this has been such a crazy situation.
the union checked into the Letter of Credit transaction with some experts in banking. If you put it that way. Give me your proposal for wage concessions. When negotiations resumed. If the stock goes up next week. The union became hardened in its position that the employees needed wage increases in the new contract. When the market took a swing up during the negotiations. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. Company president: All right.that we’ve cut expenses to counter the losses in the stock market. So. we’d like to reopen talks on next year’s pay increase.) Union negotiator: I’m sorry. the company’s position was weakened even more. he lost the trust of the union. here’s what happened. okay. they would do a thorough analysis and look at the health of the company over the long haul. but I checked it out and it’s not totally true. let’s talk about it. and the union ended up with a substantial increase in their contract. Conclusion Because the company’s president over-emphasized the impact of the market on the company. Let’s get back together next week. They told union officials that it would be very rare for a bank to make its decision solely on stock price. We think this company is very healthy and can withstand the temporary downturn. but your proposal to cut wages is just not going to fly. Union negotiator: Well. and I’ll have our people look at it. (In the interim. Applying Pressure 133 . Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. no concessions! In fact. Union negotiator: I know that’s what you told me.
Tactic 33: Bluff! Bluff with caution. The couple had not discussed marriage. Sara said she saw you at the movies with Charlene yesterday. I really hate it that you chose to see the movie with Charlene. She knew that if she made such a demand and threatened to leave him unless he made a commitment. they are bluffing. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. I called Charlene and she was available. We don’t have that much free time together. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. This can come back to haunt you. are you? Christy: I don’t want to be. Charlene. it might backfire. Both of them were still in graduate school and worked full-time. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. If you subsequently agree to begin talks again. I guess I’m just surprised. Example 1 Christy and Tom had been dating for about a year. and I really wanted to see the new Lenny Bruce movie. and they really have no intentions of doing so. either. so their “free” time was very limited. yeah. but I really am. but Christy thought the relationship was heading in that direction. you will have lost credibility with your opponent. Poker players know all-too-well-that bluffing can be very costly. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. Here’s how the discussion went: Christy: Tom. I knew you had a class. and she didn’t think Tom had. You’re not upset about that. Tom: Oh. 134 50 Practical Negotiation Tactics .
I won’t go out with any woman friend. I just thought of her because I knew you weren’t available. She convinced Tom that her feelings were strong. I need to have your commitment that you won’t do that. Tom: Okay. If that’s not possible. Actually. if you can’t make that kind of commitment. It is. It really wasn’t a “date”—we just saw the same movie together. so he didn’t call her bluff. Applying Pressure 135 . Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Tom: I have friends of long standing who are women. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. It’s made me realize that I want us to have an exclusive relationship. then I’m afraid I want us to stop seeing each other. I certainly don’t want to lose you. Tom: You’re serious? It’s that important to you? Christy: Yes. but very little progress had been made. Conclusion Tom didn’t want to lose Christy. I’m willing to risk losing you. Christy: I just can’t see it that way. and at first he thought she might bluffing. I’m not “dating” anyone else.Tom: She’s a friend who happens to be a girl. If Tom had “called” Christy’s bluff. The union negotiators. He believed she was sincere. she paid her own way. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. he had to make a commitment or risk losing her. 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. Since he wasn’t sure about that.
This is something we just have to have.believing that Nexon would not risk a strike. 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. then all of our other demands will change. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers. Nexon: I’m sorry.) 136 50 Practical Negotiation Tactics . Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. Union: You don’t seem to understand. This is a critical issue to us. Union: You’re wrong. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. Nexon: I’m just not prepared to give you one. Here is what happened at the next negotiations session: Nexon: I’m sorry. Why don’t we put this one aside for now. Another bargaining session was scheduled. we want the part-time workers to apply for and fill fulltime positions as they become available. If we’re not able to reach agreement on this. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. Second. but working without benefits is simply not acceptable. And I don’t believe you’re going to go call for a strike over this. Many of our union members who are working part-time hope to work full-time. First. Nexon: We’ve got lots of issues to discuss. we’re really prepared to go the distance on this benefits issue. We need some agreement on this today. We need an answer today. it will cost too much. much less today. We’re not going to reach agreement on this at all. or else we’ll be asking the membership to strike. The union members ended up voting not to strike at this time.
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
Since the heating and air conditioning company held no leverage over him. It is sometimes referred to as “pressure bargaining. the guy was in no position to dicker over the price of the repair. He was at the mercy of the company that could install an appropriate unit the fastest. On the other hand. he was able to successfully bargain for other services.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. because this is the busiest time for that industry. its union has the advantage in the weeks just before Christmas. Unions can strike at any time to achieve their goals if they have some leverage. Since his toilet had overflowed and water was continuing to run all over the floor. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. Try bargaining with a plumber! This homeowner. The same kind of thing happened a couple of years before that: In the middle of August. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. when one side has “leverage” over the other. while the other is not—that is. such as the advantage of time. his air-conditioning unit went out. there were times when there was no pressure and no emergency. and was forced to pay whatever they demanded. Example 2 Let’s face it: Sometimes one party holds all the cards. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. If the employer is a shipping and express mail company. The owners of professional sports Applying Pressure 141 .Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. not blessed with many household repair skills. once had to call a plumber in for emergency repairs. for example.
either individually or through collective bargaining. This gives it the upper hand in negotiating with employees. When the employer proposed adding duties to the job classifications. despite strong resistance. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. The employees had no power to resist the demands of the employer. but before you choose such a tactic. A note of caution: Circumstances in one round of negotiations might give one side an advantage. he didn’t have to be flexible because the employees believed that they had no alternatives. What goes around comes around. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. Other employers find themselves in situations that actually reverse the leverage (when.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. (Team owners are notoriously unpredictable. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. but they are less willing to negotiate several months ahead.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. then you are in a position where you can set reasonable demands on wages. will what goes around come around? 142 50 Practical Negotiation Tactics . there are likely to be long-term repercussions. it is the union’s turn to hold firm on its demand). benefits. if the unemployment rate is high and jobs are few. If you have a special skill that an employer needs and few others have that skill. etc. the employer has the advantage: a supply of jobs. low employee motivation. can suffer repercussions in the form of sabotage. On the other hand. consider whether or not the two parties will likely meet again in the future to negotiate. When one side places undue pressure on the other side. and other undesired outcomes. however. If so. for example. unemployment is low and jobs are plentiful. she has leverage and can more likely hold firm on her price.
