SECTION I: INTRODUCTION

Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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SECTION III: 50 TACTICS FOR SUCCESS

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

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Preparation

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

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50 Practical Negotiation Tactics

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

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

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

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

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

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

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

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

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

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

while she wasn’t an expert. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. they had to agree that their early estimates were low. Comparing the estimates to Will’s actual costs would have been counterproductive. Budget Officer: I don’t know what your problem is. The estimates would have been higher than what cousin Will charged. he used his financial expertise to analyze the investments of the college’s endowment fund. The college’s budget officer was understandably offended. and no one had ever questioned her performance. Example 2 After Stuart was appointed to the college’s Board of Trustees. From a look at the portfolio. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . they would have had to revise the figures. Had they actually prepared bids on the work. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. they said. The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. I certainly didn’t mean to offend you. and decided to bring the matter up at a Board meeting. He was disappointed in the performance of the fund. because (as Will pointed out) it wasn’t an apples-to-apples comparison.disagree on the need for that work or that they would have done it for less. she had been investing the college’s endowment funds for many years. Larry: That sounds fair. Conclusion When the other plumbers looked at the work. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. I’ll revise my bill to meet the lowest estimate you get.

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

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

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

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

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

I’ll see you on Monday. I can’t take it with me. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well.m. Then it’s a deal? Yes.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. that’s a fair price. resulted in another 6-6 30 50 Practical Negotiation Tactics . I’m moving to California to live with my daughter. Example 2 It was Sunday. as a matter of fact. Conclusion While Bob did not achieve his goal during his first negotiation effort. (after a careful inspection) It’s a very nice car! I’ll give you $12.000. Well. and the vote was a 6-6 tie each time. A majority was needed to pass the partnership agreement. the proposal would die at midnight. so I guess I will be selling it. beyond which the project would have to be abandoned. for tax reasons. The partner organization. Can you come back on Monday at 10:00 a. Follow me.m. December 31st. and I promise to take good care of it. if a seventh vote could not be found by the pro-agreement side. Can I see it? Sure. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. A third vote at 3:00 p. The board members had met twice before. to seal the agreement at the courthouse? Sure. had issued a deadline of December 31st.

When the meeting resumed at 4:00 p. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p.m. and the meeting was adjourned. For weeks. Preparation 31 . the project had been stalled by 6–6 votes. That effort failed. Then. and it worked. the pro-project leader told his members to filibuster until he gave a signal and called for another vote.m. 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.. Both sides caucused: The leaders on each side met to negotiate a compromise. timing was everything. The measure passed 6–5 at 5:45 p. a member of the anti-project group left the room..deadlock. in the end. A member of the pro-project group quickly called for a vote after the leader gave a signal.. as predicted.m. At 5:30 p.m.. during an hour break in the meeting. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. He planned for it accordingly.

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

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). Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). If there is a significant weakness in your position. The agent explained that the seller was desperate. “Please make any offer—they are motivated!” The buyer responded. but the inside was a complete turnoff. with “All right. Weeks later. The buyer said he wasn’t interested. half-serious.” The agent took the offer to the seller. 34 50 Practical Negotiation Tactics . and the buyer was able to completely renovate the house and still have a great deal.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. two people on the team will be more successful because they evoke different emotions from the other side. By assuming opposing roles. I offer half the asking price. The desperate owner agreed. let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. the seller’s agent called the buyer about the property. For example. The buyer loved the location. His teenage sons had “trashed” the house.

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

the founders of the firm. Here’s how the initial negotiations went: Partners: Well. were still alive.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. or she has unreal expectations.000. The partners are interested in selling the name.000 immediately. The other law firm was prepared to pay $100. as to how you think the name is going to benefit you. enjoying a statewide reputation for quality representation. Neither Edward Bits nor Edmund Bites. Carol drove off a potential buyer by setting an asking price that was just too high. and then $10. We’re curious. 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. When Carol refused to budge.000 offer by coming down in price at least a little. we are certainly interested in your request to “buy” our firm name to use in your city. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.000? Carol: We really can’t take less than $160. Example 2 The law firm of Bits & Bites was a Sioux City institution. In any event. though. 36 50 Practical Negotiation Tactics . Inquiries to other law firms were not very helpful because in almost all of the instances. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. but they have no idea what the value of their firm’s name might be in this nearby city.Buyer: What if we offered you $100. 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.

