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



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

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

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

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

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

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

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

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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.

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



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

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

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

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

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

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

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

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

they had to agree that their early estimates were low. From a look at the portfolio. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. while she wasn’t an expert.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. 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. Conclusion When the other plumbers looked at the work. The college’s budget officer was understandably offended. Budget Officer: I don’t know what your problem is. they said. because (as Will pointed out) it wasn’t an apples-to-apples comparison. 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 would have had to revise the figures. He was disappointed in the performance of the fund. I certainly didn’t mean to offend you. 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. she had been investing the college’s endowment funds for many years. Example 2 After Stuart was appointed to the college’s Board of Trustees. The estimates would have been higher than what cousin Will charged. Larry: That sounds fair. and no one had ever questioned her performance. Had they actually prepared bids on the work. Comparing the estimates to Will’s actual costs would have been counterproductive. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . I’ll revise my bill to meet the lowest estimate you get.

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

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

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

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

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

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

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

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

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

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

the founders of the firm.000.000? Carol: We really can’t take less than $160. as to how you think the name is going to benefit you. Here’s how the initial negotiations went: Partners: Well. When Carol refused to budge. The other law firm was prepared to pay $100. and then $10. 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. In any event. but they have no idea what the value of their firm’s name might be in this nearby city. were still alive.000 offer by coming down in price at least a little. Neither Edward Bits nor Edmund Bites.Buyer: What if we offered you $100. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. Inquiries to other law firms were not very helpful because in almost all of the instances. 36 50 Practical Negotiation Tactics . we are certainly interested in your request to “buy” our firm name to use in your city. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. or she has unreal expectations. though. Example 2 The law firm of Bits & Bites was a Sioux City institution.000 immediately. Carol drove off a potential buyer by setting an asking price that was just too high. enjoying a statewide reputation for quality representation.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. the buyer took it as a signal that either Carol didn’t want to sell. We’re curious. The partners are interested in selling the name.

I’m kind of embarrassed now. and then 10% of your profits each year for as long as you use the name. And even though you don’t have an office in our city. To offer it now would be an insult. we do. We probably won’t be insulted. (concerned about loosing the opportunity) Wait. Yes. we reserve the right to withdraw our permission. 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 . I guess this is just not something we’ll be able to pursue. that’s just our initial figure. Well. that is a very high number. We weren’t really thinking about that amount of money. then. expect to pay for that. (surprised) Well. What number were you thinking about? Well. Thanks so much for meeting with me.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. And we. starting with the ten partners you describe. We should assume. Give us some range. we want $500.000 initially. Using the Bits & Bites name can only enhance our profitability. but we get to keep all of the money we’ve received up to that point. it would be impossible to create a new name out of the names of our key partners. I really don’t feel comfortable doing that now. Let’s just pretend this didn’t happen. because we were not even close to that number. of course. one of these two attorneys carries the surname of the firm they are leaving. If at any time we feel that you have “harmed” our name. because you are in the state capital and your firm has handled a lot of high-profile political cases. So. In every instance. you have a very solid reputation there.

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

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

You are located outside our primary service area. Miguel: I’ve figured $4.000 per month is one of the highest in town. your rate of $3. Miguel: But not at this ridiculous rate. causing our reps to spend hours on the road. And cut the training hours from 55 to 20. And we need to add a clause that holds your company responsible for machine damages. For the past three years. perhaps even unintentionally. we’re here to negotiate a new service agreement. We estimated that it has cost us more than $50.200 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. Sandy: What? First of all. Sandy. Let’s talk. 40 50 Practical Negotiation Tactics . She very wisely recognized the routine and forced Andy and Paula to give her a clear. firm offer if they decided to continue negotiations. Miguel: Well. And we want to change the 24-hour service response time to 48 hours. Liz: But we still want to renew your contract.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. and your training programs. Sandy. your account has taken too much time. we’ve been fairly happy with your responsiveness. the quality of the technicians’ work.000 in service calls last year alone because your damn people don’t take care of the equipment. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm).