You’re driving me nuts. Andrea: The doll is mine. but use this tactic judiciously. Susie: Okay. and I can’t stand it. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Andrea had taken them off the doll. and Susie hid them under the seat. Andrea. Just because you saw it first doesn’t make it yours.Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. you have it this part of the trip. I took it out of the box. This time. Their dad tried to reason with them. Almost from the beginning of the three-hour drive. Example 1 A father and his two daughters were on their way to visit the grandparents. and here’s how the “negotiations” went: Dad: You two stop fighting. Why? A sudden surprise can disrupt the dynamics of a negotiation. I can’t drive if you keep this up. (Their dad pulls to the side of the road and turns to face them in the back seat. the argument is over the doll’s shoes. and Susie. We’ve got a long ride ahead of us. Tell Susie to let me have it. because you will probably only get to use it once. Susie: The doll belongs to both of us. Consider making a suggestion or a proposal that completely surprises your opponent. the little girls began to fight over the doll. Just share the doll. The doll can be shared. the girls had been fussy.) Applying Pressure 143 .) Dad: Stop it right now. About an hour into the drive. Andrea: Okay. you have it when we drive home. (In a few minutes. Mom said so. the fighting starts up again.
Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. He grabbed it and threw it out the window. I think I have acted properly. I want the shoes. Both Andrea and Susie were so shocked by their dad’s action. but nothing else up to that point was working. so it was worth the risk. they didn’t say another word. 144 50 Practical Negotiation Tactics . in fact. charging that they breached their duty in their handling these funds. The defendants contended that the auditor’s actions were politically motivated. and that they had invested and spent the tax dollars wisely. Susie: Daddy didn’t say anything about the shoes. and reached back for the doll. The local newspaper was prepared to urge the auditor to end the litigation. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. to no avail. he slowed down. Finally. The auditor asked to meet with the editor to explain his position. He initiated the litigation against the local school board members and several banks that invested the money for the board.Andrea: Give me the shoes back. Daddy said I got the doll on the way to Grandma’s house. Dolly has to have her shoes.) Dad: Now there’s no more fighting over the doll. (They continued to argue and whine and pinch each other. She can have them later. Dolly doesn’t need shoes on in the car. Conclusion Dad’s use of a “surprise” tactic was extreme. The tactic was so successful. The litigation itself had been going on for more than three years. Dad tried correcting them a few more times. at great expense to the auditor’s office and the school board. and I hope I can convince you of that. 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.
This morning. They’ve been making that same argument from the beginning. Applying Pressure 145 . rather than drop the case. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. but recommended that the parties reach a settlement. but actually superior to some other entities you supervise. but I have to warn you that from what I’ve seen and heard so far. perhaps you should just cut your losses—and just drop the suit. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. Auditor: I appreciate their arguments. the bank would not have done that had we not proven our case. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. From what I can see. Auditor: Well. I really think the community would be better off. Editor: Well. Your reporters will probably want to follow up on it. I guess we’re finished here. one of the banks settled with my office. this case needs to be dropped. Here are the papers. Conclusion The editor wrote an editorial urging a resolution for the good of the community. Obviously. That’s really the reason this has gone on so long. We believe the other defendants will soon follow suit. They are very persuasive that this is just a political battle. Thank you for coming in. there’s just nothing to back up your allegations.Editor: I’m certainly willing to listen. I think I have something here that will convince you otherwise. and it is costing your office money and good will. Editor: Well. as a matter of fact. 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. and a significant amount of money will go toward the tax fund.
Tina and their son Kevin are against the idea. I know we’ll all enjoy it. 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. night after night. Kevin is against it because he is turning 16 years-old soon. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. I want to talk about a car! Mike: It’s really not one or the other. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Kevin: So am I. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. especially Kevin. try to focus on that subject or address that member directly to get them to be more amenable to your proposal.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. I can remember spending hours playing with my friends and family when I was growing up. If the other side involves more than one person. Dad. Tina: I’m really against this pool table idea. Mike: I know. they’ll be mobile! The last thing I want is for them to be out cruising around. you might be able to dilute their power by identifying their different interests and addressing them separately. I’d 146 50 Practical Negotiation Tactics . and a car is more important to him than a pool table. Kevin: I don’t really care about a pool table. but I think it will get a lot of use. although getting your license and getting a pool table are connected. Mike knows he needs to get either his wife or his son on his side.
What happened? Applying Pressure 147 . Once Mike convinced Tina of the idea’s merits. some. 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.like them to hang out here more. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. Tom. I thought we were making real progress. Wylma: Tom. I’m surprised. and Kevin and his friends use it often. Tina: Well. only Kevin did. Here’s how the negotiations went. she joined his side of the debate. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. But I’m not going to hang out here all the time. Conclusion Mike found an argument that divided Tina and Kevin. 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. the head of the union negotiating team. Kevin. Instead of both opposing the idea. Mike: I really do. A pool table could attract them here. A number of contract changes have already been worked out and Wylma. don’t you think you guys would use it? Kevin: I guess so. She noticed that Jim (another member of the union’s negotiating team. They bought the pool table. received it without comment. the chief negotiator for the company. then maybe it’s not such a bad idea. has just presented the company’s initial wage offer.
forcing them to reconsider their demand. you’ve heard our demand. When the negotiations began again. these are our actual accounting figures. these are accurate. Your demand is totally unreasonable. Wylma: Let’s take a break. but he added some workplace changes that Wylma was comfortable negotiating. Tom had reduced his wage demand significantly. Right. Wylma: Tom. you certainly are aware of our financial situation. Wylma: Jim. Jim? Jim: Yes. This is just what we think is fair. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. as Jim can point out to you.Tom: Wylma: Nothing happened. Let’s start again tomorrow morning. I think you need to rethink your demand. you’ve seen our sales projections and production costs. But Tom. Wylma distributed copies of financial data that showed the company’s current condition. (When they resumed. Do you think this is reasonable? Jim: (looking uncomfortable) Well. 148 50 Practical Negotiation Tactics .) Wylma: Now Tom. Tom: We don’t think so.
I don’t feel Christmas in the way I used to. get over it. Madison: Okay. We can’t afford to buy each other things we really need. but as the children grew up and had families of their own. When all of their children were small. Ever since Mom and Dad died. so what’s the point? I don’t need another tie! Madison: It’s not the gift. Example 1 The four Jones kids grew up. but it is really important to me. Tempers flare and people say things they shouldn’t out of anger or frustration. Stay alert and watch for clues that a negotiation is about to get out of hand. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. married. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. Humor often works to break the tension of the room. 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. so pressure grew to draw names and exchange gifts. but the thought that matters. You are almost 40 years old. the oldest and youngest Jones children. some of the siblings decided they liked giving presents to one another. That will just make a bad situation worse. I want to say something. and had children. Applying Pressure 149 . so you can find a way to quickly neutralize it. it was easy to agree on just giving presents to the children.Tactic 38: Break the Tension Tension is inevitable in most negotiations. and it makes me very sad. especially between Madison and Cory. Sometimes the argument got heated. but it should never be at anybody’s personal expense.