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

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

I heard that you want to sell your riding mower. I’ll go home and you can call me if you two can reach an agreement. not for $1. Peggy: So. Andy: No. Peggy: Planning a Strategy 39 . They cost about $300. Andy and Paula: Yes. only three years ago. while another acts difficult. threatening. Andy: No. you’re really moving! I hate to see you leave. Half what it cost us new. And take the leaf-catcher attachment and the gas can. Andy: I want them… Paula: Go ahead and take them. Peggy. and I know how you take care of things.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. Peggy: That’s fair. Paula: Go ahead and ride it home.200.200! We should get $1.400 if the catcher and can are included. I can use them. etc. Peggy: I assumed they went with the mower. since they are sitting out in the driveway with it. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. what’s your price? Andy: $1. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. Andy and Paula. (bad guy) and implies that his or her side will hold firm on their demands. so I’ll take it. angry. Peggy: I’m hearing one thing from Paula and another from Andy. we won’t need it at the new condo. I don’t know what the deal is now. I want to keep those. Example 1 So.

Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. She realized that it put her in an impossible negotiating position. firm offer if they decided to continue negotiations. causing our reps to spend hours on the road. For the past three years.000 in service calls last year alone because your damn people don’t take care of the equipment. Sandy.000 per month is one of the highest in town. 40 50 Practical Negotiation Tactics . Miguel: Well. the quality of the technicians’ work. your account has taken too much time. Miguel: But not at this ridiculous rate. Sandy: What? First of all. we’re here to negotiate a new service agreement. Miguel: I’ve figured $4. and your training programs.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. She very wisely recognized the routine and forced Andy and Paula to give her a clear. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). And cut the training hours from 55 to 20. And we want to change the 24-hour service response time to 48 hours. And we need to add a clause that holds your company responsible for machine damages. Let’s talk. We estimated that it has cost us more than $50. Liz: But we still want to renew your contract. You are located outside our primary service area. perhaps even unintentionally. Sandy. your rate of $3. we’ve been fairly happy with your responsiveness.

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

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

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

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

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

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

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

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

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

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

and should therefore handle the problem. He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert.” If you spend many hours learning about Health Maintenance Organizations (HMOs). 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. he argues that she is the expert.investment decision or deal with an error in a bill. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . you gain an edge when negotiating a new plan for your company. and Point of Service (POS) plans. Preferred Provider Organizations (PPOs).

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

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

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

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

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

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

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

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

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

as illustrated in the following figure: Seller Resistance Point ($22.000) Target Point ($23.000) Settlement Range ($22. 190–192.500) M $21.000 22 23 24 25 26 27 Initial Offer $28. quick agreement. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse. (2004). 2: Distributive Bargaining Process. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party.500) Fig. Exchanging Initial Offers 61 . Another common strategy is to start with the status quo. “Distributive” bargaining (“win-lose” or “zero sum”) is used. 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. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000 Buyer Initial Offer ($21. Carrell and Christina Heavrin. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. This is a practical starting point that will not anger the other side (and might even be expected).750–$25. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. Adapted from Labor Relations and Collective Bargaining.500) Resistance Point ($25. None is as important as the first one. for example. The negotiator firmly states that it is their best offer in an attempt to gain a nice. such as proposing to continue at the current rate or price.750) Target Point ($24.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. by Michael R.