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

when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company. 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. and might even harden your opponent into an unfavorable position (for you or for both of you). 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. The fault was partly his because he did not stay on top of changes. because we have had a sick relative out of town and we used long distance a lot this past month. So. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. He decided that the best approach was to act indignant when he spoke to the company representative. I noticed this. This will put you at a distinct disadvantage from this point on.00 a minute. I have a problem with my recent bill and my billing rate.10 a minute rate at my office location. He had. but I recently was sold a $. such as deals on computer packages and phone services. It seems that the rate you are charging me on my home phone is $1. he was very unhappy. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. in fact. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. How may I help you? Hello.Tactic 9: Control Your Emotions Stay cool. 42 50 Practical Negotiation Tactics . made some very good purchase decisions for his small business.

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. how would anyone who might only have residential service even know to ask? Well. But as a very good customer of yours. I realize that that might be the rate I started paying when I first took your service over eight years ago. Had you brought this to our attention before. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . and I also realize that if I had examined my bill closely. Well. I would have known I was paying too much. but this was quite a shock. we certainly would have discussed your options. to begin now. It hasn’t been increased at any time. Customer representative: Let me pull up your account.I expected the bill to be higher than usual. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. I see that the rate you are being charged is the rate we offer for the type of service you have with us.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. (beginning to sound irritated. I would think you would have given me the best rate you offer new customers. Mike. But I am able to offer you a $.

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

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. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . and you just can’t be too careful. They will be putting the plant AND their fellow workers at risk by not being here. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. and that they should be asking for a fairer base wage for the work they do for you. Working with fireworks is working with explosives.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. and it’s getting old. 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. lesssenior employees might be at greater risk of injury because they have to handle explosives. and it’s not what we’re even talking about. they would become dissatisfied with their pay and want their base pay increased. that’s just not fair. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. The owner told the employees that he was worried that during the overtime shifts. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. On those overtime shifts. Owner: Now. I’ve got to have the employees with the most experience to protect this place. The employees’ negotiator finally decided to use “indignation” to break the stalemate. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime.

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

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

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

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

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

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

Usually. When they boys returned. These positive things are part of your goals and objectives. I wouldn’t care so much.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. you both want to complete negotiations by a certain date. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. and their mother was tired of it. I also took out the garbage last week without being asked twice. she made them share whatever it was. Unless you can convince me otherwise. The two boys fought over the last piece of everything. That simply rewards your continual squabbling. they saw that there was one piece of cake left over from their mom’s bridge party. the last piece of cake will get thrown away. and neither boy was very happy. and I really love the banana/butternut/ sour cream frosting on this cake. and then asked their mom for a chance to negotiate with each other. I missed dessert the other night because I had to get to baseball practice. neither of you want to be embarrassed at the outcome. The boys quickly huddled. Russ: 52 50 Practical Negotiation Tactics . They immediately began to fight over it. Be clear on what you have in common at the start. here’s what they said to her: I think I should be rewarded with the piece of cake. and so on. she decided to try something different. point them out at the very beginning of negotiations and refer to them throughout the process. because I am so conscientious about my paper route. particularly when things seem to be at a standstill. Example 1 When Russ and Bill got home from school. like we usually have. This time. you want to reach an agreement that is favorable to an outside party. If this was chocolate icing.