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.
Okay. One day. who was outside with older children. Julie wanted to play “dress-up. or maybe tomorrow. how about going out to the yard for a while? You can swing or play ball. the individual might be afraid that the exchange isn’t equitable). was ready to color. I want to play “Prince and Princess. the exchange will be between things of equal value. Both of the little girls liked to play ball when they were outside. 154 50 Practical Negotiation Tactics . If there is resistance to compromise. Then we can color. 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. The day-care worker wanted to take them outside for a while so that he could visit with his friend. When that point is reached.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. C. (In a successful negotiation. I want to play “Princess” and I want Dara to be the “Prince. Mr. it is better not to compromise.” Can I color now? You said we would color later. At some point.: Julie: Dara: Julie: Girls. don’t you want to play? We could color before your mom comes. If I can be the Princess.” Dara. Example 1 Julie and Dara both attend a local preschool. they were the last children left in the playroom for the remaining two hours of the day. Dara. not the Prince. but since the other children in their room were not there.” but she needed Dara to play with her. however. they would have to play ball with older children. and that doesn’t happen without compromise.: Julie: Dara: Mr. 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. C.
The owner decided to try for a variance. the owner had to supply additional parking. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. neighbors became concerned about the changes to the mall. 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. Mr. you can come back in and play “Prince and Princess. When his variance application was made public. Conclusion The children stayed inside and played dress-up. 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. the parking lot will start to look trashy. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. however. and they still had time to color. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. C.” No. failed to offer the children something that was as important as the plans they had made. We want to play dress-up and then color.Mr. or apply for a variance.: Julie: Hey. The owner and a small group of neighbors met to talk about these problems. and teenagers attracted by Making Progress 155 . According to the city’s zoning laws. They did all the compromising they were willing to do. C. wouldn’t you like to go outside first? After you swing for a while or play ball. The existing parking lot didn’t meet the current parking standards for that size theater. We don’t want to go outside.
the north lot is used more. and break in his door. only when that lot is full would cars come around the mall and park on the south side. the closest parking to it is along Elm Street. the south parking lot has not been used much. not having direct access to the south lot from the street would be unworkable. but it’s not ever full. I’m afraid. Not having in and out traffic to the south of the mall is just not very practical. We hope you’re right. as you said. We’re just not convinced. if I agree to move the theater entrance to the south side.the theater will start to hang around and maybe wander around our yards at night. driveways on the south side of the mall are along the east and west side of the parking lot. Right now. You could have all of the traffic enter from the north lot. Right now. Many of our homes back up to that lot. So. and we’d like to keep it that way. We’d really like to block off that cut-through and have the theater face the south. I could put a privacy fence along the east and west—at the backs of your yards. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. And. The neighbors: Owner: 156 50 Practical Negotiation Tactics . I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. even though I’m not adding any parking. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. lights in and out at night can be very annoying. With the Comedy Club and the grocery store on that end. What if I changed the entrance to the middle of the lot? That way. In fact. We’d like you to prohibit cars from entering or leaving from the south lot. with your plans to put the entrance of the theater on the east side of the mall. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley.
Agreed.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. But you’re going to have to have some kind of security as well. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. set back a driveway width. the neighbors reported that they were very happy with the way it all worked out. put a privacy fence along both the east and west sides of the south lot. The compromises were what everybody could live with. and they discouraged patrons from parking on neighborhood streets. Conclusion Both sides had to give up something on certain items in order to reach agreement. add a new entrance into the south lot. If the fence was set back the width of a driveway onto your property. then will you agree not to push for increased private security? Yes. And a year after the theater opened. 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. Teens can form into gangs if left unwatched. If I agree to move the theater entrance to the south. there could still be access from the street to our garages—just not to the main parking area. Making Progress 157 . The fences created a buffer from the lights and noise. and make sure the parking lot is kept clean. however.
m. and that as angry as they were. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. Mrs. Present your position forcefully. This gives you an advantage. 158 50 Practical Negotiation Tactics .m. Joan: Hi. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. They might even start to underestimate your negotiating skills. she just didn’t think it was a serious problem. Lonely: If you’re here to complain about my Rocky. Example 1 Joan was new to the neighborhood. If your opponent is aggressive or angry. and I just moved in next door. but going out of your way to be friendly is an especially helpful tactic. and pleasant always enhances one’s ability to reach an agreement. incident was usual or unusual. The dog was Mrs. just forget it. because you are the one to set the tone for agreement. She didn’t believe her neighbors ought to complain about the barking. respectful. and what kind of complaints might have already been made. Joan was already pretty tired. so her neighbor’s barking dog came as an unpleasant surprise. Joan decided to at least try and talk to the neighbor. Take advantage of any confusion about your friendliness to try to get them to agree to some of the easier things you have to work out. but be friendly. they had gotten nowhere.m. Your opponent might give in readily. professional. Joan had a new baby. and because she was hard of hearing. and started to get upset.. Lonely. Close your windows at night and don’t listen. thinking that you will be just as easy to work with on the sticky issues. Lonely’s only companionship. and didn’t stop until 6:00 a. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. Mrs. I’m Joan. She learned that everyone in the neighborhood had complained at least once.Tactic 40: Be Friendly Being polite.
Do you think his age has contributed to some of that? You know. sure. Lonely again. I might have to talk to you about Rocky. I know that some of these people around here don’t like him. Here’s my little angel. (Joan’s sleep was disturbed by another night of barking. I’ve got a friend who is a veterinarian. Lonely: Joan: Mrs. I sure hope he starts sleeping through the night soon. Well. I’ve only got my Social Security. I can’t pay for something like that. is a really sweet dog. not at all. No. but she took her baby and went to visit Mrs. I’d like to introduce you to my new baby. Maybe I could come back tomorrow and bring him? Oh. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. by the way. The barking at night has been mentioned to me. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. Mikey. When he does. Lonely: Joan: Mrs. I’ll see you. don’t worry about that. then. He’s a real comfort to me. I just wanted to come by and introduce myself. Lonely: Joan: Mrs.Joan: Mrs. Who. I stopped by and visited with him over the fence this morning. How long have you had him? Almost eight years now. Well. no. Lonely: Joan: No. isn’t he cute! He’s a handful. I guess so. Lonely: Joan: Mrs. Making Progress 159 . it’s probably because they just haven’t had the time to get to know him.) Hi. He’s been keeping me up at night. I guess that would be okay. too. Why. I need to get the baby home. though.