thus starting out on a positive note. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out).000 and $28. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. The settlement range is the distance between the resistance points. these points have set the outer limits. 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. if the buyer’s initial offer was $25.In this example. After initial offers are exchanged. A target point is the desired settlement value a party has set as a goal when negotiations begin. The most common method of negotiating more than one issue or item is to combine two or more in a deal that gives each side something (Tactic #17: Package Items). the process quickly narrows to the range between the initial offers. and is the range in which most negotiations actually occur.” but the settlement price. usually. it is termed the settlement point – not the “right price” or “fair price. 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.000) is reasonable. 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. thus producing a true “win-win” negotiation. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. When the two parties agree to a price within the range. each initial offer ($21. 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). In the example. 62 50 Practical Negotiation Tactics .000. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. See Tactic #18: Agree on Something As Soon As You Can. the other side does not agree to this value).

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

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

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

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

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

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

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

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

their mom left specific pieces of jewelry and art in the will to each of the girls. Example 1 When their mother died at age 82. we need to sell the house. it is often helpful to package the items in distinct groups and then deal with each package separately. The estate’s assets included a checking and savings account totaling $450.000 with no mortgage on it. and a collection of antique furniture. realizing that the total cost of a deal might make or break the agreement. Anne: As I see it. The house and much of the furniture has been in the Exchanging Initial Offers 71 . one might package all of the financial issues in one group and negotiate on that package as one issue. 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. The house was closed up at the time of their mother’s death because she had been in a nursing facility for a couple of months. a house valued at $250. and the stock and distribute the proceeds. for example. were faced with the task of selling the house and disposing of their mom’s personal belongings. they met at the house. Autumn and Angela. the antiques. In addition. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. along with the cash. can indicate that something you think is minor is really a major concern to your opponent. 300 shares of stock in a pharmaceutical company.000. three ways. When the girls decided it was time to talk about the estate. but I’d like to talk about the house and the furniture.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. A reluctance to include one particular financial item with other financial issues. For example. Anne and her sisters.

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

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

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

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

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

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

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

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

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

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

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

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

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

Tencro: Well. Exchanging Initial Offers 85 . However. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the 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.agree that the road into the industrial park must be widened and a traffic light installed at our expense. let us go back and take another look at our options. The new set-up was so profitable. borrowed money for the new building. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. Other than that. but for the fact that each party did its homework and was aware of the true facts. Tencro was able to pay off the borrowed money in half the time. Future negotiations continued. EDO: Get back to us as soon as you can. and hired 500 new employees.

Jay: No. then $320.000 three years ago). or 3) Make an unrealistic offer (i. They found one they both like that lists for $325. The sellers must be willing to come down a few thousand … Sue: Well.000 and $337.” The perfect first offer. 2) Start out with an old number. particularly if you don’t know the other party’s “settlement range. Jay: No. but you feel cursed because you gave away too much. of course.) To prevent this from happening. and you cannot withdraw it in good faith. which can be very useful). 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. think things through before you make or accept the first offer. Their realtor told them that it sold for $290. Sue: Let’s offer $325.000 this year. 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. thus requiring greater concessions on both sides. at minimum cost. 86 50 Practical Negotiation Tactics . Let’s low-ball them and offer $290.000. never give them their asking price. is the most (or least) the other side will accept.000. and houses in this area sell fast.000 two years ago. before someone else does. That’s a fair price. and that two similar ones on the same street sold for $330.000—what they paid for it. such as last year’s price.. Avoid giving away too much at the outset. The other party will probably come back with an equally ridiculous offer.000. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.e. We don’t know how anxious they are to sell or if they know the market.000 for a house that sold for $185.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.” (You have won a settlement. because you have settled quickly. offer $150.