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

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

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

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

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

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

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

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

000 22 23 24 25 26 27 Initial Offer $28. 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) Target Point ($23. “Distributive” bargaining (“win-lose” or “zero sum”) is used. (2004). The negotiator firmly states that it is their best offer in an attempt to gain a nice. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).500) Fig. 190–192. None is as important as the first one. 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. 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. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Exchanging Initial Offers 61 .500) Resistance Point ($25. as illustrated in the following figure: Seller Resistance Point ($22. Adapted from Labor Relations and Collective Bargaining. Carrell and Christina Heavrin.500) M $21.750) Target Point ($24.000) Settlement Range ($22. This is a practical starting point that will not anger the other side (and might even be expected). for example. quick agreement.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds.750–$25. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.000 Buyer Initial Offer ($21. by Michael R. Another common strategy is to start with the status quo. 2: Distributive Bargaining Process.

the process quickly narrows to the range between the initial offers. each initial offer ($21.000 and $28. 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. it is termed the settlement point – not the “right price” or “fair price. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). thus producing a true “win-win” negotiation. and is the range in which most negotiations actually occur. 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.In this example. the other side does not agree to this value). these points have set the outer limits.” but the settlement price. 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). After initial offers are exchanged. In the example. 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. A target point is the desired settlement value a party has set as a goal when negotiations begin. The settlement range is the distance between the resistance points. See Tactic #18: Agree on Something As Soon As You Can. 62 50 Practical Negotiation Tactics .000) is reasonable. if the buyer’s initial offer was $25. thus starting out on a positive note. When the two parties agree to a price within the range. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. usually. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. 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).000. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package.

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

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

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

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

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

this conversation takes place: Hobbs: Yes. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . quickly checked the dealer’s inventory of sport utility vehicles in stock. but … Salesman: But what? Hobbs: Well. I can go to another dealer and get a green exterior—the color I like best. However. not revealing that the item exchanged is a “throwaway. Salesman: Well. Hobbs. you don’t want your opponent to know what these things are. Salesman: Let me talk to my manager. according to my figures. you are making $200 profit over the true dealer’s cost. I’ll go get him.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. A has gained something of true value and given up nothing he values in return. but he makes a mental note to use color as a “throwaway” item. and noticed that none of the vehicles have a green exterior. we’ve got expenses and we need to make some profit. He doesn’t really care about the color of the new vehicle. it’s a great car and a fair deal. but in reality. so be sure you present them in a way that suggests importance. But for this price. 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. when the two sides are only a few dollars apart.” Throwaway items are those things that hold little or no value to you. I know. Example 1 The buyer. Hobbs: Yes. Here’s how it works: Party A exchanges the item for something of true value. At a point late in the negotiations. Mr. It is a useful tactic in any negotiations. according to the Consumer Reports listing of the cost of the vehicle.” Party B thinks that A has sacrificed one important objective to gain another.

... Conclusion Mr. and seniority will be used to determine who gets to choose the first day. Example 2 The office supervisor told the three internal sales representatives (Jenny. and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. Hobbs successfully chose color as a throwaway item. Then we have a it’s not. The manager was convinced enough to sacrifice a final $100 for the throwaway. All three employees must agree to the schedule. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. At the very end of the negotiations. Employees will be paid time-and-a half for each of these days. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth).Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. The days in question are: Exchanging Initial Offers 69 . so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I . but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. The three are sitting at a lunch table to discuss the schedule. Miguel. I’ll take the red one for $100 less.

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

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

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

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

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

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

I don’t intend to “stick” you with anything. I think that makes sense. 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. If both of us had been working the year I went to graduate school. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. about the house and furnishings. and XYZ Co. as long as the cost was approximately the same. ABC usually uses UPS 76 50 Practical Negotiation Tactics . hold on. we would have paid down our school loans more. Tim: Okay. What do you want to do about them? Conclusion Having agreed to two items very quickly. I think it only fair that I take over repayment of all the school loans. I can hardly argue with that. and you got your sports car. and he could pay it in annual installments over a five-year period. Example 2 ABC Company. an art gallery. The monthly payments are about the same.Kathy: Hey. Frankly. Kathy: Now. When we bought them two years ago. I got my convertible. The first thing I’d like to talk about is what we are going to do about the cars. Tim: Well. as you remember. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. Kathy: I suppose we should look at the school loans next. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. Okay. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. a wholesale art dealer. They also agreed that Tim wouldn’t have to pay her that amount for five years.. yes.