After Joan’s veterinarian friend visited with Mrs. Joan took up contributions from the neighbors. The barking all but stopped. I think that if you could have let me know ahead of time..S. recognizing that the layoffs would be an issue in upcoming local elections. that the press got hold of the story of our company’s activities before we could call you to let you know. and Mrs. Hearing about this from the press obviously puts you in a very embarrassing situation. he prescribed medicine that gave Rocky a more regular sleep schedule. Here’s how the meeting went: Company ZZZ: We’re very sorry. Lonely didn’t have to pay for the medicine she could not afford. Under its new corporate structure. U. of course. Lonely’s needs and arrive at a workable solution to the problem. It’s very difficult to make a move of this type without having it leak out.Conclusion Joan’s friendly approach enabled her to understand Mrs. They anticipated that it would be an unpleasant meeting. overseeing a factory in Mexico and selling products in the states. the mayor called and asked for a meeting with Company ZZZ officials. that’s very understanding of you.A. 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. Mayor: (very friendly) I understand how these things happen. Lonely and Rocky. 160 50 Practical Negotiation Tactics . Company ZZZ: (surprised) Well. agreed to meet with the mayor. Company ZZZ. its 150 management and sales employees could continue to work in Happy City. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. When he heard the news on the radio. you would have.
We just haven’t heard anything yet. Mayor: Great! Let me know when we can talk again. Making Progress 161 . By the way. This strategy worked. Unfortunately. They need a really good deal on the plant price. and the mayor was reelected. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. We recognize that your new corporate owner is a large company located in Malaysia. Would you be in a position to talk to me about such a deal. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. Mayor: Please let me know as soon as you can. or would we need to involve the Malaysia group? Company ZZZ: Certainly.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. Company ZZZ: I’m not sure what to tell you on that. and I want them to know that. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. the city has a potential buyer for your plant building. 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 buyer is a “disadvantaged business” we have been working with for some time. the 150 management/sales jobs did end up moving to Mexico. You’ve been very understanding about this. so we need to understand how we can affect their decision on keeping an office here. Many laid-off employees did indeed find new jobs at the plant. because I’d hate for us not to make an appropriate pitch to them.
Alexis knew this was not fair. or used to pressure the other side to agree to certain demands. Fred Adams. age 15. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Alexis then played the tape for her father.00 to spend. 162 50 Practical Negotiation Tactics . Susan denied it. are talking about a possible settlement of the issue. Alexis. were on vacation with their parents in Myrtle Beach. Michael Wood. age 14. He asked his elder daughter about the arrangement. They might worry that the tapes will be made public or given to others. until Susan said they would evenly split what they bought.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. the younger sister. Alexis agreed. The two sisters had saved up a little money so that they could buy souvenirs.00. but Susan had only $20. Example 1 Susan. and Jones. The effect on the other party might be even more substantial if lies. or simply “bad faith” methods have been used by the other party. Susan understood the impact a tape recording can have when it reveals a lie. She borrowed a tape recorder so she could ask her father if this was a fair deal. this time in front of a hidden recorder. Susan repeated her demand. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. threats. Conclusion For the first time in her life. Jones’s supervisor. had $40. Then he played the tape. thus becoming a source of embarrassment. the investigator. who was disappointed to hear that she might propose such a deal. and Alexis. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. South Carolina. Somehow. the accused.
he also lost his negotiating position.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again.” meaning something other than copies? No. I think I can write my recommendation. So. Starr. Jones. to quote you. I simply asked her to make copies for me as quickly as possible. (a long pause) I want to see my lawyer. Jones suddenly realized that his strategy would not work. Appleton both claim they saw the incident and will testify. stares. Mr. And please describe your general manner. He failed to think about what might be the next step. No one could have possibly misunderstood your intentions? No reasonable person. Well. So you refuse to repeat the answers you just gave us? Yes. You never touched any part of her body? Not even accidentally? No. exactly what you said to Ms. Ruiz and Ms. “Do what I want. I’ve brought a tape recorder with me. But by refusing to repeat his answers. Stuart. and gestures did not have a single hint of sexual implication or innuendo? None at all. And you did not threaten her job if she did not. Mr. Conclusion Jones had knowingly lied when he denied the charges. 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. you are aware that the next step in this process is to ask witnesses to come forth. Making Progress 163 . Your request.
which certainly is large enough (he naively thought) for two young children to easily share.” the divider. Maria and Roberto: No. is usually careful about dividing the object into two equal parts. take this knife and slice the Snickers into two halves. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. with the remaining part going to the person who did the dividing. because you did the cutting. Their dad instructed them to share the candy bar. 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. of course.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. Oh. Maria. Realizing the potential of getting the “smaller half. The second person then chooses which of the two parts they will receive. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . one person is given the task of dividing the object(s) into two parts. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. the classic “split and choose” tactic might be the best way to settle the issue. Roberto will get to choose which half he wants. Many of us learned this one from our parents: After two people agree to the strategy.
according to county deed restrictions. They all have a great view and are equally desirable to build on. Clarence and Archie. They have a recent appraisal that values the property at $150. that sounds fair. Making Progress 165 . even children. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Clarence: Right. Archie: I really don’t care either. Archie: That’s true. That makes them more desirable. Clarence agrees to divide it. Archie: Here is the map. Deal? Clarence: Sure. I don’t really care which lakefront lots I keep. The problem is that one of us will get four lakefront lots and the other will only get three lots. I propose that you divide the fourteen acres into two parcels that you believe are about equally desirable: one parcel with three lakefront lots and the other with four lakefront lots. but is not sure how to arrive at a fair split. Lots must be at least one acre to be developed. jointly purchased fourteen acres of lakefront property several years ago. Give me the map and a pencil.000. Then I will choose which parcel I want. so we should be able to divide the property fairly. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. Example 2 Two friends and business partners. and wants to divide it into two separate parcels. There is only one place for an access road that must serve all lots.Conclusion When two people desire the same object and it is something that can be divided in some way. both parties. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. Archie is ready to build a retirement home on the property. quickly recognize the fairness of the divideand-choose method.
and both men were happy with the arrangement. Archie chose the parcel with the three lakefront lots. Which would you have chosen? 166 50 Practical Negotiation Tactics . and the second parcel with four lakefront lots and one other lot.Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots.
” Under store policy. However. “Okay. he also set up all of the furniture in a second-floor bedroom. His tactic was to throw in a “nickel” in order to make lots of “dollars. supposedly the bargainer in the household. 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 .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. Jason was having a hard time getting the salesman to lower the price. attach legs. Her husband Jason. etc.” Many people have witnessed or used this effective negotiating tactic. is expected to dicker over the price. With a great deal of effort. miles from their home. we’ll take the suite if you’ll throw in free delivery and set up the furniture. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. Conclusion The amount the couple spent was fairly large. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. delivery was limited to a small geographical area. What started out as a single issue is now a combination of a major issue and a much smaller issue. Brenda did her part when she said. so the salesperson delivered the suite himself. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).” thus extending the scope of the negotiations. and the delivery carrier doesn’t set up mirrors.