but who knows what they are planning on offering. (the next day …) Jay: They made us a counteroffer of $307. 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. Lyle Foxworthy. then let them make a counteroffer. Frank: Me too. If.Sue: Don’t be crazy. That’s an insult! Jay: Well. Sue: Then you do it. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer.000. Give us your lowest price. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. The buyers were very motivated to sell.) Bob: I’d do it for $3. I can’t tell our realtor $290. They outlined how they would develop a new employee performance-appraisal system. since they had already bought another house. Both parties felt that they made a good deal. they had offered $325. as Sue had first suggested. realizing they offered too much. Exchanging Initial Offers 87 . was very impressed with their presentation.000 for each of us—$6.000 total. the sellers obviously would have accepted and Jay and Sue.000. the company president. as requested by the human resource director. (Bob and Frank meet privately to discuss the situation.500—half the difference! Sue: Great. and the offer was based on fact: the prior negotiated price.

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

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

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

Classes don’t start until Friday. but he can discharge employees for poor performance. me. actually. if it’s okay with Jerry.Option 3: Mom. so I won’t be able to meet up with you until Sunday. we meet up with him that week for vacation. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Andrea considers Making Counteroffers (The “Give and Take”) 91 . 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. but it should work out all right. we could return home on Thursday and still get a week’s vacation. and one secretary in his litigation unit. Jerry: My friends and I have plans through Saturday of that week. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. Sydney: Okay. and Sydney go to South Carolina before his school starts. Jerry: Okay with me. 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. Sydney: Don’t I start school that week? I don’t want to miss school. one paralegal. Then Jerry joins us until Thursday. Mom: Well. And I miss orientation and start school the next day? Dad: That’s an option. Conclusion The goal was to have a family vacation. It’s not perfect. By proposing numerous options. Mom? Mom: Let’s do it. If we started the vacation on a Thursday. Bob. you have a half-day orientation on Wednesday. and Carl).

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

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

etc. one person’s gain is another’s loss—zero-sum. because it can speed up negotiations and produce a more desirable outcome. and a home theatre.000. These items often involve money). They have a fixed amount of money—$14. 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). Brooks: Right. They both agreed that this is the maximum they will spend on “extras” before moving in. 3) distributive items (those items for which the two parties have exactly opposite interests. In essence. three strategies are used. and finally. Let’s see. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. 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. if a buyer negotiates a $500 reduction of a contractor’s bill. only those with polar-opposite interests that must be divided.) Yes. 94 50 Practical Negotiation Tactics . 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.500. then those which can be easily traded. With distributive items. Maureen: First. let’s see if there are any items we both want. 2) exchange items (those that can be easily traded off—one item for another item of equal value. Exchange. Wow! We are off to a good start. For example. Let’s agree to those things. thus making it necessary to find a middle ground on each. (She looks over the list. It is used only when each side has several demands. that’s $9.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible.). we both want the sod. Example 1 Brooks and Maureen Wilson have just finished building a new home. then the contractor has lost $500 in revenue. the fencing.

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

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

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

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

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

and the union foreman would report directly to the plant manager. the positions of non-union crew leader and floor manager would both be eliminated. No agreement was reached. and d) a hearing with company owner if the matter is not resolved in 20 days. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy.m. Under ABC ‘s contract with the union. but changed his mind when he saw Jasper’s attitude. Jasper: Midnight. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. 10:30 p. midnight during the week is the only thing I’ll consider. and that’s not negotiable.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. Jasper: (without taking a breath) At best. Under the restructuring. b) written complaint to a floor manager if the matter is not resolved in 5 days. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . 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. The appeals procedure would have to be altered to reflect the restructuring.m. and that’s it. is all I’ll consider. The union contract required that management renegotiate this change in the grievance procedure with the union.) Listen. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. Rob: (there is no hesitation in this voice) No. curfew on TV and other noise every night. I want a 10:30 p.