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

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

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

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

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

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

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

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

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

Sue: Let’s offer $325. or 3) Make an unrealistic offer (i. such as last year’s price. before someone else does.000. The other party will probably come back with an equally ridiculous offer. offer $150.. never give them their asking price. The sellers must be willing to come down a few thousand … Sue: Well. thus requiring greater concessions on both sides. 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. They found one they both like that lists for $325.000 and $337.000.000 this year. 2) Start out with an old number.) To prevent this from happening. Jay: No. but you feel cursed because you gave away too much.” The perfect first offer. We don’t know how anxious they are to sell or if they know the market. Avoid giving away too much at the outset. then $320.” (You have won a settlement. and houses in this area sell fast.000 for a house that sold for $185. which can be very useful).000—what they paid for it. think things through before you make or accept the first offer.000 two years ago. of course. particularly if you don’t know the other party’s “settlement range.e. That’s a fair price. because you have settled quickly. and you cannot withdraw it in good faith. Jay: No.000 three years ago). The worst first offer is the one that is so high or so low that the other party jumps on it immediately—known as the “Winner’s Curse. Let’s low-ball them and offer $290. at minimum cost. is the most (or least) the other side will accept. 86 50 Practical Negotiation Tactics . Their realtor told them that it sold for $290.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.000. and that two similar ones on the same street sold for $330.

The buyers were very motivated to sell. I can’t tell our realtor $290. Both parties felt that they made a good deal.000 total.000. 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. That’s an insult! Jay: Well. and the offer was based on fact: the prior negotiated price. as requested by the human resource director. They outlined how they would develop a new employee performance-appraisal system.Sue: Don’t be crazy. was very impressed with their presentation. If. the sellers obviously would have accepted and Jay and Sue. as Sue had first suggested. then let them make a counteroffer.) Bob: I’d do it for $3.000. Exchanging Initial Offers 87 . but who knows what they are planning on offering. Sue: Then you do it. (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.500—half the difference! Sue: Great. they had offered $325. (the next day …) Jay: They made us a counteroffer of $307. realizing they offered too much. Lyle Foxworthy. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. since they had already bought another house. Give us your lowest price.000 for each of us—$6. Frank: Me too. the company president.

We’ve waited long enough. and it would not apply. I’m out of time. That is all that’s left in this year’s training budget. 88 50 Practical Negotiation Tactics . but we can’t pay more than $18. and you two come highly recommended. but we know you must have an amount budgeted for this and we are willing to do it for that amount. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer.000.000. Bob: That’s fair.000) their minimum price of $6.) Lyle: Okay. What’s the cost? Bob: We want the job.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. They also ended up getting three times ($18. Lyle: Okay. We’ll do the job.

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

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

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

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

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

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

500 left. that makes sense. and we both get things we want.500 $5.500 $2.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.000 $5. which I’d like to keep in the bank.000 $1.000 $2.200 $200–$2. I’ll trade your sidewalk and trees for my whirlpool bath. I’d like to spend some of it on lighting upgrades.000! Brooks: Good. We have $1. Maureen: No. which takes another $3.500 $500 $1.000 $500 $1. Making Counteroffers (The “Give and Take”) 95 .000 $3. These are all permanent immediate needs. $750 for lighting and $750 in the bank.# 1 Sod Item Cost $1. Can we split it evenly? Brooks: Okay.

management and union negotiators found that a “winwin” approach to negotiations worked well. Wage Increase 4. 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. Drug-Testing Program 96 50 Practical Negotiation Tactics . This year. Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). finally agreeing to split the difference on the remaining amount (distributive items). even in difficult years. 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. Pension Increase 3. both sides exchanged lists of initial demands at their first meeting. The combined lists total thirteen different items: Desired Outcome No. All items to be negotiated and their desired outcome for each item were put in writing for review. Profit-Sharing 5. Length of Contract 2. During that time.Conclusion By taking the time to list all the items each person wanted and their cost estimates.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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

Making Counteroffers (The “Give and Take”)