In one case. so be prepared to withdraw the nickel and dime item at the hint of trouble.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. “Okay. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.important item. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. 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. This experienced bargainer said. we’ll agree to Health Plan A with another ½ cent on the pension fund. 168 50 Practical Negotiation Tactics . it can be a dealbreaker. At the end of negotiations. If one party misjudges the situation.
thus creating the impression in others that the good qualities they see are present all the time. This creates what is called a “halo effect.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Kathy: I suggest we take turns choosing which of these things we want. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . People tend to make an effort to put their best foot forward. decision-making meetings. but they are two pieces of furniture. Donna: No way! These are the last two pieces of furniture. I’ll take the color TV. and all the rest is small junk. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. Donna: Okay. Kathy: Then I’ll take the couch and love seat. Kathy: But they are a matched set.” 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. or knowledgeable. and performance evaluations for people to come across as likeable. You can go first. Kathy: I’ll take the pool table. Donna: They match. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. trustworthy.
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. with a record of labor involvement that included three recent strikes. and if the bar and stools should be one item or two. Good idea. I want the love seat. and ask him if the couch and chair should be one item or two. Let’s call Johnny Ryan.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. Example 2 During a heated labor negotiation. He’s our cousin. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. The union negotiators. (Pause) We’ve got to settle this today and get this stuff moved. What for? Tell him the situation. He might or might not have also been a good arbitrator. Johnny had the “halo” of an honest person. I want the stools. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. 170 50 Practical Negotiation Tactics . what can we do? Give me the couch and love seat! No. I trust his judgment. and he has always struck me as an honest person.
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. He said he believed that it would work as presented by management.simply did not trust the management team. but the power of the so-called halo effect was great. the former union president. He solemnly told the union negotiators that he had been hired to review it. The union accepted the proposal. even if the proposal appeared to be valid. thus bringing the negotiations to a conclusion. Boston was widely known as a totally honest man who speaks his mind. Boston went to the negotiation table with the management team. The teams took a weekend break from the stalled negotiations. On Monday. and that he did. They might have stretched his halo farther than his expertise and experience warranted. Two weeks later. when negotiations again stalled on a retirement plan issue. without any reservations. the consultant did not speak. the management team hired Sam Boston. the city management again hired Boston. as a consultant to review their proposal. This time. Making Progress 171 . During the break. but his mere presence caused the union leaders to accept a management point as valid.
$237. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations.000 under the listing price! We realize that. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000. Sometimes.000.000. $235.000. and we are countering with an offer of $250. but the right facts presented at the right time can chill or astound and completely turn things around. but we feel that it’s a fair offer.500.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. but you’ve priced it way too high. The owner. This offer is for more money than any four-bedroom houses on this neighborhood list. What? That’s $35. They sold for: $225. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. has owned the house for 24 years and is downsizing to a condo. $229. and $237. I’ll get back to you. (Next day) We’ve reviewed the records you’ve produced. but the key is to gather facts that you might need—not just the facts that you will need. We love your house. They believe it is overpriced. 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. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. the other party will ignore or refuse to believe the information.000.000. Sam Jones. Here’s a list of the five that are about the same size as yours.
Making Progress 173 . Hatfield: My staff has done a lot of research. You can’t pay more than $1. I’ll get called on the carpet.600 for a computer. if other departments have ignored the policy. The last 20 were over $2. That’s the bottom price. Here it is.000. Hatfield: While I was at purchasing. We accept.400 each. He found facts that supported his position. Well… We have a written counter of $245. Conclusion Hatfield had anticipated what his supervisor’s position would be. Order the new computers. No one can go over $1. who was not particularly knoledgeable about real estate.600 unless the company president approves. Supervisor: Well. We’ve talked with purchasing and we have the authority to buy seven for $2.000 each. and we know that only this model will meet our needs. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. and did his homework. and wisely chose exactly when to present them in order to make his point. Example 2 Supervisor: You know the policy. Conclusion The Joneses had based their asking price on the advice of a friend. I asked for a list of all new PCs bought this year. Supervisor: If I okay this purchase order. I’ll be… Okay.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. let’s not worry about it.
I trust you. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. I can’t check out these four books? Jenny (Librarian): That’s the policy. I can do that within the rules. They can help you identify or better understand what the other side really wants. The effective use of probing questions can help achieve a favorable settlement. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. Maureen: Well. Otherwise. but I don’t set the policy and I can’t make exceptions. but you don’t want to jeopardize your job? Jenny: Yes. Example 1 Maureen: What. yes. If you trust me. I’m sure you would not. Would I do that? Jenny: Maureen. Maureen. A maximum of three books can be checked out to a person at any one time. and two are for my husband. and they would all be unavailable to others. reveal misperceptions or lack of knowledge about positions that can be corrected. But I can’t break the limit rule—it is an absolute rule here. I want two of these. you know me. some people would have forty or fifty books out at the same time.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. can you check out two on a card for him? Jenny: Well. Maureen: Well. Maureen: So you trust me with the books. 174 50 Practical Negotiation Tactics .
If that data ended up in the wrong hands. we can’t do that. Babu. are you sure I can’t get your information technology people to give us direct information on product sales? No. But this forces us to make decisions without complete information! Yes. Mary and Kenzie? They are 2-3 pay grades below us.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. Making Progress 175 . Why? Some policy? Yes. Security? Right. Can you get me the number? Sure. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. Brooks. Who does have access clearance? Mike. Mary. Sue. and Kenzie. They say it’s a security issue. Jay. it could kill us. What’s the policy number or date of approval? I don’t know. but it’s because you don’t have access clearance. and they don’t even have a use for the sales data. (Next day) Do you have the policy about giving out product sales information? No. I couldn’t find anyone who knew it.
… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. I’ll sign now.P. 176 50 Practical Negotiation Tactics . I’ll get it for you ASAP. His probing questions turned up a critical fact. that’s been the policy since I’ve been here. Once he discovered that employees in lower pay grades had access clearance. Jack: Here. Jack was able to receive clearance as well. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. if we can have access? Mark: I guess so.Mark: Well. When can I get the data? Mark: Today. Jack: Can you ask your V.