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

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

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

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

We need the city’s help by allowing us to get the city land donated to us (for free).000 a year for operations. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. Kids’ Home hoped to get $500. a non-profit organization for orphaned children. We only have maybe $2 million a year to put toward this charity. depending on the cost of the land. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. the interest income of around $6. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. City: Can’t you borrow the money from a bank to build the facility. we hope to break ground early next year for the new orphan home. Each year. Kids’ Home: As you know. The foundation has a substantial endowment fund.5 million is available for distribution to numerous charities. but the principal of the fund can’t be touched.Example 2 Kids’ Home. but we need some assurance that you will be able to build and operate the orphan home at that location. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . City officals: We can probably give you the land for free. Unfortunately (for Kids’ Home). we’re committed in theory. the foundation’s regular annual grants come to roughly half of their available funds. Kids’ Home: That’s why we brought the foundation’s officials with us. but we can’t fund all of the $12 or $15 million. Estimates for building a new orphan home ranged from $12–$15 million. Foundation officals: Oh. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. They are meeting with the city to ask that the land be donated by the city for the project.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. Mayor’s representative: Well. I hate not to attempt to add some additional areas to the agreement. I’ll go back and tell Madame Mayor your position. and the agreement was renewed with no new provisions. 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. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. the Town Council’s representative left the mayor’s representative with no room to maneuver.represents have to worry that her desire to switch governments might taint the negotiations. In the end. the Town Council representative’s position prevailed. 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. Making Counteroffers (The “Give and Take”) 121 . He either had to end the session or figure out what to say to reengage the other side. Conclusion By remaining silent.

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

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

000. This would be a better benefit in the long run. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. The projections for the next five years were that these costs would increase to about $1.000. then the pension benefits overall will increase by $10. what they really need is for you to cover the costs of dependent coverage. that would be the minimum increase. Everyone was afraid that the dispute would cause an impasse and a possible strike. you are taking a risk on the costs increasing. the airline paid a total of $200. Over the last five years.000 a year over the next five years? Company: Yes.000 figure.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. Company: This could not come at a worst time for us. and the premiums for health care just keep going up.000. If we invest the $200.000 (which we reasonably should have expected to pay in premiums) in the pension account now.000.000. However. dependent coverage could cost us $1.000 to cover the premiums for dependent coverage. Pilots: Look. The company wants to trade paying for dependent coverage for better pension benefits. The airline industry is in a slump. The pilots want dependent coverage paid for by the company. as it has always been. As best as we can tell. But only a few of our people are close to retirement age.000. we know that health insurance premiums might skyrocket.000. and are willing to keep pension benefits the same. and we know that with this new contract term of five years. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. the company can make your pensions much better. With long-term planning and investments. And we cannot afford that $1. with all wage and operations issues resolved fairly early. 124 50 Practical Negotiation Tactics . This is just a cash-flow problem that your members have to understand. Over the next five years.

Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. The $200. Making Counteroffers (The “Give and Take”) 125 . that would be worth it. If we can get two or even three years out of the $200.Pilots: But you do have the $200. It initially believed that the only option was to put that money into pension benefits. The pilots expanded the range of options. so the decision to be flexible was a good one. with a cap of $200. the company will not be expected to give us this benefit.000 the first year on the premiums. Company: If the company spends the $200. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes.000.000 available. however. Conclusion The company was committed to limiting its exposure to $200.000 to either pay one year of the premiums. The health insurance market stabilized. we are. then those funds will not be available to invest in the pension plan. Company: Then it’s okay with us.000 actually carried them through four years. and the pilots knew what to ask for when the contract expired. by agreeing to let the company cap its exposure for dependent health coverage. The dependent coverage is more important to us now than the pension benefits. can we agree to a year-to-year agreement on dependent coverage. or invest in the pension plan? Company: Yes. if they were that high.000? Once the cap is met.

do you want to look at something else? Buyer: No. Saleswoman: With your 740 in trade.… (20 minutes later) Saleswoman: So.” and “low monthly rates” are examples of the salami tactic. I recall the day you drove it out of here. If you are on the receiving end of such a tactic.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. and compare it to your strategic objective. $45. I guess it would be around $600 per month.000 car. what monthly payment did you have in mind? Buyer: More like $300 per month. Phrases such as “for only pennies a day.500! Saleswoman: Yes. I love this car. Buyer: Way too much! Saleswoman: Well. be sure to add up the total cost. Buyer: Yes. I just can’t imagine the monthly payment on a $45. but that was several years ago.” “affordable weekly payments. Example 1 Car buyer: What.000 for a Volvo? I bought the one I’m driving for $19. Saleswoman: I’ll be right back. if I can give you this car with a $300 monthly payment. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So.” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party. it’s a deal? 126 50 Practical Negotiation Tactics .

can’t you? Buyer: Yes. and added the trade-in. do you want HBO? How much? $5. I can’t afford that much. Great! So. but let me see the numbers. Saleswoman: Simple. Once the buyer volunteered that $300 was an affordable “slice. You can do that.00 per month for your service. as promised. Let’s see.00 per month. (looks at the numbers) That looks good.99 per month. but what else must I buy? Only the basic service for $8.” She decided to cut the $45. and payout slices to reach the total price she wanted.00 per month. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. you can get the Disney channel for only $5.000 down. do you want Disney? Yes. But my neighbor pays $39. I can’t discuss another client’s account.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. Sure.Buyer: I don’t see how you can do that. it will be a five-year lease. Making Counteroffers (The “Give and Take”) 127 . with your car and $6. Instead of a three-year lease.000 price into “slices” the buyer thought reasonable.” she had him—she worked around the $300 slices. I can afford $6. down payment.

What about the music package? Yes. Thanks. and SI 1. 3. instead of one total amount. Conclusion The owner thought his neighbor’s service at $39.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. we had that before. 2? How much? $8.00 a month. Disney is for the kids! The sports channels are for me.99 per month. The total is $38.00 per month was far too much. but he agreed to six “salami slices” for a total of $38. and probably felt much better about the total negotiated package because it was presented in modest individual slices.00! Why? Because he judged the per-slice price to be reasonable. Okay. That’s $5. That’s another $5. Great. Any other kids’ channels? Yes. But that’s all! Then we’ll hook you up on Monday.00 per month. 128 50 Practical Negotiation Tactics . and my wife wants the old movies. they asked about the Cartoon Network. Yeah. I really want the sports channels. 2.00.

angry negotiations. but others will walk out the door. today. turned off by the tactic.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does.m. For example. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. When both sides believe that each has equally strong positions. but it can be used effectively when one party clearly has an edge. which can be successful if the opposing team has two or more members who hold different views of an issue. It should be used with caution: It can end negotiations immediately. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). Tactic #33 (The Bluff) is a classic pressure tactic. so are you ready to make a deal? This might convince a few buyers. the traditional car salesperson might tell the buyer. and it can destroy your credibility. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. but in tense. 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. and the use of humor. pressure tactics should probably be avoided. however. “I can only guarantee this price until 6:00 p. Humor might not look like pressure. In some cases. Applying Pressure 129 . it is effective.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and I hope I can convince you of that. in fact. Susie: Daddy didn’t say anything about the shoes. Finally. 144 50 Practical Negotiation Tactics . Conclusion Dad’s use of a “surprise” tactic was extreme. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. The defendants contended that the auditor’s actions were politically motivated. He grabbed it and threw it out the window. Dolly doesn’t need shoes on in the car. so it was worth the risk. He initiated the litigation against the local school board members and several banks that invested the money for the board. Dolly has to have her shoes. he slowed down. Dad tried correcting them a few more times.Andrea: Give me the shoes back. and that they had invested and spent the tax dollars wisely. I want the shoes. The litigation itself had been going on for more than three years. to no avail. Both Andrea and Susie were so shocked by their dad’s action. charging that they breached their duty in their handling these funds. (They continued to argue and whine and pinch each other.) Dad: Now there’s no more fighting over the doll. The tactic was so successful. She can have them later. The auditor asked to meet with the editor to explain his position. Daddy said I got the doll on the way to Grandma’s house. and reached back for the doll. The local newspaper was prepared to urge the auditor to end the litigation. I think I have acted properly. but nothing else up to that point was working. that they never fought over a toy in the back seat of the car again!! Example 2 The editor of a local newspaper was planning on writing an editorial critical of a locally elected auditor who had filed a very nasty lawsuit. they didn’t say another word. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. at great expense to the auditor’s office and the school board.