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

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

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

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

the people Madame Mayor currently 120 50 Practical Negotiation Tactics . and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. 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. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. her plans really don’t have any bearing on these negotiations. The mayor. Mayor’s representative: No. Town Council Representative: I think you’re wrong. She has not decided what she’s running for. but now they’ve got to ask what Madame Mayor’s motivations are. by saying that she might run for Chair. and were trying to settle on new and expanded areas when one of the elected officials (Ms. and until she does. I don’t think it’s a problem. The end of the agreement coincided with the election cycle for the two towns. Also. This is how the negotiations went: Town Council Representative: Well. He decided to push for a simple renewal of the original terms. The parties agreed to continue the previous terms of the agreement.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 mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. has colored these negotiations. My bosses might not have been inclined to expand the agreement anyway. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. Town Council Chair). The term of the original agreement was nearing its end. Mr. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. Mayor) said that she was considering running for office.

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

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

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

dependent coverage could cost us $1.000 (which we reasonably should have expected to pay in premiums) in the pension account now. and we know that with this new contract term of five years.Example 2 The contract negotiations between the pilots and the airline had been going pretty well.000 a year over the next five years? Company: Yes. the airline paid a total of $200. as it has always been. the company can make your pensions much better. you are taking a risk on the costs increasing. what they really need is for you to cover the costs of dependent coverage. If we invest the $200.000. Over the next five years. As best as we can tell. The airline industry is in a slump. This would be a better benefit in the long run. Pilots: Look.000.000 to cover the premiums for dependent coverage.000. we know that health insurance premiums might skyrocket.000. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. And we cannot afford that $1. However. This is just a cash-flow problem that your members have to understand. But only a few of our people are close to retirement age. and the premiums for health care just keep going up. that would be the minimum increase. The pilots want dependent coverage paid for by the company. and are willing to keep pension benefits the same.000 figure. Over the last five years. With long-term planning and investments. The company wants to trade paying for dependent coverage for better pension benefits. with all wage and operations issues resolved fairly early. then the pension benefits overall will increase by $10.000.000. Everyone was afraid that the dispute would cause an impasse and a possible strike. 124 50 Practical Negotiation Tactics . Company: This could not come at a worst time for us. The projections for the next five years were that these costs would increase to about $1.000. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.

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

I just can’t imagine the monthly payment on a $45. I recall the day you drove it out of here. what monthly payment did you have in mind? Buyer: More like $300 per month. I guess it would be around $600 per month. Example 1 Car buyer: What.” “affordable weekly payments. Buyer: Yes. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. I love this car. Saleswoman: With your 740 in trade.” 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.000 for a Volvo? I bought the one I’m driving for $19.000 car. do you want to look at something else? Buyer: No. and compare it to your strategic objective. but that was several years ago. if I can give you this car with a $300 monthly payment. be sure to add up the total cost. If you are on the receiving end of such a tactic. Saleswoman: I’ll be right back.” and “low monthly rates” are examples of the salami tactic. $45. Phrases such as “for only pennies a day.… (20 minutes later) Saleswoman: So. it’s a deal? 126 50 Practical Negotiation Tactics .Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. Buyer: Way too much! Saleswoman: Well.500! Saleswoman: Yes.

can’t you? Buyer: Yes. Once the buyer volunteered that $300 was an affordable “slice. Sure. Saleswoman: Simple. it will be a five-year lease. I can afford $6. down payment.000 down. I can’t discuss another client’s account.” She decided to cut the $45.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. Making Counteroffers (The “Give and Take”) 127 . but let me see the numbers. Great! So. Let’s see.00 per month. I can’t afford that much.99 per month.00 per month for your service. and added the trade-in. but what else must I buy? Only the basic service for $8. Instead of a three-year lease.” she had him—she worked around the $300 slices. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. with your car and $6.000 price into “slices” the buyer thought reasonable. do you want Disney? Yes. (looks at the numbers) That looks good.Buyer: I don’t see how you can do that.00 per month. and payout slices to reach the total price she wanted. as promised. you can get the Disney channel for only $5. But my neighbor pays $39. do you want HBO? How much? $5. You can do that.

00 per month. Disney is for the kids! The sports channels are for me. What about the music package? Yes. 2. That’s $5. and SI 1. and my wife wants the old movies. we had that before. 128 50 Practical Negotiation Tactics . Yeah.99 per month. Okay. Great. But that’s all! Then we’ll hook you up on Monday.00.00 a month.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Thanks.00 per month was far too much. That’s another $5.00! Why? Because he judged the per-slice price to be reasonable. Conclusion The owner thought his neighbor’s service at $39. I really want the sports channels. and probably felt much better about the total negotiated package because it was presented in modest individual slices. they asked about the Cartoon Network. instead of one total amount. 2? How much? $8. The total is $38. 3. Any other kids’ channels? Yes. but he agreed to six “salami slices” for a total of $38.

but in tense.m. angry negotiations. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. and it can destroy your credibility. and the use of humor.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. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. For example. When both sides believe that each has equally strong positions. so are you ready to make a deal? This might convince a few buyers. turned off by the tactic. but it can be used effectively when one party clearly has an edge. “I can only guarantee this price until 6:00 p. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. It should be used with caution: It can end negotiations immediately. but others will walk out the door. pressure tactics should probably be avoided. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). Tactic #33 (The Bluff) is a classic pressure tactic. 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. the traditional car salesperson might tell the buyer. 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). today. which can be successful if the opposing team has two or more members who hold different views of an issue. Applying Pressure 129 . In some cases. however. it is effective. Humor might not look like pressure.

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

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

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

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

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

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

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

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.

Applying Pressure


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

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


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.

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

Applying Pressure


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

It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. once had to call a plumber in for emergency repairs. the guy was in no position to dicker over the price of the repair. Try bargaining with a plumber! This homeowner. and was forced to pay whatever they demanded. because this is the busiest time for that industry. he was able to successfully bargain for other services. while the other is not—that is.Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. Unions can strike at any time to achieve their goals if they have some leverage. Since the heating and air conditioning company held no leverage over him. The owners of professional sports Applying Pressure 141 . there were times when there was no pressure and no emergency. It is sometimes referred to as “pressure bargaining. for example. such as the advantage of time. not blessed with many household repair skills. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. The same kind of thing happened a couple of years before that: In the middle of August. Since his toilet had overflowed and water was continuing to run all over the floor. If the employer is a shipping and express mail company.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. his air-conditioning unit went out. Example 2 Let’s face it: Sometimes one party holds all the cards. its union has the advantage in the weeks just before Christmas. when one side has “leverage” over the other. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. He was at the mercy of the company that could install an appropriate unit the fastest. On the other hand.

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

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

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

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

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

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

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

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


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.

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


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.

Applying Pressure


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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.


Making Progress


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

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

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

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

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

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

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

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

Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. They might worry that the tapes will be made public or given to others. Michael Wood. 162 50 Practical Negotiation Tactics . South Carolina.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. Alexis then played the tape for her father. thus becoming a source of embarrassment. Then he played the tape. or simply “bad faith” methods have been used by the other party. Jones’s supervisor. who was disappointed to hear that she might propose such a deal. the accused. the younger sister. The two sisters had saved up a little money so that they could buy souvenirs. Susan understood the impact a tape recording can have when it reveals a lie. this time in front of a hidden recorder. Example 1 Susan. had $40. age 14. She borrowed a tape recorder so she could ask her father if this was a fair deal. age 15. Susan denied it. or used to pressure the other side to agree to certain demands. and Jones. He asked his elder daughter about the arrangement. Susan repeated her demand. Fred Adams. threats. Alexis knew this was not fair. until Susan said they would evenly split what they bought. and Alexis. The effect on the other party might be even more substantial if lies.00. Conclusion For the first time in her life. Somehow. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. were on vacation with their parents in Myrtle Beach. Alexis. the investigator. but Susan had only $20.00 to spend. Alexis agreed. are talking about a possible settlement of the issue.

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

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

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

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

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

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

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

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

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

They sold for: $225. has owned the house for 24 years and is downsizing to a condo. but we feel that it’s a fair offer.000. the other party will ignore or refuse to believe the information. but you’ve priced it way too high. What? That’s $35.000. I’ll get back to you. Sometimes. $229. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. We love your house. but the right facts presented at the right time can chill or astound and completely turn things around. and we are countering with an offer of $250. $237. (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. and $237.000. Here’s a list of the five that are about the same size as yours. $235.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.500. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. 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.000. This offer is for more money than any four-bedroom houses on this neighborhood list.000. Sam Jones.000. They believe it is overpriced.000 under the listing price! We realize that. The owner.

Making Progress 173 . I’ll get called on the carpet. Order the new computers. Well… We have a written counter of $245. and did his homework. That’s the bottom price. Supervisor: Well. I’ll be… Okay.000. Example 2 Supervisor: You know the policy. The last 20 were over $2. We accept. Conclusion Hatfield had anticipated what his supervisor’s position would be. He found facts that supported his position. and wisely chose exactly when to present them in order to make his point.000 each. I asked for a list of all new PCs bought this year. who was not particularly knoledgeable about real estate. No one can go over $1.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. Hatfield: My staff has done a lot of research. if other departments have ignored the policy.400 each.600 for a computer. Conclusion The Joneses had based their asking price on the advice of a friend. 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. Hatfield: While I was at purchasing. Supervisor: If I okay this purchase order. Here it is. We’ve talked with purchasing and we have the authority to buy seven for $2. You can’t pay more than $1.600 unless the company president approves. let’s not worry about it.

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

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

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

Tactic #49 (Final-Offer Arbitration) should bring about a settlement. 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. When two parties believe they have an oral 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. days. 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 #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. They bring it out when a dispute arises. 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). and the classic Walk Away (Tactic #48). and the child learns an important lesson about life. 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. T Reaching Agreement 177 . or even months after the first offer is presented.Stage 7: Reaching Agreement he final stage! It might come minutes. this tactic can produce an agreement. hours. In this process. When multiple issues are at stake and most have been agreed upon during negotiations. 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 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. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. 2) allows the other side to feel the release that comes with completing the bargain. As he hugged her.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. off-again discussions.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. She said. 3) and adds one last key demand to the congratulation sentence. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. Example 2 Negotiations can take a long time and incorporate many issues. His wife had carefully planned her exact “premature” vacation agreement. Larry Snyder gets bored staying in any one place for many days.C. They both have stressful jobs and look forward to their annual vacation together.C. D. After days and weeks of on-again. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. Nancy brought up the subject of vacation again after dinner. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. “I’m thinking of agreeing to your plans for vacation. but his wife Nancy likes to stay put and relax. Let’s do go to Virginia Beach and Washington D.” Conclusion The husband was so excited about visiting Washington.

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

The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.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. However. 180 50 Practical Negotiation Tactics . the negotiator skillfully finishes his words of congratulations by inserting one last key demand.

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

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

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

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

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

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

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

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

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

She: authorized to pay $200. but word did get out that a public agency paid $200. to his disadvantage. It was made clear that the employer had paid the additional $100.000 when all that was asked for was $100.000 and the conditions of the offer. There was a confidentiality agreement. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. 190 50 Practical Negotiation Tactics . I’ll take your offer back to her and let you know. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000 just to get the employee to “withdraw” the complaint.000. Monica accepted the $200.000.

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

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

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

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

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

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

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

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

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

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

Ms. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville.park and a successful industrial park in the City’s enterprise zone. Jefferson County. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. an agreement between the State of Kentucky. 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. the City and a for-profit hospital for guaranteed indigent health care services for city residents. 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.

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