Stage 7: Reaching Agreement he final stage! It might come minutes. or even months after the first offer is presented. When multiple issues are at stake and most have been agreed upon during negotiations. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. this process can easily result in a final settlement. this tactic can produce an agreement. 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. 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. 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). In this process. 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. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. When two parties believe they have an oral agreement. They bring it out when a dispute arises. T Reaching Agreement 177 . If friends or neighbors need to settle something but prefer to avoid the negotiation process. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. and the classic Walk Away (Tactic #48). the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. hours. and the child learns an important lesson about life.
one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . off-again discussions. “I’m thinking of agreeing to your plans for vacation. Example 2 Negotiations can take a long time and incorporate many issues. They both have stressful jobs and look forward to their annual vacation together. Larry Snyder gets bored staying in any one place for many days. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year.” Conclusion The husband was so excited about visiting Washington. His wife had carefully planned her exact “premature” vacation agreement. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. 2) allows the other side to feel the release that comes with completing the bargain.C. The bargainer skillfully 1) begins the congratulation sentence “I agree…”.C. After days and weeks of on-again. Let’s do go to Virginia Beach and Washington D. D. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. 3) and adds one last key demand to the congratulation sentence. but his wife Nancy likes to stay put and relax.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. As he hugged her. She said. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. Nancy brought up the subject of vacation again after dinner.
but the other side continued to ask for 60 days. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. My team had convinced me that doubling the time frame would create a real problem on the shop floor. There were grins and handshakes coming from the other side.) Here’s what happened: Bob: I knew that the other side was similarly harried. but also that they sensed the weariness of my team. he turned on a large warm smile and extended his hand to shake. but we agree to everything in your final proposal…” Members of my team shouted hooray. We all knew that it could come down to agreement or strike. fit. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. It was so close. as the negotiator came closer. The celebration had begun. My team was afraid we would not even come to an agreement. but held firm on remaining operating principles.” Bob: Ted timed this perfectly. “…as long as you give us a 45-day probation period. Ted said. Therefore. we made some small concessions on financial matters. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with.almost willing to accept any deal. One of the best pieces of negotiation advice is to remain fresh. When the chief negotiator emerged with his team and headed toward my team. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. However. (This is a bad position to be in. but acceptable. The old agreement specified a 30-day period. In our last offer. “It was hard for us. One operating issue involved the probation period for new employees. Reaching Agreement 179 . and rested. I felt the tension in the room. symbolizing that he was agreeing to the entire final offer. because it makes you pretty vulnerable.
However. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. the negotiator skillfully finishes his words of congratulations by inserting one last key demand.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 .
Sue: I remember you. right? Jay: Yes.) Jay: Sue. Jay. He really likes it. The next morning. how did you like it? Jay: Okay. Your opponent will have to either let you go and run the risk that things are really over. if I roll over the lease to a Highlander. and the lease on my Avalon is about to expire. I don’t want to negotiate. Whether you are really bluffing or you are serious. but his Avalon has been a good car. Jay: Hi. I like it. be sure you think this through beforehand. You had time to assess my car. what can you do on a 36-month lease? Reaching Agreement 181 . and he can simply buy it when the lease expires. (Vahaly drives the new Highlander home. a veteran salesperson. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. the following exchange occurs. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years.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. here are your keys. You bought your wife a new van just last year. all from Sue Wilson. but my Avalon is a good car. Jay. My name is Jay Vahaly. Sue: Well. too. or go after you and perhaps make a new concession in order to get you back to the table. but I thought I might want to try a new Highlander. He stopped by Pembroke one day to look at the new models. I’ve worked with you before.
Please go back and work out a lower lease payment. I thought I’d get a fair deal. I’m disappointed. at most. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. they came down to $199 more on a thirty-six month lease. These Highlanders are hot items! Jay: Well. Jay accepted.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Jay. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. $100 more. Jay. but 182 50 Practical Negotiation Tactics . a successful musical instrument sales and rental store. (15 minutes later) Sue: Well. Let me try again. They’ve talked about retiring in recent months. He effectively used the walk-away tactic to let Sue know that he was firm on the price. Sue called him as soon as he walked in the door and offered another $50 break on the lease. Jay: What? I was thinking the lease payment would be. Sue: I’ll try. He was prepared to keep his Avalon if the lease was even $1 more than his limit. Jay—wait. (He walks away) Sue: No. Sue: Sorry.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. (Jay got in his car and drove home. That was the figure he was looking for.
go back to your office. Michael Roberts. You rejected it. One day. Judy: Larry. and I only need your building to own it. let’s eat lunch.) Larry: Michael is here again.5 million. What do you think? Judy: Larry. and I’m not interested in less. Larry: Michael. after no contact from Larry or Judy. Reaching Agreement 183 .5 million. you’ve already told us that. (Judy and Larry walk into the back room and close the door. He met with Bizannes twice before. Michael: Well.) 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. and he is offering us $4. they were prepared to accept $5. Larry. and we gave you our price. Larry. a local developer. and I’m prepared to offer you $4. Michael: Good morning.both of them love their store. visited their store. I still want to develop this block. Michael calls on them again with a check for $5. with a certified check.5 million.0 million. Larry: Yes. Larry: Judy. come out here! (Judy comes out from the back room. our accountant said it’s worth $6 million. How’s business? Larry: Great! I’m surprised to see you again. In reality. so why are you here? Michael: I’ve discussed it with my partners. today.5 million for the building. Two months later. but their continued walkout convinced Michael that they would hold firm. which the Bizannes accept. Michael: I have a check right here for 4.
184 50 Practical Negotiation Tactics . Jenny has an antique Singer sewing machine. each party submits their ﬁnal offer on each unresolved issue (usually in writing) and the arbitrator chooses one as the ﬁnal settlement as it has been submitted (no changes or compromises). Lynne and Gary bring the restored Singer to Jenny’s house. which is generally voluntary. One day Lynne dropped by for a visit and the discussion turned to the old Singer. In arbitration. I won’t take it. Jenny: No.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Lynne: No. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. but they wanted to give Jenny $500 for her “share” of the machine. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. Six months later. Keep the $1. I offered it to you for nothing. and would be able to restore hers as well. In most arbitrations. Lynne told Jenny that she and her husband Gary have restored two other Singers.000. We have a few dollars invested in parts and we had fun working on it. That was the deal. which she has kept in a barn for over ten years. In ﬁnal offer arbitration. In mediation. Each party wants their offer chosen. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring).000. Let’s split the money. Example 1 Jenny and Lynne are sisters. Lynne responded that this was their intention. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. both sides have agreed in writing to accept the arbitrator’s decision. Both involve the use of third parties who are objective. Jenny told them to sell it. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. They inform her that they put the machine on e-Bay and have an offer of $1.