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

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

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

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

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

Cory:

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

South Carolina. They might worry that the tapes will be made public or given to others. but Susan had only $20. threats. Susan repeated her demand. Alexis. Alexis agreed. Alexis then played the tape for her father. age 15. He asked his elder daughter about the arrangement. the investigator. Then he played the tape. the younger sister. The two sisters had saved up a little money so that they could buy souvenirs. Fred Adams. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. age 14. thus becoming a source of embarrassment. She borrowed a tape recorder so she could ask her father if this was a fair deal.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. and Alexis. Example 1 Susan. are talking about a possible settlement of the issue. or simply “bad faith” methods have been used by the other party. Conclusion For the first time in her life. until Susan said they would evenly split what they bought. The effect on the other party might be even more substantial if lies. Michael Wood. 162 50 Practical Negotiation Tactics . the accused. who was disappointed to hear that she might propose such a deal. Somehow.00. Susan understood the impact a tape recording can have when it reveals a lie. Susan denied it. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. and Jones. were on vacation with their parents in Myrtle Beach. Jones’s supervisor. or used to pressure the other side to agree to certain demands. had $40. Alexis knew this was not fair. this time in front of a hidden recorder. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister.00 to spend.

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

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

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

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

Her husband Jason. attach legs. we’ll take the suite if you’ll throw in free delivery and set up the furniture. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). supposedly the bargainer in the household. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . His tactic was to throw in a “nickel” in order to make lots of “dollars. However. and the delivery carrier doesn’t set up mirrors. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. Conclusion The amount the couple spent was fairly large. “Okay.” Under store policy. Brenda did her part when she said. miles from their home. is expected to dicker over the price.” Many people have witnessed or used this effective negotiating tactic. etc. so the salesperson delivered the suite himself.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.” thus extending the scope of the negotiations. 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. What started out as a single issue is now a combination of a major issue and a much smaller issue. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. 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. With a great deal of effort.

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

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

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

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

Sam Jones. Here’s a list of the five that are about the same size as yours. $237. but the key is to gather facts that you might need—not just the facts that you will need. Sometimes. has owned the house for 24 years and is downsizing to a condo.000. (Next day) We’ve reviewed the records you’ve produced. They sold for: $225. They believe it is overpriced. I’ll get back to you. This offer is for more money than any four-bedroom houses on this neighborhood list. What? That’s $35.000. but the right facts presented at the right time can chill or astound and completely turn things around.000. 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. and $237.000. We love your house. $235. The owner.500.000.000 under the listing price! We realize that. the other party will ignore or refuse to believe the information. Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. $229. and we are countering with an offer of $250. but you’ve priced it way too high.000. but we feel that it’s a fair offer.

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

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

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

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

this tactic can produce an agreement. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. In this process. They bring it out when a dispute arises. and the classic Walk Away (Tactic #48). Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. When two parties believe they have an oral agreement. hours. 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.Stage 7: Reaching Agreement he final stage! It might come minutes. T Reaching Agreement 177 . or even months after the first offer is presented. and the child learns an important lesson about life. this process can easily result in a final settlement. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). If friends or neighbors need to settle something but prefer to avoid the negotiation process. days. When multiple issues are at stake and most have been agreed upon during negotiations. 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. 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. 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.

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

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

180 50 Practical Negotiation Tactics . knowing that it will probably be agreed to in order to continue in the euphoria of the moment. However.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.

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

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

you’ve already told us that. but their continued walkout convinced Michael that they would hold firm. Larry.) Larry: Michael is here again. Michael: Well. after no contact from Larry or Judy. Michael: I have a check right here for 4. Michael Roberts. so why are you here? Michael: I’ve discussed it with my partners. and I’m prepared to offer you $4. Two months later. they were prepared to accept $5. I still want to develop this block. Judy: Larry.5 million. One day.) 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. (Judy and Larry walk into the back room and close the door. How’s business? Larry: Great! I’m surprised to see you again. In reality. which the Bizannes accept. and we gave you our price. let’s eat lunch. Larry: Michael. Larry. What do you think? Judy: Larry.5 million.both of them love their store. Michael: Good morning.5 million for the building. Reaching Agreement 183 . go back to your office. He met with Bizannes twice before. Michael calls on them again with a check for $5.0 million. come out here! (Judy comes out from the back room. with a certified check. You rejected it. and I’m not interested in less. and I only need your building to own it. and he is offering us $4. visited their store. Larry: Yes. today. a local developer. our accountant said it’s worth $6 million. Larry: Judy.5 million.

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

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

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

not the furniture. 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. If we shake hands on it right now. During a discussion. The owners were selling the house without a real estate agent.000. they looked at this particular house on their own. They saw the “For Sale” and “Open House” signs. and decided to stop by to see if they liked the house.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. 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. Bill and Paulette fell in love with the house. They finally looked at a house they really liked.000. Obviously. all the usual stuff in a sale. Seller: We’re asking $152. and one of the other couples looked very interested. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. We’d like to make you an offer of $150. They were not the only couple to come to the open house. we won’t be involving our real estate agent. everyone is busy grappling with the details of the negotiations. however. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. Example 1 Bill and Paulette had been house-hunting for some time. Seller: Yes. At the very least. and while Bill and Paulette had been using an agent to help locate houses. and felt that they would have to work fast to make an offer before someone else did. Bill: Reaching Agreement 187 . Bill pulled the seller aside.

When he had the chance to put the deal in writing. (The seller recorded the offer of $150. Under the section for appliances to be left on the property. and the two area rugs. Sign here. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. since he probably would have missed them) Yes. he left the price at $150. If it’s what you meant. that’s what I meant. and that the problems with her job performance were. and had been prepared to drop his price to $145.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. then we have a deal. the house is yours. and when she refused. the refrigerator. he listed an attached hutch in the kitchen. in fact. real. look this over. a public agency. In her complaint. Bill: (pleasantly surprised to learn that the garbage disposal.000. he began to have “problems” with her job performance. all window blinds and drapes.Seller: Just a minute. In the section for fixtures and miscellaneous items to be left on the property. Conclusion The seller had always intended to leave the garbage disposal. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . Let me just get the standard “offer of sale” form and fill out what I hear you saying. It worked. the hutch. I think we can work something out. Seller: Okay. the hutch. she said that her supervisor had repeatedly asked her out. and the garbage disposal. he listed the stove. Example 2 Monica brought a sex discrimination charge against her employer. and two area rugs.000. The supervisor assured the employer that there was no basis for her complaint. and the two area rugs were specifically included.) Seller: So. The supervisor pointed out that he had a staff of 20 or so women. but I’d like to make sure there are no misunderstandings.

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

Monica accepted the $200. to his disadvantage.000 when all that was asked for was $100. I’ll take your offer back to her and let you know. but word did get out that a public agency paid $200.000 and the conditions of the offer.000 just to get the employee to “withdraw” the complaint.She: authorized to pay $200. It was made clear that the employer had paid the additional $100.000. 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. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. 190 50 Practical Negotiation Tactics .000. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.

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

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

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

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

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

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

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

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

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

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

202 50 Practical Negotiation Tactics . Ms. 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. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville.park and a successful industrial park in the City’s enterprise zone. an agreement between the State of Kentucky. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Jefferson County. the City and a for-profit hospital for guaranteed indigent health care services for city residents.

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