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. Example 2 Ralph: Well. As a brief explanation. since he could only choose one offer. I’ll buy that. Then we both submit our final offers to Judge Ryan within 48 hours.” Lynne proposed a 50-50 split. we are down to only three unresolved items. I have chosen management’s offer to keep it as it is under the current contract.Jenny: Dad: Okay. Their father found Jenny’s position to be the most reasonable. on Friday. (One week later) I think Jenny’s position is the most reasonable. The union’s position could have run into millions of dollars.m. binding decision on the three items. Ralph: Right! (Friday at 3:00 p. based Reaching Agreement 185 . the old machine was only worth $50 when Lynne hauled it away. Ralph: I know. Tina: Yes. At best. first on the health insurance co-pay. and meet back here in 72 hours—3:00 p. They should get the other $950. My troops are getting restless. I can’t see any way to reach an agreement. he did not need to “haggle” with them. so I am invoking the finaloffer arbitration ground rule we have in place.m. Tina: Good. Tina. Any increase in value was due to the work of Gary and Lynne.) Judge Ryan: Here is my written. after six weeks of negotiating.
money. Conclusion The final-offer arbitration process enabled the parties to gain a fast. I have chosen management’s offer because the union did not justify why the past practice should be changed. At least we both saved time. Ralph. 186 50 Practical Negotiation Tactics . I have chosen the union’s final offer. Now let’s get a signed contract. and an item that large should have been negotiated at the table. on the merit pool distribution method issue. Well.Ralph: Tina: on last year’s data. and stress. No increase has been given for six years. Finally. and peacefully finalize a contract that contained several important gains for both sides. It will only cost $120. Second.000—less than 1 percent of the total package. I’m sure you realize that we could have taken six more weeks to reach the same point. on the clothing allowance. reasonable resolution to their last three unresolved issues. but we agreed to this process. I’m not happy with your decisions. nor why their method was superior.
At the very least. Bill and Paulette fell in love with the house.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. We’d like to make you an offer of $150. 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. and felt that they would have to work fast to make an offer before someone else did. During a discussion. If we shake hands on it right now. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. and decided to stop by to see if they liked the house. 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. all the usual stuff in a sale. They saw the “For Sale” and “Open House” signs. They were not the only couple to come to the open house. Obviously. The owners were selling the house without a real estate agent. we won’t be involving our real estate agent. and while Bill and Paulette had been using an agent to help locate houses. and one of the other couples looked very interested. Bill: Reaching Agreement 187 . The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. they looked at this particular house on their own. Seller: We’re asking $152. Bill pulled the seller aside. Seller: Yes. They finally looked at a house they really liked.000. Example 1 Bill and Paulette had been house-hunting for some time.000. however. not the furniture. everyone is busy grappling with the details of the negotiations.
It worked. and that the problems with her job performance were. Bill: (pleasantly surprised to learn that the garbage disposal. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. and two area rugs. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . (The seller recorded the offer of $150.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. a public agency. and the garbage disposal. I think we can work something out. real. Conclusion The seller had always intended to leave the garbage disposal. Seller: Okay. the refrigerator. When he had the chance to put the deal in writing. Sign here. he listed the stove. The supervisor assured the employer that there was no basis for her complaint.000. he left the price at $150. the hutch. he listed an attached hutch in the kitchen.000. but I’d like to make sure there are no misunderstandings. and had been prepared to drop his price to $145. If it’s what you meant. the hutch. since he probably would have missed them) Yes.) Seller: So. then we have a deal. and the two area rugs were specifically included. In the section for fixtures and miscellaneous items to be left on the property. and when she refused. the house is yours. he began to have “problems” with her job performance. in fact. In her complaint. and the two area rugs. Let me just get the standard “offer of sale” form and fill out what I hear you saying. Under the section for appliances to be left on the property.Seller: Just a minute. Example 2 Monica brought a sex discrimination charge against her employer. The supervisor pointed out that he had a staff of 20 or so women. she said that her supervisor had repeatedly asked her out. that’s what I meant. all window blinds and drapes. look this over.
there was little basis for the complaint. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100. And the confidentiality clause is standard. It might be standard when there’s a settlement. my client is supposed to formally withdraw the complaint rather than just settle it. and must agree not to tell anyone about the $100. you didn’t mention in the agreement that in exchange for the $100.000. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. even though we’re certain we would prevail. Look. then Monica had to acknowledge that the supervisor did nothing wrong. He’s happy to prove that in court. settling—What difference does it make to her? She’s getting her $100. but said that fighting the charges would be a long. I’m He: She: He: Reaching Agreement 189 . She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. But the employer doesn’t want to go through the expense and publicity of a trial. The supervisor insisted that if the employer felt he had to settle. Why’s that? Well. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. and expensive matter. He offered to send settlement agreement papers to her. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100.000 without actually having to prove anything. Monica had. even though you are paying Monica because we can prove he did do something wrong. by this time.000. You’re just trying to make it seem as if your supervisor did nothing wrong.000. but it’s not standard when a complaint is formally withdrawn.000. drawn-out. Withdrawing.
It was made clear that the employer had paid the additional $100.000. I’ll take your offer back to her and let you know.000. There was a confidentiality agreement. but word did get out that a public agency paid $200. Monica accepted the $200.000 when all that was asked for was $100.She: authorized to pay $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 and the conditions of the offer. 190 50 Practical Negotiation Tactics .000 just to get the employee to “withdraw” the complaint. 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. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. to his disadvantage.
depend on the kind of negotiations in which you are involved. and contract. Putting the Agreement in Writing 191 . Unfortunately. but some of the decisions were put off for a couple of months. However. and when they agree to solve problems together.” Clear communication is essential if you want to reach an agreement and have it abided by. however.” By the same token. Certainly someone has said to you. talking is not always the same thing as communicating. When two friends agree on what movie to see. operating under an agreement after it has been reached can be even more difficult. A union contract. commitment. it is much more effective in the long run when the parties enter into “win-win” agreements. but it was not what I meant. “That may be what I said. it would have been easier to resume negotiations at a later date. a written document is hardly necessary. when they engage in honest “give and take” negotiations. Putting an agreement into writing serves three purposes: communication. “Oh. As these examples of personal and business negotiations show. even an informal agreement benefits from some type of written documentation. most certainly needs to be in written form. If the agreement reached at the time had been put into writing with all three sisters signing it. Reaching an agreement is the first step. of course. then the parties have to abide by the agreement. A Communication Hearing is not necessarily the same as listening.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. In Tactic #17 (Package Items). Think of how often you have said to someone. the three sisters reached an amiable agreement. rather than attack each other. I thought you said something else. The degree of detail and formality of a written document will. One way to help the parties abide by an agreement is to put it into written form. reaching an agreement is sometimes a long and difficult process.
944.Communication is a process that involves a sender and a receiver. If Jason fails to live up to his side of the deal. seek information. Who isn’t excited about buying a brand new SUV or truck? Until. 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. 192 50 Practical Negotiation Tactics . you have created something tangible that can be referred to in the future when memories become fuzzy. sounds. 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. a couple of months away. the message being conveyed and received might be understood differently. When communication is limited to the spoken word only. When you create a written record of the details of an agreement. sounds. His mom could more easily enforce the agreement if she had it in writing. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. that is. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. or movements.” In Tactic #14 (Don’t Always Hide Your Weaknesses). And because the sender and the receiver are two unique individuals. The receiver has to decode the message being sent by trying to understand and interpret the words. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. pictures. or express a thought or emotion through words. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. The sender wishes to convey an idea. he can be reminded of the details because it’s all there in black and white. In Tactic #4 (Use Objective Criteria). the price is spelled out in the loan document as “twenty-two thousand. pictures. nine hundred and forty-four dollars—$22. or movements being used by the sender. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it.
as many people learn when they purchase a home. in writing. Both parties must receive a benefit or something they personally consider of value. why. Failure to do so can lead to big problems. protect yourself by having a written. which kind of. say. WHAT? The written document should clearly describe the item(s) covered by the agreement. and getting all the parties to sign it usually creates an enforceable contract. one party will change behavior in exchange for something of value from the party who wants the behavior changed. You can informally enforce an agreement just by showing the individual(s) the signed copy as a reminder of the substance of the agreement and their commitment to it. You can do this more formally by taking them to court (perhaps as a last resort). what. which. your plants die because the house-sitter wasn’t told to water them. before the trip.Contract Finally. One party wishes to buy what the other wishes to sell. have your spouse also agree to the details of the agreement. the address and description of the real property. how many. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. If you have agreed to pay someone to house-sit while your family is on vacation. and so on in standard contract form. Generally. when. When you are ready to commit yourself in writing. ask yourself the basic questions of who. In either case. pulling an agreement in writing. dating it. However. where. Carefully and completely describe the subject matter of the agreement. details such as what fixtures stay or what appliances go can be easily overlooked. the real estate contract includes information about the buyer and seller. Here’s what we mean. or it isn’t an agreement—it’s merely the conveying of a gift. signed. and dated agreement. WHY? The “why” of an agreement is generally the explanation of the mutual obligations or advantages the agreement represents—the reason why the parties began negotiating in the first place. and how much. WHO? Provide of the full names the parties necessary to the agreement. Putting the Agreement in Writing 193 . one party will work if the other party pays for the work. and put that information into the document. leading to misunderstandings and contract disputes.
if that becomes necessary).The remaining questions fill in the details of the agreement. 194 50 Practical Negotiation Tactics . in fact. and having all parties sign it ensures that the parties have. It gives the parties an opportunity to really buy into the deal. the better. And it can create a tangible reminder of the deal (or an enforceable agreement. Putting an agreement in writing. depending upon the deal: when or where. The more-specific and clear these details are. dating it. how much or how many. which one or which kind of. agreed to the same thing.
Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .
Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: 196 50 Practical Negotiation Tactics .
________________ 4. ________________ 10. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 8. ________________ 2. ________________ 5. ________________ 7. ________________ 3.Name of Negotiation Tactic 1. ________________ 9. ________________ 6.
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. Cleary. Inc. Gotbaum. Irwin. Upper Saddle River. George. and S. 1988. Calif. Victor. Maddux. D. Inc. New York: M. and Law. Minton. The Relaxation and Stress Reduction Workbook. Patrick J. New York: Simon and Schuster. Fisher. 1988. 1991. Negotiating in the Real World. Fuller. Practice. M. and S. Inc. The Negotiator’s Handbook. LittleJohn. 2nd ed. David. New Jersey: Prentice-Hall. Ury. New York: Bantam Books. 1997. 1991.REFERENCES Carrell. 2001. New York: Penguin Books. Oakland. New York: Basil Blackwell. 2004. New York: Penguin Books. Brown. Inc. 1989. Sharpe. and J. Gavin. Chicago: Richard D. E. 2nd ed. Calif. Cohen.: New Harbinger Publications. 1996. Clark. You Can Negotiate Anything. Pocket Negotiator. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Negotiation Skills. R. 1980. Getting Together: Building Relationships As We Negotiate. and M. Inc. Roger.: Crisp Publications. Patton.E. Roger. K.. C. 2001. M.: Waveland Press. New Jersey: Prentice-Hall. W. Kennedy. The Negotiation Handbook. Ill. Inc. R. R. and C. The Essentials of Negotiation. Upper Saddle River. Fisher. Eshelman. W. Lewicki. 1999. Herb. University of Missouri: Columbia Press. McKay. Heavrin. M. 1987. 7th ed. Los Altos. and B. Fiske. References 199 . Saunders. Inc. Getting to Yes: Negotiating Agreement Without Giving In. Prospect Heights. Labor Relations and Collective Bargaining: Cases. J. Mediation. Domenici. and J.
New York: Penguin Putnam. G. William. 1991. Inc.negotiationsources. New York: Bantam Books. Stulberg. George. Howard. Thompson. Dudley. Shell. Inc. L. Raiffa. Getting Past No: Negotiating with Difficult People. 1999. Upper Saddle River. 2001. Labor Relations in a Global Economy. Howard.Nierenberg. Cambridge. New York: Viking Press. Massachusetts: D. 1987. 1998. Ury.E. Inc. New York: Simon and Schuster. The Art of Negotiating. R. www. Gerald I. Lexington. The Eight Essential Steps to Conflict Resolution. New Jersey: PrenticeHall. Tsogas. Cambridge. 1994. The Art and Science of Negotiation. B. Heath and Company. 1996. 1982. Sharpe. Massachusetts: Harvard University Press. Weeks. J. C. Raiffa. New York: M. Lectures on Negotiation Analysis. Inc. The Mind and Heart of a Negotiator. Taking Charge/Managing Conflict.org 200 50 Practical Negotiation Tactics . Bargaining for Advantage. Massachusetts: PON Books. 1981.
ABOUT THE AUTHORS ichael R. and served as President of the Board and Mayor Pro-tem for three terms. The University of Nebraska-Omaha. He received his doctorate from the University of Kentucky. In addition. HR Magazine. The Academy of Management Review. M Christina Heavrin J. In addition to negotiating numerous litigation settlements and contracts. Morehead State University. During his academic career he has received awards for both outstanding research and teaching. Labor Law Journal. Carrell are in the fields of collective bargaining and labor relations. Human Resource Management. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. which is located in the greater Cincinnati area.A. Organizational Behavior and Human Performance. Dr. Carrell is Dean of the College of Business at Northern Kentucky University. Carrell has held academic positions at California State University. and the University of Louisville. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Personnel Journal. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. organizational behavior. and Public Personnel Management. Books published by Dr. and MBA and B. she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . The Journal of Accountancy Training. Personnel. Business Forum. he was elected to the City of Louisville Board of Aldermen for five terms. in Economics from 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. and negotiations. Marshall University.D. The Personnel Administrator. Bakersfield.
202 50 Practical Negotiation Tactics . Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. Jefferson County. the City and a for-profit hospital for guaranteed indigent health care services for city residents.park and a successful industrial park in the City’s enterprise zone. an agreement between the State of Kentucky. Ms. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs.