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SECTION I: INTRODUCTION
Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.
Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.
50 Practical Negotiation Tactics
Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful
Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement. exactly. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. • A child wants a new toy now. • A co-worker asks for volunteers for a new project. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. Who. Unfortunately. or engage in an unproductive argument. with family members. but many of us miss the opportunity to bargain in other situations. 4 50 Practical Negotiation Tactics . are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. accept what is given. at a flea market.negotiator! Pass this book on to someone else who needs it. such as these: • You receive the wrong order at a restaurant. Instead. with neighbors. few people understand that normal interactions represent bargaining opportunities. practical tactics useful in real-life situations at work or at home. they pay the sticker price. some will in retrospect even remember being the victim of one or two of them. Most readers will no doubt recognize some of these strategies. But if you scored 8 or less.
what can you do for me?” Or this to a restaurant manager: “This food order is wrong. Flexibility. some resolution must be negotiated. and I don’t have time to wait for another. There must be a conflict in the sense that what one wants is not what the other wants. Mutual goals. you must advise the other party of your intention to negotiate. and each side can involve one person or several people (each representing one “side” of the issue). “Well. “I’d like Introduction 5 . There are flexible elements to the situation.” When you recognize that something can be negotiated. The parties involved are interested in reaching a common goal. 5. What are my alternatives?” During an employee evaluation. Multiple parties. A service repair person gives you an estimate on some work. perhaps the employee can say. Interdependency. since you lost my reservation. For example. The parties involved can make a decision by themselves. A friend is about to select the movie he/she wants everyone else to see. Each one has the five key characteristics necessary for bargaining: 1.• • • • • • • A hotel clerk tells you that your reservation was lost. A neighbor wants to remove an old tree on your property line. condition. The parties are interdependent: what one party does affects the other. be prepared to bargain. Both sides want a settlement. 3. such as price. time. one party is only allowed to follow policy or must wait “until the manager arrives. Therefore. In some situations. All of these situations are opportunities to negotiate. Your boss reviews your past year’s performance. Two or more sides are involved. 2. Your spouse wants to buy new furniture. 4. In some circumstances. Decision-making ability. A teenager wants to buy his/her first car. or items of value. that can be negotiated. perhaps you can say to a hotel clerk.
time to look over this performance review and respond point-by-point. 6 50 Practical Negotiation Tactics . the parties and their interests. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. and the tactics that might move the negotiations along. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. Once a settlement is reached. negotiations can be concluded with a written or oral agreement. and meet with you again. the facts. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. Keep this book handy when preparing for any type of negotiation. 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. “I see why you want to cut down the tree. and use the forms in the back to identify the issues. but I believe it adds value to our house. the other party will realize that you intend to negotiate and do not accept the situation. You can then use one or more of the tactics presented in this book to achieve the best possible settlement.
etc. did you request appropriate compensation? 6. In the past. When making a major purchase. When you purchased your last home or car. have you ever required a written agreement covering chores.How good are your negotiation skills? Place a check in the box that applies to you.? 10. Yes No Self-Assessment Quiz 1. allowance. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 . In the past. or child. The last time you received sub-par service or food in a restaurant. do you believe that you negotiated the best possible deal? 4. do you routinely negotiate a last add-on before you close the deal? 9. Do you wish you could negotiate a change in your job duties or salary? 7. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. spouse. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. As a parent. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. Do you routinely negotiate for better accommodations when you check into a hotel? 3. or division of household duties. but you did not? 8.
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the process will be fairly straightforward. one for another. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. the process will probably take several weeks or months as the parties move through all the stages. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). The Negotiation Process 9 . They’re referred to as “win-win” because each side can achieve their goal. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. decide how complicated the issue is. etc. Examples: • office location (city. If it is a relatively informal situation. On the other hand.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. including those that are less obvious.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. state. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. • 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. The “Quick Model” approach outlined below is good for simple negotiations.
rearranged. What one side gains.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. The Comprehensive Model Negotiation is more of an art than a science. Depending on the situation and the parties involved. stages can be combined. the other side loses. The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book. Examples: • an item sold by one party and bought by the other • wage increases won by one side. 10 50 Practical Negotiation Tactics . but feel free to try them when they seem most appropriate to your specific circumstance. or even skipped altogether.
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. Information.
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
providing them with a very good income for life. as a last resort. and final offer. 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. With only two weeks remaining before a threatened strike. and equipment. inventory. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. as Harvey had for many years. 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. The union is demanding wage and benefit increases. The threatened strike became a reality. The owners. Conclusion Selling their business was the Jaggers’ BATNA. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. The $56 million dollar business took them 30 years to grow. best. but rather what the buyer planned to do with the car. his BATNA was not to hold out for more money. 16 50 Practical Negotiation Tactics . In this case. The union negotiators convinced the employees that this too. selling became an attractive alternative to a strike or prolonged battle. 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. When negotiations with the union became hopeless.” which was refused. was a power play. the Jaggers decided to seek buyers for their land. The Jaggers gave the union their “last. They learned that their assets would be easy to sell and were worth more than originally estimated. The union negotiators thought the Jaggers were bluffing. For the past two months.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. and it now employs 230 craftsmen. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled.
she might have to take a lower offer just to be able to move.000? That’s more than I planned. John: Tom: John: Tom: Tom. What changed your mind about getting rid of it? It is still in perfect condition. and told John several times to let him know if he ever wanted to get rid of it. It is extremely rare—one of only 100 made with that bore and handle. 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. How much are you thinking it’s worth? John: Well. I think so. Just running out of space.000. 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. for example. Just as important is the why. it’s still perfect. A person who has to sell her home because her company is relocating her. This is a good thing to know. so Tom was surprised when John called him out of the blue one day with a proposal. sure. Preparation 17 . 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. Tom: $20. Gosh. at some point. Example 1 Tom had always admired John’s 1861 Confederate rifle. John assured Tom that this would never happen. you still interested in my rifle? Of course. Make me an offer. I’ll have to think about that. I guess I couldn’t take less than $20. you know. because if the company does not provide relocation benefits. I’ve been thinking of getting rid of it for a while. it’s to your advantage to know what is behind a seller’s decision to put it on the market. right? John: Sure. what the other party’s desired outcome is. Are you finally ready to sell it? Yes.
Without some trust. Tom: Okay. Well. BigManu: Rick. let’s do it. and now the two-year requirement has become a stumbling block in the negotiations. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position.500—we’d have a deal. but thought this might explain John’s sudden interest in selling the rifle.500 had an 1861 for sale. let me think about it and I’ll get back to you. fearing that this will put all of his employees out of work. if you could come up a little—say $18. I’ve been thinking about your offer. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. He is two years away from retiring and does not want his business to fail before he does.000. No longer worried about John’s motives. but then he will be happy to retire. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. we really want to buy your company. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. Example 2 Rick. John: Well. parties to a negotiation are not likely to reach agreement. When Tom found out why John decided to sell his rifle. we 18 50 Practical Negotiation Tactics . the owner of a small manufacturing company.) Tom: John. The sale price for the company has not yet been agreed to. However. I don’t think I can go higher than $18. Was Tom interested? Tom declined. Tom now felt comfortable negotiating the price. but I could get the money to you right away.Tom: Okay. and we’re committed to keeping it open as a major division of our company. Conclusion Tom entered into the negotiations suspicious of John’s motives. Rick needs to remain president of the company for the next two years. has begun negotiations to sell his firm to BigManu Company. it made the negotiations easier.
Rick: I built this business from the ground up. I need to give them some sense of comfort if this deal goes through. Within the parameters of efficiency and effectiveness. my employees will prove to you that they are uniquely able to run this place. We still can’t find a way to do it. (Between negotiating sessions. and I hired every one of these people. In hopes of pushing the deal forward. BigManu: You know we want you to stay on and manage this division for us. Let’s talk later. I just don’t want it to change after I’m gone. The price they gave Rick was actually more than he had expected. You’ll be in place to participate in our employment decisions. let’s talk about the job guarantee you wanted. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. Rick: These people are the best at what they do.) BigManu: Okay. BigManu: We just don’t see a way to give you what you want on this. I just can’t go through with this sale. and he accepted it subject to agreement on the two-year employment guarantee clause. Without this commitment. We just can’t make good operational decisions with our hands tied. Working as a division of your company. you will have a say in how the employees are treated. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. I just want them to have a real chance to show you how good they are. they decided to put their price on the table and revisit the issue after a price was agreed upon.cannot guarantee to you that ALL of your employees will be retained for two years. and we think it’s an odd request anyway. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you. Preparation 19 .
to tell you the truth. Conclusion By masking his real objective (giving himself two more years as president before retiring). would it? Rick: Well. This wouldn’t have anything to do with your own plans for the future. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. Let me get back to you. but we won’t be completely tied to operations as they are now. you’ll have a guaranteed “in” to protect your people. I certainly want to do all I can until then to protect my people.BigManu: We intend for you to stay and become a big part of our company. Surely you’ll be able to “protect” your people if they are as good as you say. 20 50 Practical Negotiation Tactics . I’m hoping to retire in two years. that might work. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. Rick: Well. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Rich almost lost the deal.
they control the breaks and environmental factors. Bailey: Cybil: Preparation 21 . it’s a deal. Mother: Hush.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. and go play somewhere! Cybil: Well … Okay. Make up your minds. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. (Think of the showroom tactics used by car dealers. girls. they have the information they need at their fingertips. I like the frog. 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. such as a hotel conference room. the frog is everybody’s favorite. (thirty minutes later) Bailey: So.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. and so on.) Let’s take all our Beanie Babies to my house to trade! Okay. Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. Cybil. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. too.
” The chief negotiator for Team B agreed. around the clock. When negotiations resumed in two months over another piece of property. non-stop negotiations wore down the members of Team A. Team A agreed to change the meeting place. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. About thirty-six hours later. meals. The physical and emotional demands of 24-hour. not one member of Team A was chosen to return to the table. while members of Team B were able to stay fresh. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. 22 50 Practical Negotiation Tactics . The firm deadline was only four days away. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. That’s why she wanted to go to her house. Team B. in their own familiar setting. Team B had clearly used its home turf to gain a substantial advantage. Both sides desperately needed to settle a property dispute. having set up beds. After forty hours of negotiating. They were blamed for accepting the same deal that had been rejected only days earlier. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. and other conveniences in the adjoining room. until we have a settlement.Conclusion Bailey. although only ten years old. as long as they met in the boardroom of Team B. Team A was whipped physically and emotionally. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. was still going strong. Team A agreed to a settlement almost identical to the one rejected days before.
when Will presented Larry with his bill. it became clear that all of those pipes had to be pulled and new ones put in. Will is a licensed plumber. When you first told me about your project.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. but was shocked at the amount of the bill. based on objective criteria (think property appraisals in real estate). Larry: Well. Believe me. I would have charged anyone else much more. and they were much lower than this. about your bill. I did get some estimates from plumbers. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. I anticipated much less work. Larry: Just make sure you’re comparing apples to apples. Larry was thrilled. 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. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. Things turned sour. It was twice as high as the estimates Larry received from other plumbers before they started the project. If you think that the other party knows more than you do.” This can hold up an agreement and cost you in the end. though. When we got into it. I was kind of surprised at how high it was. Let’s get the guys back in who gave you estimates. If they tell us that they either Preparation 23 . and show them the actual work that got done. After all. you are likely to resent them for it and hold out. Will: Larry. rather than give them the “advantage. and he and Larry have always gotten along. This uncomfortable negotiation followed: Larry: Will. Larry: But Will. Larry had expected to pay him for his time.
my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . and no one had ever questioned her performance. Example 2 After Stuart was appointed to the college’s Board of Trustees. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. Comparing the estimates to Will’s actual costs would have been counterproductive. while she wasn’t an expert. Conclusion When the other plumbers looked at the work. The college’s budget officer was understandably offended. Larry: That sounds fair. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. Had they actually prepared bids on the work. they would have had to revise the figures. they had to agree that their early estimates were low. he used his financial expertise to analyze the investments of the college’s endowment 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. I certainly didn’t mean to offend you. The estimates would have been higher than what cousin Will charged. 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’ll revise my bill to meet the lowest estimate you get. she had been investing the college’s endowment funds for many years. they said. He was disappointed in the performance of the fund. Budget Officer: I don’t know what your problem is. and decided to bring the matter up at a Board meeting. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. From a look at the portfolio.
Now. At the end of two months. there might be increased risk and some expenses for commissions. Okay? Budget Officer: Okay. Preparation 25 . but such a strategy also increases risk and costs more money to administer. I find that a more aggressive investment strategy produces a better return. because she did not have the background in investments necessary to trust such advice. if both of them demonstrate a similar strategy and produce better results after expenses. In this situation. but we can ask them to plan and cost out each move. but some of these stocks have really lost their value. the college is a private institution. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. Stuart: No problem. then you and I can talk about changing our investment strategy. I don’t question that they were sound at one time. I don’t want you directing how they’re going to go. and its resources are limited. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. Budget Officer: Yes. 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. Stuart: Yes. but I want to be involved in the discussions with them about what we’re asking.were stale. As you know. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. Stuart realized that the budget officer needed very-specific “criteria” (such as the actual experience of investing the school’s endowment fund) rather than relying on an investor’s experience. but I think they more than offset the gains. considering commissions and all.
baby-sit your sisters. and for going out with my friends.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. It will cost me more than $10—about $35 per week. and ask the other party to add to the list. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. has asked her mother for a $10/week increase in her allowance. wash the cars. (3) more chores. cut the grass. if I give you an increase. Shari: I’m four years older than the next-oldest. not on what you want to spend. not just an allowance increase! There is: (1) a $10 increase. Once you both agree on the list of things to be negotiated. what else can I do. a sixteen-year-old who lives with her parents and three younger sisters. I need more money for clothes and CDs. Shari: Well. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. 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. your little sisters will want equal treatment. Mother: That’s a large increase—and we just raised it last year! Shari: Well. (2) a later curfew. You can’t treat me the same! Mother: Well—so we’re talking about several issues. Mother: But your allowance is based on what you earn in your weekly chores. This strategy can build trust in the negotiation process itself. Example 1 Shari. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics .
Management agrees. was avoided. which the other children would have requested as well. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. The union’s chief negotiator. Then a “win-win” solution could be determined. Shari got the $10 she wanted and a later curfew. since all of their items were included as requested. Now it is time for each side to list their desired outcome for each item. while the mother won a Saturday house-cleaning and a night out each week. opens by proposing the list of items. The trading of items (where initial demands are discussed and agreed upon) begins. you get to stay out an hour later that night. while your Dad and I go out. but unlike your sisters. I’ll pay you $10 to babysit every Wednesday night. item #11 (the clothing allowance). An allowance increase. Now we have a package deal to propose … Preparation 27 . and item #23 (the wellness program voucher). And if you clean the whole house on Saturday. in the first session. if you agree to our proposals on item #3 (the paid vacation schedule).Shari: Right! Mother: So … I suggest no allowance increase. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate).
Then negotiations can resume on the remaining 43 items.Conclusion In most labor negotiations. the two sides will at this point sign and date the list of proposed items. thus removing them from the discussion table. 28 50 Practical Negotiation Tactics . other trade-offs are proposed and agreed to until only a few items remain.
(For the next three years. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. Prepare carefully. he saw an elderly man get in his dream car and drive away. He stopped and knocked on the door. I love this car—restored it myself. Hi! What can I do for you? I’ve admired your ‘63 Impala for years.000? No. my name is Bob Hillard. time of day. Not even for. day. One day. on Briarwood Road. but money doesn’t mean anything to me at this point in my life … Well. which turned out to be only a few blocks from his own house. and do your homework. The external pressures put on the parties involved (which might not be related to the issues under negotiation) can sometimes be used to advantage if you know about them. he noticed a FOR SALE sign in the yard.) Preparation 29 . Bob followed the man home. Would you possibly be interested in selling it? No. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. One day. It was nice meeting you. and general circumstances under which negotiations take place can substantially impact the outcome. Bob made it a point about once a month to go out of his way and drive by the man’s house. say. just out of curiosity. I live a few blocks from here.Tactic 6: Timing Is Everything The exact month. as he left the supermarket. That’s a generous offer. thanks. As the man got out of his car. $12.
A majority was needed to pass the partnership agreement. (after a careful inspection) It’s a very nice car! I’ll give you $12.000. to seal the agreement at the courthouse? Sure. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. Can I see it? Sure. I’ll see you on Monday. the proposal would die at midnight. as a matter of fact. if a seventh vote could not be found by the pro-agreement side. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. that’s a fair price. Well. for tax reasons. A third vote at 3:00 p.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. I can’t take it with me. Can you come back on Monday at 10:00 a. The board members had met twice before. I’m moving to California to live with my daughter. and the vote was a 6-6 tie each time.m. Then it’s a deal? Yes. Conclusion While Bob did not achieve his goal during his first negotiation effort. December 31st.m. Example 2 It was Sunday. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. resulted in another 6-6 30 50 Practical Negotiation Tactics . Follow me. beyond which the project would have to be abandoned. and I promise to take good care of it. so I guess I will be selling it. The partner organization. had issued a deadline of December 31st.
For weeks. 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. At 5:30 p.deadlock. Both sides caucused: The leaders on each side met to negotiate a compromise. The measure passed 6–5 at 5:45 p. the project had been stalled by 6–6 votes. That effort failed...m. in the end.m. during an hour break in the meeting. timing was everything. A member of the pro-project group quickly called for a vote after the leader gave a signal. as predicted. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. When the meeting resumed at 4:00 p. a member of the anti-project group left the room.. and the meeting was adjourned.. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. Then. and it worked. He planned for it accordingly.m.m. Preparation 31 .
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and Tactic #48 (Walk Away). if you want to begin in a friendly. you must first evaluate your needs and those of your opponent. If you prefer to take a firm and direct approach. Some of the tactics listed in this book are only suitable for single-session negotiations. as well as their bargaining history and financial and political positions. Tactic #33 (Bluff). A neutral. Be sure you are aware of this at the beginning.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. such as a buyer and a seller or a city and its union. 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 . or one-time-only. In some cases. Before you can do this. such as Tactic #19 (Make a First and Best Offer). Identify all outside influences and hidden agendas before you develop your strategy. Are there any outside people who might influence the process. might step in and help settle negotiations between a union and administration negotiators. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. The overall strategy chosen does not limit the use of other tactics. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). uncaring approach (Tactic #9: Control Your Emotions. 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. decide whether the negotiations should be continuous. Tactic #43 (Nickel and Diming). Third parties sometimes have their own hidden agendas. for example. For example. such as a third-party negotiator. a third party can serve as a mediator (a legislative body. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. After you have evaluated these factors. such as actively trying to keep one of the two parties from winning a contract or influencing a colleague or spouse to accept an offer for personal reasons. but in practice it will likely influence the whole process. as it can substantially alter the negotiations between two primary parties. cooperative manner. Tactic #12: Find Common Interests can be helpful.
For example. and the buyer was able to completely renovate the house and still have a great deal. with “All right. The agent explained that the seller was desperate. but the inside was a complete turnoff. two people on the team will be more successful because they evoke different emotions from the other side. His teenage sons had “trashed” the house. The desperate owner agreed. The buyer said he wasn’t interested. the seller’s agent called the buyer about the property. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness).side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. If there is a significant weakness in your position. 34 50 Practical Negotiation Tactics . 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). half-serious.” The agent took the offer to the seller. By assuming opposing roles. Weeks later. I offer half the asking price. “Please make any offer—they are motivated!” The buyer responded. The buyer loved the location. 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.
If you consider the demand ridiculous. and then look at the demand from your opponent’s perspective. Finally. Carol wants $160. as well. The market hasn’t gone up that much in six years. It’s a good neighborhood. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.000. your request must not be so low that the other party concludes that you are not negotiating in good faith. Surely there’s some flexibility in your asking price.000 is very high. one buyer shows some interest. but certainly not exceptional in any way. Carol: Maybe not. but quite frankly. it is likely that your opponent will. She has had it on and off the market for the last five years. with no success. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. but we simply can’t take less than $160.000. but not so high as to end the negotiations before they begin. but the house has increased in value. You are not likely to get more than you request. we think $160. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. We also think that the neighborhood has improved over the last few years. Buyer: The air conditioning might have increased the value of the house. so do not underestimate what you might be able to achieve. Be realistic. and just refuses to reduce it. However. Planning a Strategy 35 . After all. six years ago you bought it for $60. Anyone buying the house would want to change wall colors or add new carpets. Buyer: We really like the house. Each time. but the redecorating is of little value.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. so think this through well ahead of time. Carol: We really want to sell. Your demand should be high enough to give you room to compromise.000. And I don’t see a lot of difference in the neighborhood. First.
the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. enjoying a statewide reputation for quality representation.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. but they have no idea what the value of their firm’s name might be in this nearby city. 36 50 Practical Negotiation Tactics . Carol drove off a potential buyer by setting an asking price that was just too high. we are certainly interested in your request to “buy” our firm name to use in your city. In any event. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites. We’re curious.000 immediately. Here’s how the initial negotiations went: Partners: Well.000. as to how you think the name is going to benefit you. Example 2 The law firm of Bits & Bites was a Sioux City institution. though. the buyer took it as a signal that either Carol didn’t want to sell. The partners are interested in selling the name.000 offer by coming down in price at least a little. When Carol refused to budge. Neither Edward Bits nor Edmund Bites.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. were still alive. the founders of the firm. Inquiries to other law firms were not very helpful because in almost all of the instances. The other law firm was prepared to pay $100. and then $10. or she has unreal expectations.000? Carol: We really can’t take less than $160. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100.
I really don’t feel comfortable doing that now. that’s just our initial figure.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. We probably won’t be insulted. In every instance. We should assume. we do. If at any time we feel that you have “harmed” our name. you have a very solid reputation there. we reserve the right to withdraw our permission. Yes. because you are in the state capital and your firm has handled a lot of high-profile political cases. And even though you don’t have an office in our city. of course. I’m kind of embarrassed now. because we were not even close to that number. it would be impossible to create a new name out of the names of our key partners. (concerned about loosing the opportunity) Wait. expect to pay for that. Well. starting with the ten partners you describe. one of these two attorneys carries the surname of the firm they are leaving. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . (surprised) Well. then. We weren’t really thinking about that amount of money. Thanks so much for meeting with me. that is a very high number. but we get to keep all of the money we’ve received up to that point. So. I guess this is just not something we’ll be able to pursue. Using the Bits & Bites name can only enhance our profitability. Give us some range. To offer it now would be an insult. Let’s just pretend this didn’t happen. What number were you thinking about? Well. And we. we want $500. that you anticipate to build a very profitable law firm.000 initially. and then 10% of your profits each year for as long as you use the name.
because there was no “objective” criteria available to help them set a reasonable price. Either side could have asked for too much. 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. It immediately dropped the idea. In this situation. rather than negotiate. Both parties were probably at a disadvantage. The price they were willing to pay would have indicated what the naming rights were worth. 38 50 Practical Negotiation Tactics . since they had initiated the contact.
I’ll go home and you can call me if you two can reach an agreement. we won’t need it at the new condo. I heard that you want to sell your riding mower. I don’t know what the deal is now. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you.400 if the catcher and can are included. Peggy: I assumed they went with the mower. Peggy: I’m hearing one thing from Paula and another from Andy. etc.200. Example 1 So.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. angry. Peggy: So. you’re really moving! I hate to see you leave. Andy and Paula: Yes. Andy: No. what’s your price? Andy: $1. and I know how you take care of things. so I’ll take it. Peggy: Planning a Strategy 39 . And take the leaf-catcher attachment and the gas can. (bad guy) and implies that his or her side will hold firm on their demands. I want to keep those. Peggy: That’s fair. while another acts difficult. Andy: No. Paula: Go ahead and ride it home. only three years ago. threatening. Half what it cost us new. Peggy. since they are sitting out in the driveway with it. not for $1. Andy and Paula. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. I can use them. They cost about $300.200! We should get $1. Andy: I want them… Paula: Go ahead and take them.
Liz: But we still want to renew your contract. And cut the training hours from 55 to 20. your account has taken too much time. She very wisely recognized the routine and forced Andy and Paula to give her a clear. the quality of the technicians’ work. Miguel: Well. We estimated that it has cost us more than $50. firm offer if they decided to continue negotiations. For the past three years. we’ve been fairly happy with your responsiveness. your rate of $3. and your training programs. Sandy: What? First of all. And we want to change the 24-hour service response time to 48 hours. Miguel: But not at this ridiculous rate.000 per month is one of the highest in town. causing our reps to spend hours on the road. You are located outside our primary service area.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. perhaps even unintentionally. we’re here to negotiate a new service agreement.000 in service calls last year alone because your damn people don’t take care of the equipment. Sandy. She realized that it put her in an impossible negotiating position. Miguel: I’ve figured $4. Let’s talk. Sandy. 40 50 Practical Negotiation Tactics .Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. And we need to add a clause that holds your company responsible for machine damages. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm).
Miguel! We’ve worked out a deal I think you can live with. but Miguel’s right. Sandy. Sandy. Our customer base has grown. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Planning a Strategy 41 .Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. I want to keep you as a customer. Liz.m. even though it was far above the previous contract. these terms will put me out of business—I’m a small 20-person operation. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. I’m afraid our relationship is over. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. I’ll explain on the way back to the office. I’ll stop back about 2:00 p. Any luck. (Three hours later) I’m back. I’m going on to lunch. If not. Sandy. with a position he knew was unreasonable. you two? Good news. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. I hope you can meet my terms.
00 a minute.Tactic 9: Control Your Emotions Stay cool. in fact. and might even harden your opponent into an unfavorable position (for you or for both of you). when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company. So.10 a minute rate at my office location. Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. but I recently was sold a $. He had. I have a problem with my recent bill and my billing rate. such as deals on computer packages and phone services. I noticed this. It seems that the rate you are charging me on my home phone is $1. 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. he was very unhappy. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. because we have had a sick relative out of town and we used long distance a lot this past month. The fault was partly his because he did not stay on top of changes. 42 50 Practical Negotiation Tactics . This will put you at a distinct disadvantage from this point on. made some very good purchase decisions for his small business. How may I help you? Hello. He decided that the best approach was to act indignant when he spoke to the company representative. 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.
But as a very good customer of yours.10 per minute rate on your long-distance service. 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. I see that the rate you are being charged is the rate we offer for the type of service you have with us. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. Mike. It hasn’t been increased at any time. I realize that that might be the rate I started paying when I first took your service over eight years ago. to begin now. But I am able to offer you a $. how would anyone who might only have residential service even know to ask? Well. Customer representative: Let me pull up your account. but this was quite a shock.I expected the bill to be higher than usual. we certainly would have discussed your options. and I also realize that if I had examined my bill closely. Had you brought this to our attention before. (beginning to sound irritated. of course it is not always possible to give existing customers some of the “offers” we have out. I would have known I was paying too much. Well. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . I would think you would have given me the best rate you offer new customers.
controlled voice) I need to talk to someone who can do it immediately. I … (interrupting and in a stern. don’t think this is directed at you personally. The best we can do is fix the rate for the future. Wait—I’ll get my supervisor. I would hope that you would credit my account for this better rate for past service. and I should be treated with more respect! I’m sorry. He was walking a thin line. she kept Mike as a residential customer as well as a business customer. and I want to speak to someone in authority so I can terminate my service. but I can’t do that. 44 50 Practical Negotiation Tactics . We certainly don’t want to lose you as a customer. a long-time customer of your company. between controlled. however. 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 $. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. (with a much angrier tone) Madam. after all. In doing so.Mike: I would imagine so. strategic anger and abusive behavior. which should rightly be $50.10 per minute. I am. but I am very angry with Over-the-Air Company. The latter would not have produced the desired results. either. Mike’s willingness to show a measured “flare of temper” brought results. there’s no reason for this conversation to continue. But I’m looking at a $500 longdistance bill. If you can’t get me someone to talk to.
that’s just not fair. and it’s getting old. and it’s not what we’re even talking about. lesssenior employees might be at greater risk of injury because they have to handle explosives. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . They will be putting the plant AND their fellow workers at risk by not being here. 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. On those overtime shifts. and that they should be asking for a fairer base wage for the work they do for you. they would become dissatisfied with their pay and want their base pay increased. and you just can’t be too careful.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. The employees’ negotiator finally decided to use “indignation” to break the stalemate. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. Working with fireworks is working with explosives. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. I’ve got to have the employees with the most experience to protect this place. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Owner: Now. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks.
The safety of the plant demands it! (standing up to leave) This is just ridiculous. No one who takes a job with us can be unaware of that. sit down. either the employees are properly trained. After the employees’ negotiator threatened to walk out. That’s all. The end result was that the most-senior employees did win the right to refuse overtime. The negotiator was also running a risk with his flare of temper. 46 50 Practical Negotiation Tactics .) Now. Either they are properly protected. but not all? Conclusion The owner was on shaky ground with this one.Owner: Negotiator: Owner: Negotiator: Owner: sure these employees can protect themselves? Are you telling me that your employees are being put in dangerous conditions without adequate training and safeguards? No. the negotiator would have had to find a way back into the negotiations without losing ground. though. Sit down. not at all. All I’m saying is that the most-senior employees have to be on the overtime shifts. I’m not coming back. or they’re not. Then you can’t have it both ways. most of them continued to take all the overtime they could get. Until you’re ready to talk about that. You are not addressing the real issue for you: money. What if we were to agree that the senior employees could refuse half of the overtime offered to them. But the fireworks business is a business that involves risk. don’t be so hasty. But we protect our people. or they’re not. now. (He begins to walk out. he became more reasonable. In practice. Had the owner let him leave.
The second party then decides to either buy it at that price and pay the first party. Susan. Planning a Strategy 47 . However. I’ll give you 48 hours to decide the price.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. (two days later) Mary Anne: Well. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. Both sisters covet it. Mike: Mary Anne.” is the recommendation of Howard Raiffa. with winner taking all. 2) They can flip a coin. and split the proceeds. A fourth option. The first party decides on a price for which he or she will either buy or sell the object to the second party. The 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. with the highest bidder paying the amount to the other side in compensation for their loss. called the “Reciprocal Buy-Sell Offer. 3) They can agree to sell the object to a third party. you’re the oldest. so you set a price at which you agree to buy or sell the coffee grinder. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. All the rest of the estate has been divided among the family. Mike. since this one is in perfect shape and it was Mother’s. Then Susan. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). the executor of the estate. a well-known negotiations professor from Harvard University.
Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. which will bind us to the outcome. Both came to Raiffa to help negotiate a settlement. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). After I open the bids. I choose to buy it. Here is my check for $800.Susan: Mike: Well. in writing. Two business partners had been working together for ten years to build a successful business. You will both agree. (sixty days later) 48 50 Practical Negotiation Tactics . They thus were able to determine the highest price each was willing to pay for it or receive for it. Lectures on Negotiation Analysis. Both sisters felt that the process enabled them to resolve the issue fairly.” Howard: Since in this case you are talking about a multi-million-dollar business. Thanks for making this last step as easy as possible. and then decide how much more “emotional value” it held. to submit a sealed offer to buy/sell the business sixty days from today. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. They accepted his suggestion to use the “reciprocal buy-sell strategy. I suggest a slight modification to the process. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. I’ll pick it up tonight. 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.
your bid is $170 million. Abe. you agree to sell your half-interest to Bobby for $180 million. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. your bid is $190 million. Planning a Strategy 49 . I will arrange to sell him my half-interest for $180 million. 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. but only if they could become the sole owner. And I will arrange financing to pay you $180 million to become sole owner. Agreed. Conclusion Both parties wanted to keep the business. and to close within ninety days. Bobby. and we close by July 1st.Howard: Abe: Bobby: Abe. and both men had carefully estimated the market value of half the business. Bobby was willing to pay more than Abe to remain sole owner.
he decided upon a strategy: First establish himself as the “dimension expert. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . When he showed his wife the detailed spreadsheet.” but there were substantial differences in price—differences that the wife did not see as a problem. It can also work in reverse: establishing the other person as the expert. He thus ended up having greater negotiating power. and forcing him or her to control the discussion of the issue. Looking at these statistics. and created a spreadsheet to compare the five best-rated couches on their list.” and then argue for the frugal alternative. They both expressed an interest in finding a couch that offered the most “interior” space. she glanced at it and immediately deferred to his opinion. The husband found the dimensions of the couches in the brochures and Web sites. Example 1 A young couple were discussing a possible purchase of new furniture for their living room.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. the one he wanted (one of the least-expensive) was superior. Based on seating capacity. This approach can also be reversed: The wife in this situation is a banker. The couple decided to limit their selection to those rated “excellent. When it came to comfort. 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 the husband felt like he saved them hundreds of dollars. the one that was the most expensive was superior. 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.
you gain an edge when negotiating a new plan for your company. he argues that she is the expert.investment decision or deal with an error in a bill. and should therefore handle the problem. 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 .” If you spend many hours learning about Health Maintenance Organizations (HMOs). He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert. Preferred Provider Organizations (PPOs). 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. and Point of Service (POS) plans.
I missed dessert the other night because I had to get to baseball practice. she made them share whatever it was. Example 1 When Russ and Bill got home from school. and their mother was tired of it. point them out at the very beginning of negotiations and refer to them throughout the process. Usually. The two boys fought over the last piece of everything. and then asked their mom for a chance to negotiate with each other. neither of you want to be embarrassed at the outcome. When they boys returned. she decided to try something different.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. This time. If this was chocolate icing. and so on. the last piece of cake will get thrown away. I also took out the garbage last week without being asked twice. here’s what they said to her: I think I should be rewarded with the piece of cake. particularly when things seem to be at a standstill. Russ: 52 50 Practical Negotiation Tactics . you both want to complete negotiations by a certain date. because I am so conscientious about my paper route. like we usually have. and neither boy was very happy. Unless you can convince me otherwise. That simply rewards your continual squabbling. They immediately began to fight over it. you want to reach an agreement that is favorable to an outside party. These positive things are part of your goals and objectives. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. and I really love the banana/butternut/ sour cream frosting on this cake. they saw that there was one piece of cake left over from their mom’s bridge party. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. Be clear on what you have in common at the start. The boys quickly huddled. I wouldn’t care so much.
Planning a Strategy 53 . I can have the part with the icing and Bill can have the part with the cake and filling. she opens her shop at 7:30 a. she got a visit from some of the residents. and her children were in school. and that’s not my favorite either. to 3:00 p. That sounds like a wonderful solution.m. and better than a fast-food restaurant with late-night hours and a drive-through window.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. Residents: Marilyn. and I really like white cake. I helped with the bags without being asked twice. Marilyn originally set her shop’s hours for 10:00 a. Conclusion Once the boys realized that they had a common interest—not letting the cake get thrown away—they were able to negotiate a solution both of them could live with. so that your customers can park on the street. This cake is white cake. and keeps it open longer so she can attract customers on their way to and from work. One day. Customers have started to park in nearby apartment lots. because there is no parking along the street during morning and evening rush hours. so these hours worked out well. 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.m. We really want you to go back to your original times. Now that her children are in college. We realized that if we cut the cake lengthwise. The last cake we had was chocolate cake. It was the type of shop the nearby residents preferred.m. your new shop hours have caused your customers to park in our parking spaces. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood.
rather than after work. 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. and I close at 4:00 p. Marilyn: Conclusion Marilyn needed the extra parking. my customers can’t park on the street. if residents haven’t left for work yet. The parking lot used for apartment residents is probably full from 7:30– 9.m. Most of our residents are gone by 8:00 a.m.m. Okay. And we don’t think you want your customers’ cars towed. or so anyway. 54 50 Practical Negotiation Tactics .. I don’t think that would be very good for business.m. I really need that extra income to stay in business.? Residents: We certainly want you to stay in business here. and 9:00 a. and the residents needed Marilyn’s shop.m. and is probably empty in the afternoon if they haven’t gotten home yet. Do you? Marilyn: No. But I really am increasing my sales by being open longer hours. The shared parking arrangement did work out for Marilyn. then we’ll try and accommodate you. It is very costly to have cars towed.m. and between 4:00 p. let’s see what the options are. So. Lets try it. and 9:00 a. we have to be willing to tow the cars that violate it.00 a.I’m sorry this is happening. 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.. Between 7:30 a. But in order to keep my new customers. if I go ahead and open the shop at 7:30 a. and see if it works.. and 6:00 p. We think they’ll be agreeable to the morning parking.m. I have to convince them to come before work.m. the off-street lots probably won’t be used by my customers. If you need to have the shop open more hours.m. Identifying their shared interests caused the nearby residents and the customers to reach agreement. and usually the car is gone by the time a tow truck shows up anyway.
Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. Example 1 Four adult children have gathered at the home of their recently deceased mother. A few hours? I can’t—I’ve got to leave shortly for the drive home.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. and start choosing things. Then we can sit down at this table at 3:00 p. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. etc. That will take days! I haven’t been in this house for twelve years. how should we go about dividing up the furniture and possessions? I can’t talk about it. I don’t. the first. one at a time: the youngest. How can I do that? You all live in this town and you know this house. we can each take turns selecting things … Like each tool or dish.m. let’s all take a few hours to look around. Well. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests). 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. A deadline can help you make the best possible agreement in the shortest amount of time. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. Well. But at Planning a Strategy 55 .
if I cannot carry a negotiated and signed deal to my board by noon on December 31. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point.m. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. All of us must come back before Saturday to take what is ours—agreed? Okay. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. Allan: Let me confer with the city attorneys. Agreed. Sue. we all leave. Example 2 Allan: As the negotiating team for the city. this is December 29. if we are not finished. 56 50 Practical Negotiation Tactics . However. David: I understand your concern. your attorneys know the tax laws. And besides.. and I appreciate your interest in the historic structure. Okay. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. can sell or give away what is left. December 31.Sue: Mary: Jenny: 5:00 p. being the oldest.
we can’t get the reports we wanted in 48 hours. 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 .) I understand the December 31 deadline. Conclusion Knowing the external deadline gave David a significant negotiating edge. and I don’t like it.Allan: (One hour later. Let’s continue.
Jason: Mom. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. first-quarter grades are coming out at the end of the week. we need to talk. and we used it a couple of times. but that was actually a different workbook. He decided to preempt the discussion in order to make the best deal. I’ll need to buy it again. Did you buy it? Jason: Yes. and I missed some assignments. But don’t lose it again. His mother disapproves of his study habits. before your opponent tries to catch you off-guard. The objective is to negotiate from a position of strength. and you can neutralize its effect on the negotiations. as well as strengths. Control the use of the information. Unfortunately. Mom: What’s that? Jason: A few weeks ago I lost my workbook. but I have a problem in my Spanish class. There will be times during a negotiation when you will want to catch your opponent off-guard. I’ll give you money for it. and Jason knows he is getting a D in Spanish. and this usually means having all the right information. One day mine disappeared. Mom: I gave you money to buy a workbook a few weeks ago. as well as those of the other side. so he was able to prevail upon her to let him continue. Then the teacher went back to the first one. I bought the second one. We had one at the beginning of the semester that we were using pretty often. Mom: All right. but his grades are good. don’t get mad. Now.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. but remember that both sides have weaknesses. Have a clear goal in mind AND all the information you need to make your points. 58 50 Practical Negotiation Tactics . while watching TV. He knows that a D will mean that he will have to change the way he studies. and one of the ways to do that is to reveal a weakness at the beginning.
Environmental Science. but all three deals Planning a Strategy 59 . 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. The location was ideal for a convenience store or a fast-food restaurant. but I think you do need to change your study habits. she trusted it more. Mom: Well. and the D is directly related to my losing the book. he was able to continue to study the way he wanted to. then I’ll agree to make changes. Although his Spanish grade was only a C+. Thanks. It’s because I didn’t have the book. Obviously. The work I did turn in was fine. or borderline B. I’m sorry. my study habits are okay. His explanation made sense. Jason: Spanish is just one class. But that Spanish grade needs to come up to a B!! Jason: Okay. All of my other classes are A. Example 2 Jane once owned a piece of property she wanted very much to sell. Conclusion All of Jason’s grades did improve over the next quarter. I’ll give you more time. And I know I have to be better about getting in all of my assignments. and since he offered her the information up front. Since I missed some assignments. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. Its owners found out that at least three other buyers had been in contact with Jane. 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. Mom: Well. Mom.(maybe C+). I think I can do that. 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. all right.Jason: Another thing. If I don’t pull the D up to a C or better. I don’t think you’re taking your schoolwork seriously enough. And those are hard classes—Algebra.
The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. A tentative deal was signed. When she contacts you. and was able to politely ignore her. Jane: Oh. either. she will want you to think it’s the whole neighborhood. really. we’re not interested in neighborhood fights.had fallen through. there were no unpleasant surprises to stop the deal. Pizza Boy: We’ve checked the property out. however. Pizza Boy was prepared for her call. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. But unlike your company. she started her campaign to keep them from closing the deal. I’m sure. What are her grounds for complaining? Jane: She doesn’t have any. I think you’ll find that this is only one person. let’s assume that you are right. 60 50 Practical Negotiation Tactics . the other interested buyers already have businesses in the neighborhood. Pizza Boy: Well. You are a big enough corporation to withstand her objections. Pizza Boy: Well. though. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. I know. When the neighbor heard about the new buyer. Actually. I’m very happy you’re interested in my property. This is how the negotiations went: Jane: Pizza Boy. since they were well aware of the negatives. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. The real problem. it’s only the neighbor to the right of the property who has a problem. They decided not to fight a disgruntled neighbor. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. which was way below the price they were actually willing to pay. Furthermore. and it’s zoned for commercial use. What are you asking for the property? Conclusion Jane told them her asking price. however.
Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.000) Target Point ($23. Another common strategy is to start with the status quo. 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. 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. 190–192. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer). quick agreement.000 Buyer Initial Offer ($21.000) Settlement Range ($22. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.500) Fig. Carrell and Christina Heavrin. 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. as illustrated in the following figure: Seller Resistance Point ($22.500) M $21. This is a practical starting point that will not anger the other side (and might even be expected). by Michael R. 2: Distributive Bargaining Process. “Distributive” bargaining (“win-lose” or “zero sum”) is used.750–$25.750) Target Point ($24. Exchanging Initial Offers 61 . for example.000 22 23 24 25 26 27 Initial Offer $28. The negotiator firmly states that it is their best offer in an attempt to gain a nice.500) Resistance Point ($25. None is as important as the first one. (2004). Adapted from Labor Relations and Collective Bargaining. such as proposing to continue at the current rate or price.
The settlement range is the distance between the resistance points. 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). Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). yet is positioned well above or below what the party believes to be the opponent’s resistance point (thus avoiding the so-called winner’s curse).000.In this example. the other side does not agree to this value). these points have set the outer limits. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. the process quickly narrows to the range between the initial offers. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. 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. each initial offer ($21. if the buyer’s initial offer was $25.000 and $28. See Tactic #18: Agree on Something As Soon As You Can. thus producing a true “win-win” negotiation.” but the settlement price. When the two parties agree to a price within the range. 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. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. 62 50 Practical Negotiation Tactics . A target point is the desired settlement value a party has set as a goal when negotiations begin. and is the range in which most negotiations actually occur. it is termed the settlement point – not the “right price” or “fair price. In the example. After initial offers are exchanged. thus starting out on a positive note.000) is reasonable. usually.
so we’ll have the party from 7:00 p. and I already have 25 names. If negotiations seem stalled.Tactic 15: Caucus If you are part of a negotiating team. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. Example 1 Shelly’s “Sweet Sixteen” party was coming up. because it might disturb the neighbors. You can invite up to 20 of your friends. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations.–10:00 p. the negotiations got out of hand when Shelly’s dad forgot what had been decided. 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. Unfortunately. If the negotiations are heated. We’ll just have chips and soda. without revealing their ideas to the other side. and presumably had an agreement. a caucus can be used as a break to calm the situation down.m. If the team is feeling pressure to concede on certain items. Her mom and dad had already talked about it privately. There are many ways to use this strategy.m. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. We don’t want it to be a late evening. If the negotiations have suddenly gone in an unanticipated direction. so her parents sat down with their daughter to discuss the details. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. or if a member takes on a role in the negotiations that has not been assigned to them. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. Shelly. Mom: We’re planning on having your party here on Saturday night. make use of the opportunity to call for a caucus. And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . A caucus gives you an opportunity to work out problems with your own team in private.
Dad. We could play records and you guys could dance.—that’s so “baby. That would be great! It would keep everyone entertained. Actually. we’ll call you when we’re ready. Oh. Your dad and I already talked about this and agreed that 20 guests would be the limit.Dad: Mom: Dad: Shelly: Mom: Shelly: Mom: Shelly: Dad: Mom: Dad: Shelly: Dad: Mom: on the friends I’ve made over the summer at the pool. Shelly. and then the number of kids won’t matter. I guess the VFW will work. alone. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. It’s special!!! Well. okay.m. Jerry from down the street is in a really good band that all of the crowd likes. (During the caucus. That sounds like too many for here at the house. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. In fact. I think the band would be fine. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . And they can’t go home at 10:00 p. Mom! This is my “Sweet Sixteen” party. (with some irritation) I’m not sure. And midnight is definitely too late. we could rent the VFW hall. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. we need to talk. Time out! Dad.” They would never expect a party to end before midnight. I’m sure we can ask them to tone it down a little. (excited) That would be so cool. We’ll get a band—everyone does. I think we can handle a few more kids—how about 35? And midnight sounds okay.
we will be better able to chaperone. sorry. this mom-and-dad negotiating team became unglued during the negotiations.m.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. please!! 11:00 p. Your mom and I agree—11:00 p. and not a huge production. When they called Shelly back in. is for little kids!! No. Agreed. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . Dad.m. That’s so lame. Okay. That way. too? No way!! I want presents!! Conclusion In spite of their prior planning. All right. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. to 11:00 p. her mom presented the revised proposal. and we will need to approve the list. we’re going to rent the VFW hall. Example 2 The contract negotiations between the company and the union had been going on for days.m. causing them to lose control and make compromises they hadn’t intended to make. but we’ll schedule the party for 8:00 p. can’t we? No band. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. But we can have the band. midnight. but your dad and I agree on getting a DJ to play.) Okay. but no Sweet Sixteen birthday party decorations. A DJ? I guess that’s okay. Does that mean no presents. But you are limited to 40.m. And we’re serving chips and sodas. and you can invite more friends.
The tuition benefits will encourage the workers to be prepared for new job opportunities. Union: (angrily) I’m not presenting this proposal to my people. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. Union negotiator #2: Please—just a moment outside. What is this. Tuition in place of health insurances? They’ll think I’ve lost my mind. it’s a good proposal. and the following conversation occurred. The company’s negotiator didn’t recognize the misunderstanding. 66 50 Practical Negotiation Tactics . Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. A lot of employees have spouses who can get health insurance coverage through their work. With the cost of college educations so high. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. many will want to use it for their children’s education.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. 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 union’s lead negotiator misunderstood the proposal.
the parties returned to the room. we’ll be back in 5 minutes. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. I think that what you’re proposing is a really good idea. and the parties were able to complete their negotiations. (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone. let’s move on. Negotiator #1 regained his footing. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. Good. Exchanging Initial Offers 67 . and I apologize for explaining it poorly.Union: Union: Company: Okay.) I’m sorry. Now. I thought that the contract would cover one or the other for everyone.
Hobbs. Salesman: Well. quickly checked the dealer’s inventory of sport utility vehicles in stock. and noticed that none of the vehicles have a green exterior. But for this price. when the two sides are only a few dollars apart. you are making $200 profit over the true dealer’s cost. but in reality. this conversation takes place: Hobbs: Yes. He doesn’t really care about the color of the new vehicle. according to the Consumer Reports listing of the cost of the vehicle. A has gained something of true value and given up nothing he values in return.” Throwaway items are those things that hold little or no value to you. Salesman: Let me talk to my manager. not revealing that the item exchanged is a “throwaway. but … Salesman: But what? Hobbs: Well. so be sure you present them in a way that suggests importance. according to my figures. I know.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. it’s a great car and a fair deal. Mr. I’ll go get him. I can go to another dealer and get a green exterior—the color I like best. Example 1 The buyer. It is a useful tactic in any negotiations. you don’t want your opponent to know what these things are. However. Hobbs: Yes. At a point late in the negotiations.” Party B thinks that A has sacrificed one important objective to gain another. Here’s how it works: Party A exchanges the item for something of true value. we’ve got expenses and we need to make some profit. but he makes a mental note to use color as a “throwaway” item. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . 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.
I’ll take the red one for $100 less. Then we have a deal. At the very end of the negotiations. The manager was convinced enough to sacrifice a final $100 for the throwaway. Hobbs successfully chose color as a throwaway item. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. and seniority will be used to determine who gets to choose the first day... Example 2 The office supervisor told the three internal sales representatives (Jenny. The days in question are: Exchanging Initial Offers 69 .Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. 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 . Miguel. Employees will be paid time-and-a half for each of these days. Conclusion Mr.no it’s not. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. The three are sitting at a lunch table to discuss the schedule.. All three employees must agree to the schedule.
January 1 Carolyn: December 24. 24. January 1. if they let her choose the two days she will be off and the five days she will work. This would allow Jenny and Miguel to each work only two days. but that is a secondary consideration. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. 2 In the first round of negotiation. in exchange for giving up earlier choices due to seniority. December 31 Miguel: November 25. She proposes to work five days. 26. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. They have decided to start over. 31. 31 January 1. each made a first choice of days they will work. 30. A second and third round produced the following allocation: Jenny: December 23. They agree. She would actually prefer to work the extra days and get paid time-and-a half. December 26. 26 Miguel: November 25. January 2 None of the three are totally happy with the results. 2 Jenny: December 23. They all agreed to their schedules. 30. and each chooses their days to work: Carolyn: December 27. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children.November 25 (the day after Thanksgiving) December 23. 27. December 27. She got what she wanted by giving up something she did not value: the two other days. 70 50 Practical Negotiation Tactics . December 30.
can indicate that something you think is minor is really a major concern to your opponent. Autumn and Angela. When the girls decided it was time to talk about the estate.000. 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. we need to sell the house. 300 shares of stock in a pharmaceutical company.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated.000 with no mortgage on it. a house valued at $250. their mom left specific pieces of jewelry and art in the will to each of the girls. and a collection of antique furniture. Anne: As I see it. but I’d like to talk about the house and the furniture. A reluctance to include one particular financial item with other financial issues. The estate’s assets included a checking and savings account totaling $450. In addition. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. three ways. for example. it is often helpful to package the items in distinct groups and then deal with each package separately. Example 1 When their mother died at age 82. one might package all of the financial issues in one group and negotiate on that package as one issue. they met at the house. and the stock and distribute the proceeds. For example. realizing that the total cost of a deal might make or break the agreement. Anne and her sisters. The house and much of the furniture has been in the Exchanging Initial Offers 71 . along with the cash. 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. were faced with the task of selling the house and disposing of their mom’s personal belongings. the antiques. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways.
I’d really be interested in talking a trade for some of them. What would you think about agreeing today to distribute the cash and stock three ways. we’re really free to do with them what we want. and letting everything else wait for another discussion. I’d like to talk about the art works Mom left each of us. It’s a buyer’s market now. and if we wait a couple of years. Why don’t we leave some of the cash in the bank. With no one living here. 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. And we’ll fix the house up. it’s a magnet for vandals. Autumn: I think its awfully soon to be making these kinds of decisions. Anne: Okay. I’d like it all to stay in the family. Autumn: Sounds good to me. so I will be able to keep tabs on it.” She gave those things to us. So we agree: We’ll leave $30. Mother was born here and grew up here. and now that we have them. she’s free to do so. If we want. we’ll discuss again what happens to the house and the antiques. We’ll split the stock three ways. and use it to fix the house up? Then when we make a decision.000 in the bank and distribute the remainder three ways. Frankly. Soon. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. In fact. There was a reason why she gave us what she did. Angela: Now’s not a good time to sell either the stock or the house and antiques. we’d get a lot more for them. Angela: I live close by. Anne: But that means we have to continue to take care of the house and its contents. If Angela wants to hold on to her stock. we can sell ours. we will have a more valuable asset.family for years. don’t you think? Angela: Maybe. but the operative word is “give. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics .
etc. funeral. Angela: That’s fine. Several issues also needed to be addressed: the ability of employees to move up through the organization. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). including benefits for partners in non-traditional relationships.). May I suggest that we divide the items into three areas. the jewelry. The negotiations on the other items—the house. and establishing a work schedule to accommodate evening and weekend clients. vacation. but I’m making no commitment to trade. tuition benefits. what kind of paid leaves there will be (personal. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. deciding whether there would be annual wage increases as well as merit increases. and the assignment of the limited number of parking spaces. Anne: Same with me.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. The second: working conditions (work schedules and promotional opportunities). The third: Ben- Exchanging Initial Offers 73 . Employees: We’ve got a lot of items to cover. The following tasks needed to be a accomplished: establishing basic pay schedules. health benefits. sick. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. and the art works—will be more difficult. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. the antiques.
that makes sense. Employees: Okay. Wages should not include merit pay raises.efits (health insurance. Executive Director: Well. So I’d like to see us get through the wage issues quickly and then move on. and the parking spaces). but the parties were able to come to agreement because the wage issue had been resolved. 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. but I’d change your list. Also. paid leave times. I think it also makes sense to include tuition benefits in the Working Conditions category. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. because they’re really an incentive for better performance. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. Executive Director: Sounds like a good agenda. to be honest with you. we are an agency supported generally by public funding. Executive Director: I think it’s a good idea to group items together. as well. 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. Later negotiations were difficult. Let’s get started. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. I would include that under the Working Conditions category. 74 50 Practical Negotiation Tactics . the paid leave categories are pretty clearly defined. tuition benefits.
are divorcing. sets the stage for mutual respect and communication. Exchanging Initial Offers 75 . They were in the middle of buying a house. Example 1 Tim and Kathy. too. without suggesting any changes or modifications. You signed those papers. Tim worried that he would be stuck with all of the debt. Kathy borrowed more money to go to graduate school full-time. The discussion might become very heated. Their “property division” was mostly about dividing their debts. Tim began working right after graduation. and that you are entering into the negotiations with the intent to reach agreement. and she agreed. no matter how insignificant. They had also furnished their house on credit. It was her idea to buy the house and go into debt to furnish it. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. An initial agreement. The couple hoped to do the divorce without involving lawyers in order to save money. They have no children. rather than disposing of assets. Kathy’s first job paid more than Tim’s because she had a graduate degree. and both have good jobs. after a brief marriage. with her promotion sending her out of town.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. Kathy was asked by her employer to relocate to another city. because Tim felt that Kathy had taken advantage of him during the marriage. You can also make an effort to agree on something your opponent offers early in the negotiations. Now. It indicates to your opponent that you are a reasonable negotiator. Tim: You might be leaving town. They met and married in college. and might not even be able to keep the house. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument.
When we bought them two years ago. I can hardly argue with that. Kathy: Now. If both of us had been working the year I went to graduate school. I don’t intend to “stick” you with anything. a wholesale art dealer. Tim: Okay. Okay. and you got your sports car. Frankly. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. we would have paid down our school loans more. Example 2 ABC Company.. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan.Kathy: Hey. yes. an art gallery. Tim: Well. I got my convertible. The first thing I’d like to talk about is what we are going to do about the cars. What do you want to do about them? Conclusion Having agreed to two items very quickly. ABC usually uses UPS 76 50 Practical Negotiation Tactics . 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. and he could pay it in annual installments over a five-year period. and XYZ Co. hold on. as long as the cost was approximately the same. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. They also agreed that Tim wouldn’t have to pay her that amount for five years. as you remember. I think that makes sense. about the house and furnishings. I think it only fair that I take over repayment of all the school loans. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. The monthly payments are about the same. Kathy: I suppose we should look at the school loans next.
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. The artworks filled four boxes. or else the box was damaged in XYZ’s warehouse. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. and we will continue to discuss who is liable for the three water-damaged works. However. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. XYZ: ABC: Exchanging Initial Offers 77 . XYZ contacted ABC immediately. let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. it was obvious that the art in one of the boxes had suffered considerable water damage. but only if you let us ship it UPS. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper.to ship artwork. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. XYZ decided to cancel the promotional sale that was to start on Wednesday. and began preparing to return all of the artwork to ABC. They arrived right before the holiday weekend began. ABC refused to pay WeCanShipArt until it received payment from XYZ. and the boxes showed no external damage. ABC’s position was that the artwork was fine when it left their location. ABC: Before we begin. when the boxes were opened on Monday. There was no indication that the gallery’s electricity had gone out over the weekend. and arrived on time and apparently in good condition. Unfortunately. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. XYZ’s manager failed to open the boxes or remove the artworks. The other times this happened. We’ll expect you to pay for the 12 works that will be in your show.
78 50 Practical Negotiation Tactics . tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. they will split the cost of the three damaged pieces three ways. and if word gets out that you think it was. regardless of where the original three artworks were damaged. we’re ruined. that’s okay with me if it’s okay with XYZ. If we don’t make the deadline. I can’t see how I can refuse that. They also agreed that if the investigations are not conclusive. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem. Having reached an amiable solution to the immediate problem. Now.m. And we’ll eat the cost of shipping. generated a like offer from WeCanShipArt and a reasonable response from XYZ.XYZ: Agreed. at its financial risk. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. ABC: Well. The artwork was not damaged while in our control. XYZ: Okay. WeCanShipArt: Wait a minute. You can’t just ignore us.
we plan on selling our Ford tractor when we move.000 for it six years ago. period.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. consider using the “First and Best” tactic. Jeff spends many hours mowing the yard every week. but if you’re interested. I know you and Jeff said you’d like one because you have about five acres. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. We plan to put an ad in the paper next week. I don’t want to quibble. Ann: That sounds great! I don’t want this to affect our friendship. Exchanging Initial Offers 79 . 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. What do you want for it? Colleen: Well. Okay? No quibbling. I don’t have any idea. we paid $5. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. and even more hours in the fall picking up leaves. we’ll sell it to you. The “first and best” tactic enabled them to settle the matter easily. Why don’t you give me a price? Colleen: Oh. and it came with the bush hog and the leaf pick-up. Ann: Well. Can you check others in the paper and just give us your best price? We will either take it or advertise the tractor in the paper. Ann: Thanks! We really need one. no hard feelings either way. Example 1 Colleen: Ann. You must mean what you say and be prepared to walk away from an unacceptable offer.
Archie: Thanks. as we agreed. who admired the way Archie negotiated his starting salary. how about you making your first salary offer your best one. He also started the job with a positive working relationship with Vernon. but we have internal budget considerations and we must consider equity with other employees. on this slip of paper. I think we have agreed to all aspects of the job offer. (three days later) Vernon: Archie. I expect a fair increase. but I don’t want to start off in a new job by negotiating with my boss! So. Conclusion Archie accepted the job offer. I’ll get back to you in three days. We want you. and you know my current salary. I’ll either accept it or reject it. So. I came up with the best salary offer I can make. I want the job.Example 2 Archie: Well. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. 80 50 Practical Negotiation Tactics . I’ll discuss it with my wife and get back to you in 48 hours. except salary. and I’ll take 48 hours to consider it. I don’t like negotiating over salary either. Okay? Vernon: That sounds good. Here it is. no questions asked.
you will probably have to modify some of your positions if you are to reach agreement. so the prom is a pretty big deal to both of us.m. was dating a senior. (Once negotiations get underway.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. He knew his parents would not agree to let him stay out all night. but he figured “all night” was relative. Exchanging Initial Offers 81 . Example 1 Kevin.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. First. Posturing is indeed “acting.) During the posturing phase. we’re not going to be dating exclusively after this summer. First we’re going to dinner. It might be your only opportunity to explain your position without interruption. and in a favorable light. Third. curfew would be okay. Present your position and demands as if yours is the only logical position. since Sally is going away to college next year. Sally’s Senior Prom is coming up. 17 years old and a junior in high school. then the prom. Kevin: Mom and Dad. so he knew that he would have to sell them very quickly. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. I’m the only junior in the crowd. This is called posturing—presenting your position strongly and completely. Fourth. and then to breakfast at “Timothy’s.m. we’re all meeting at Donna’s so we can share a limousine.” As you know. His girl friend’s Senior Prom was coming up and Kevin obviously wanted to stay out beyond his usual curfew time of 1:00 a. and ignore or deny any weaknesses in it. Kevin had “negotiated” with his parents before. a 4:00 a. look for indications from your opponent as to what he or she believes is their best position. and we’ve made a lot of plans with our friends that I need to talk to you about. 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. you only have one Senior Prom in your life. Second.
You make some good points. I believe you can pay a little more and have the limousine bring you both home. We’ve heard that they allow kids to drink. That’s the deal then? Okay. We’re just not convinced that your entire group has been alcohol. of course. I know you trust me and that I’ve earned the trust. Also. We are. And. for sure. we told you that we would not be changing our rules to accommodate that older group. and we’re just not happy about that. You realize that this could be as late as 4:00 a. this prom is a one-night thing—a dance that is dressier than you’re used to. Donna’s parents will be there. you have been fairly good about making your curfew—most of the time. Finally. Sally’s parents trust us and have already said yes to her. From where we sit. And if we don’t spend the night. yes. However. So. Donna’s parents are not as strict as they could be when a bunch of you are there. they will be open for the Prom crowd only. and the crowd we hang with doesn’t either. 82 50 Practical Negotiation Tactics . Second. remember that when you started dating Sally and hanging out with an older crowd. we’ll have to get in our car and drive home very early in the morning. but because the owner’s daughter goes to Sally’s school. you and Sally need to call it a night (or really a morning). but it should not be oversold. I don’t drink or do drugs.m. but to use that as a reason to stay overnight doesn’t make sense. so there will be plenty of chaperoning. the limousine will take us back to Donna’s house to spend the night. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. We think that after the breakfast. I think I ought to be able to stay out all night. happy about your plans to use a limousine so you kids aren’t driving. I’ve never missed my curfew. we know. Things can happen on a night like that that adversely affect you for the rest of your life.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. which could be dangerous. That’s asking us to believe a lot. Fifth. Yes.or drug-free.
other companies have received incentives and Tencro certainly wants all it can get. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. but was disappointed to learn that they offer very few incentives. we’re of course interested in keeping you here. and it does not really need any help. If we can expand here. because his parents could not disagree with such wellthought-out ideas. Nevertheless. the state can do to help the company expand and rebuild. The assembly plant is out-of-date. Tencro has approached the state’s Office for Business Incentives to see what. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. Tencro is not going to leave the state. we’d be adding at least 500 new jobs. regardless of the incentives. but there are limited options available.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. It currently employs 800 people. and had this conversation: Tencro: We really want to keep our company here and expand it. one-floor operation would be very profitable. and a new. Tencro approached the state’s Economic Development Officer. EDO: Well. but we’re getting a lot of interest from other states willing to help us relocate. We need to find out what you’re willing to do to keep us here. if anything. but it could easily add another 500 if it had the space on its assembly line. The company approached other states to see what incentives they might offer Tencro to locate in their state. The spin-off business from our operations is huge. we are one of the largest employers in this county. Tencro: Let me just remind you of what our company means to this state. Also. With 800 employees. Example 2 Tencro Company decided to modernize and expand its business. our Exchanging Initial Offers 83 .m.
And we’ve been offered land practically free in the neighboring state. paying taxes. and we’ve had to divert funds from business incentive programs over to basic services. if the new location is at the local industrial park. We need a rebate on the local income taxes to help pay off the loan to build our new building. etc. There are more residents in the state demanding more public services: road improvements. We do want you to expand your plant. EDO: The state has very limited resources to pay for economic development incentives. We need help in the cost of attracting and training the new 500 employees. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. we will need the two-lane entrance expanded to four lanes. And. schools. additional police. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. and we are willing to offer some training dollars for the new workers. Certainly. while we value your company as a long-time corporate citizen. and traffic signals. We 84 50 Practical Negotiation Tactics . EDO: Well. That might involve the state building housing for them at a reduced cost and providing them with some retraining. We can’t possibly give it away to other companies coming in behind them. so we’d have to have it free here.. 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. etc. 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. or else it will not be cost-effective for us to stay here. Also. 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. We need certain incentives.employees pump money into the economy by buying houses and cars.
Tencro: Well. let us go back and take another look at our options. borrowed money for the new building. However. and hired 500 new employees. The new set-up was so profitable. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. Exchanging Initial Offers 85 . Tencro was able to pay off the borrowed money in half the time. EDO: Get back to us as soon as you can. Tencro bought land in the industrial park. but for the fact that each party did its homework and was aware of the true facts.agree that the road into the industrial park must be widened and a traffic light installed at our expense. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. Other than that. we’re just not in a position to offer more than that at this time. the training and the new road improvements were all the incentives offered to Tencro. Future negotiations continued.
000 for a house that sold for $185. at minimum cost.000.000 three years ago).000. 86 50 Practical Negotiation Tactics .) To prevent this from happening. is the most (or least) the other side will accept. before someone else does. offer $150. or 3) Make an unrealistic offer (i. Jay: No. of course. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system.000—what they paid for it. 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. which can be very useful). particularly if you don’t know the other party’s “settlement range. The other party will probably come back with an equally ridiculous offer. and that two similar ones on the same street sold for $330. and houses in this area sell fast. thus requiring greater concessions on both sides. 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. We don’t know how anxious they are to sell or if they know the market. The sellers must be willing to come down a few thousand … Sue: Well. Their realtor told them that it sold for $290. That’s a fair price.000. then $320. Sue: Let’s offer $325. Jay: No. They found one they both like that lists for $325.000 two years ago.” (You have won a settlement. such as last year’s price.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer. but you feel cursed because you gave away too much. because you have settled quickly. and you cannot withdraw it in good faith. Avoid giving away too much at the outset.000 and $337. 2) Start out with an old number. never give them their asking price. think things through before you make or accept the first offer.e.000 this year.” The perfect first offer.. Let’s low-ball them and offer $290.
Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. and the offer was based on fact: the prior negotiated price. (Bob and Frank meet privately to discuss the situation. That’s an insult! Jay: Well.000 for each of us—$6. the company president.000 total. (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. I can’t tell our realtor $290. Frank: Me too. as requested by the human resource director. but who knows what they are planning on offering.Sue: Don’t be crazy.) Bob: I’d do it for $3. they had offered $325. If. Give us your lowest price. Lyle Foxworthy. Both parties felt that they made a good deal. realizing they offered too much.000. was very impressed with their presentation.000. since they had already bought another house. The buyers were very motivated to sell. the sellers obviously would have accepted and Jay and Sue. Exchanging Initial Offers 87 . Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. as Sue had first suggested. Sue: Then you do it. They outlined how they would develop a new employee performance-appraisal system.500—half the difference! Sue: Great. then let them make a counteroffer.
They also ended up getting three times ($18. but we can’t pay more than $18. and you two come highly recommended.000) their minimum price of $6. What’s the cost? Bob: We want the job. and it would not apply.) Lyle: Okay.000. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. We’ll do the job. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work. We’ve waited long enough. Bob: That’s fair. I’m out of time.000.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. 88 50 Practical Negotiation Tactics . Lyle: Okay. That is all that’s left in this year’s training budget. but we know you must have an amount budgeted for this and we are willing to do it for that amount.
Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Instead. because if you do not at least appear to be flexible. what appears to be an outer limit of the settlement range when the process starts can. Also. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. is likely to pull away from the table. the other party. and do not flatly reject it because it is not your offer. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). carefully evaluate an opponent’s offer. which would most likely weaken their position (see Tactic #26: Keeping Secrets). This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). 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. labor negotiators. do not dismiss it because it is not all you want. in fact. which is often the case. Experienced negotiators seldom reveal their exact priorities and objectives. Skilled negotiators such as salespeople. seeing no common ground. It has often been said that the key to negotiations is to be flexible (see Tactic #25).Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. One or more parts might be acceptable or indicate movement from their previous positions. be enlarged (see Tactic #27: Expanding the Pie). but possibly of different values to your opponent. and attorneys use tried and true tactics in giving and receiving offers. When the other party makes an offer. Expect that the “total pie” will be different from what it was at the outset. 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. T Making Counteroffers (The “Give and Take”) 89 . In some negotiation situations.
He planned on being home for one last week before having to pack up and go back to college. while it may be your best option. Dad: Wait a minute. Proposing multiple ways to reach your goal can get you to the same place. it looks like we can’t really plan a vacation for all four of us. Let’s see what we can work out. I don’t want to give up on a family vacation that quickly. 90 50 Practical Negotiation Tactics . 15.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. gives your opponent little maneuvering room and might even prolong or damage the negotiations. what say you. In mid-June. Sydney. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. so you can go without me. their parents began discussing a family summer vacation. The effort it takes to come up with multiple options (all of which are acceptable to you) reveals additional ways in which you see yourself “winning” in the negotiations. The week he would be home would be the first week of school for Sydney. Jerry had already started his summer job. Jerry will be here. completed his first year of college and came home for the summer around the middle of May. Option 1: No family vacation. and quicker. Option 2: Mom and I go before Jerry leaves on August 1. We have four options. finished his freshman year of high school at the beginning of June. 19. and I try to get to the South Carolina beach for a week in July? Sydney: I’m not going to the beach with my parents! I’ll just stay home. Proposing only one solution to a problem. Here’s the discussion that followed: Mom: Well. except when you’re negotiating. 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. Example 1 Jerry. Dad. His brother Sydney.
they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. Sydney: Okay. and one secretary in his litigation unit. Joe has no say in who was hired by the corporate legal office to work in his unit. Classes don’t start until Friday. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Jerry: Okay with me. one paralegal. Mom? Mom: Let’s do it. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. actually. if it’s okay with Jerry. but it should work out all right. Conclusion The goal was to have a family vacation. and Carl). we meet up with him that week for vacation. when we come home. but he can discharge employees for poor performance. we could return home on Thursday and still get a week’s vacation. you have a half-day orientation on Wednesday. And I miss orientation and start school the next day? Dad: That’s an option. By proposing numerous options. Sydney: Don’t I start school that week? I don’t want to miss school. Jerry: My friends and I have plans through Saturday of that week. Andrea considers Making Counteroffers (The “Give and Take”) 91 . It’s not perfect. Mom: Well. Then Jerry joins us until Thursday. Bob. and Sydney go to South Carolina before his school starts. If we started the vacation on a Thursday. so I won’t be able to meet up with you until Sunday.Option 3: Mom. me.
but it doesn’t solve the problem—nor is it the only problem. Joe: That’s all well and good. It was just a comment. and I don’t see why we don’t have more independence. which forced Joe to take action. Andrea: Wait Joe. we have a very big problem. Before you start. You had no authority to agree to settle the Stites case without clearing it with me. 92 50 Practical Negotiation Tactics . Andrea: Well. Joe: Come on. however. let me say that I’m handling the missed deadline on the pleading. you know that wasn’t an okay to settle. It is to the corporation’s benefit to address that problem here and now. Her job performance was acceptable. she made a two glaring errors in judgment. If you don’t like the way I do my job. Joe: That is certainly an option. The attorney for the other side has agreed to give me the additional time to file it. rather than to put it off on someone else or for some time in the future. Joe: Andrea. or you can work out a “supervision” agreement with me so that I can better monitor your performance. isn’t it? But I don’t think just moving you really solves the problem. 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. so Joe took a “hands off” approach. and resents any attempt by Joe to supervise her work. why don’t you just move me to another unit? I’m certain Bill thinks I do good work and would be happy to have me in his group. Andrea: You didn’t list moving to another unit as an option. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal.herself to be a professional. you have a job-performance problem. I really see your options as follows: You can leave the corporation. To put it as bluntly as I can. Andrea: We’re hired for our expertise. We have a formal procedure that you just don’t like to follow. In the last month. Andrea.
Joe: That’s fine with me. or I would advise your next supervisor to put you on a very formal approval program. but it would still require some change in the way you work: either a demotion.) Making Counteroffers (The “Give and Take”) 93 . I hope we can work it out. rather than my staying here.Joe: That could be an option. It also changed her attitude about being both a professional and a team player in a corporate office. improve her work performance. in fact. Andrea’s move and subsequent “approval” regime did. and propose an acceptable alternative. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. Andrea: Well. then it would save face for me if it comes with a move to another unit. lets talk to Bill about the move. by Leigh Thompson. If that option is okay with you. I want to stay with the firm. If you are convinced that I have to undertake an “approval” program. the needs of the corporation have to come first. Believe it or not. But in fairness to our mutual employer. my goal is the same is yours: to create an environment where you can perform to your full potential. (Adapted from The Mind and The Heart of the Negotiator.
three strategies are used. if a buyer negotiates a $500 reduction of a contractor’s bill. Let’s see. and a home theatre. In essence. then those which can be easily traded. 2) exchange items (those that can be easily traded off—one item for another item of equal value. thus making it necessary to find a middle ground on each. then the contractor has lost $500 in revenue. 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.000. etc. These items often involve money). Example 1 Brooks and Maureen Wilson have just finished building a new home. Maureen: First. one person’s gain is another’s loss—zero-sum. Let’s agree to those things. Wow! We are off to a good start. They both agreed that this is the maximum they will spend on “extras” before moving in. For example. 94 50 Practical Negotiation Tactics . 3) distributive items (those items for which the two parties have exactly opposite interests. They each agreed to list the items they want and then to negotiate whether or not they will be purchased. the fencing. It is used only when each side has several demands. Exchange. With distributive items. because it can speed up negotiations and produce a more desirable outcome. This approach is an important tactic. let’s see if there are any items we both want. and finally. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. Brooks: Right. It goes like this: Organize the joint list of demands into three categories: 1) compatible items (those items that both parties can quickly agree on because they share the same desired outcome).).) Yes.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. we both want the sod. (She looks over the list. only those with polar-opposite interests that must be divided. that’s $9. They have a fixed amount of money—$14.500.
Making Counteroffers (The “Give and Take”) 95 .000! Brooks: Good. which takes another $3. that makes sense. We have $1. $750 for lighting and $750 in the bank. These are all permanent immediate needs. Can we split it evenly? Brooks: Okay.500 $500 $1.000 $1.500 $5. I’ll trade your sidewalk and trees for my whirlpool bath.500 $2. and we both get things we want.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. which I’d like to keep in the bank. I’d like to spend some of it on lighting upgrades.500 left.200 $200–$2.000 $500 $1.000 $5. Maureen: No.000 $3.000 $2.# 1 Sod Item Cost $1.
finally agreeing to split the difference on the remaining amount (distributive items). During that time. 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. All items to be negotiated and their desired outcome for each item were put in writing for review. Pension Increase 3. both sides exchanged lists of initial demands at their first meeting. Profit-Sharing 5. even in difficult years. Drug-Testing Program 96 50 Practical Negotiation Tactics . This year. management and union negotiators found that a “winwin” approach to negotiations worked well. Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. 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). Length of Contract 2. Wage Increase 4. The combined lists total thirteen different items: Desired Outcome No.Conclusion By taking the time to list all the items each person wanted and their cost estimates.
Next. Clothing Allowance Based on senior. and (#9) to continue the often-discussed no strike/no lockout provision. Finally. Job Security 13. one Making Counteroffers (The “Give and Take”) 97 . Health Insurance Employees pay 20% Continue cur. 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. signed. Shift Differential 11. They proceeded to draft the language to settle these issues. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). No Strike/No Lockout 10. At this point. eleven of the thirteen original issues to be negotiated had been agreed to. (#5) a new drug testing program. Paid Funeral Leave 9.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10).6. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7).Distributive rent program co-pay Exchange Exchange 7. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11). Because they held opposite positions on these issues.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Next. Overtime Assignment 8. Subcontracting 12. and removed from the table. they began to trade off the exchange issues of similar value and nature. First.
Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. but it can be very effective when a negotiation situation involves several issues. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. the most difficult issues (often involving price or some other economic measure) can be negotiated because you know that most items have been settled successfully and only a few remain.side’s gain is the other’s loss. exchange. 98 50 Practical Negotiation Tactics . but a middle ground was eventually found on each and negotiations ended. Third. or distributive so that the negotiations can begin in an organized manner. The tactic offers several advantages: First. 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. when you exchange items so that each party achieves their desired outcome on one of the two. you can use the process to settle many of the other issues on the table. negotiations begin on a positive “win-win” note. Conclusion This tactic is simple. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. They then identify each as compatible. if both parties start from reasonable positions. Second.
last item: I’d like it quiet in the room at night. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. This isn’t high school. Since they didn’t know each other well. I’m not interested in a curfew. 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. Rob: Wait a minute. Jasper: Finish or not. even if you aren’t going to accept their offer. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. do not offer a counterproposal right away. and looks like you are belittling them. and from a strategic standpoint. they decided to establish “room rules” so that they would both be comfortable with the room assignment. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. stereo.Tactic 24: Wait to Counter As the negotiations begin. each side is expected to put an offer on the table. They agreed on which part of the room each would have. Here is how the last issue was handled: Okay. you know. so he wants a quiet room late at night. It is especially important that you do two things: take your time before rejecting any offer from the other side. Let me finish. and on what would be considered acceptable “sharing” of each other’s junk food supplies. and refrigerator. and studies late into the night. Waiting a respectful amount of time to counter. Mutual respect must be part of the negotiation process. the location of the TV. so I can study. Rob stays busy all day and evening with other activities. Rob: Making Counteroffers (The “Give and Take”) 99 . and can help you reach your goal. So when’s a good time? Jasper: (without hesitation) No way. The final issue had to do with “lights out” and quiet times for studying. will make your opponent feel good about the process.
c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. Under ABC ‘s contract with the union.m. 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. Jasper: (without taking a breath) At best. curfew on TV and other noise every night. b) written complaint to a floor manager if the matter is not resolved in 5 days. Under the restructuring. but changed his mind when he saw Jasper’s attitude. I want a 10:30 p. The union contract required that management renegotiate this change in the grievance procedure with the union. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down.) Listen. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . and d) a hearing with company owner if the matter is not resolved in 20 days. and that’s not negotiable. Rob: (there is no hesitation in this voice) No. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. midnight during the week is the only thing I’ll consider. 10:30 p. The appeals procedure would have to be altered to reflect the restructuring. Jasper: Midnight. the positions of non-union crew leader and floor manager would both be eliminated. and that’s it. is all I’ll consider.m. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. and the union foreman would report directly to the plant manager. No agreement was reached.
Union: As you know. because those management layers are gone. We just cut out two steps. (Note: An attitude change sets in. 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. In fact. We’ve simply eliminated the first two steps. this redraft is a very simple change to the contract. but to dictate. he/she can take the grievance to the plant owner for a hearing. Company: (rather abruptly) Let’s not drag this out. rather than go on to appeal it to the company owner. no one can complain about that. and I’m certain your members will be okay with it. We’ve got a couple of alternative models for you to consider. After initial pleasantries were exchanged. the employee and the foreman would meet with the plant manager and attempt to resolve it. Company: (no hesitating) Trust me. and everything else stays the same. Company: Here’s the new draft of the grievance procedure. The redraft is simple and straightforward. If the union foreman felt that the grievance had merit. our grievances often signal to management that there are real problems on the shop floor. Union: Hold on. and began the negotiation session concerning the grievance procedure. ABC Company’s negotiator explained the management changes soon to be implemented. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. Union: You obviously didn’t come here to negotiate. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. rather than as a judge on the merits of the grievance. Certainly.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 .any objection to the change. If in 20 days he/she has not been satisfied. We’d like you to consider the plant manager’s role as a problem-solver. The union was prepared to accept the plant manager’s position as final. An aggrieved employee can make a request for a meeting with the plant manager.
the company entertained the ideas the union had tried to propose before.two-step grievance procedure instead of a four-step procedure. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. Union: We’re very serious. This time. You can’t be serious. and we’ll strike if we have to. the two parties did meet again. We’ll see you on the picket line. 102 50 Practical Negotiation Tactics . and actually accepted a three-step procedure. rather than in the 35 days the current system provides. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. After a cooling off period.
and do not dismiss something said by your opponent just because it came from the opponent. Sue’s sister Nancy called her to talk her into coming anyway. Bill’s family won. If you are flexible. Next year. Arriving late at Bill’s family gathering caused him to miss the “traditional” pre-dinner pro-football game on TV (which he had grown up believing was the real reason for thanks at Thanksgiving). Bill’s family (parents. Making Counteroffers (The “Give and Take”) 103 . four brothers.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. their spouses. They’ve done the research. it’s just too much to do both. Nancy: Sue. and now have a new baby girl. two brothers. Even before the baby’s arrival.m. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. Example 1 Sue and Bill have been married four years. The couple used to have Thanksgiving dinner at both families’ homes. established goals. Sue: Yes.m. But after the negotiation gets started. Bill. Sue’s family (parents. you can adjust your demands or goals to include such new ideas. and ten nieces and nephews) always ate around 5:00 p. and identified the range of options they feel comfortable with negotiating. Mom says you. and at least five aunts and uncles) ate around 7:00 p. we’ll get to our side. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. two sisters. one sister. They flipped a coin to see who “got” them and the new baby this year. 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). Be open minded. and we’re really not able to enjoy either one.
Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Bill won the coin toss for this year. I bet everyone could make it on Friday. 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. it’s okay with me if you can sell it to everyone else. Sue: I don’t know. By being flexible. Nancy: I’ll let you know. and it became the family’s new tradition. Thanksgiving is Thursday. we’ll come to Mom’s. but then I realized that the rest of you already go to your in-laws earlier in the day. either. Sue: Next year. but she won’t tell you.Nancy: It just won’t be right without you guys. 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. There’s nothing “special” about Friday. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. I know that I would rather not do two Thanksgiving dinners on Thursday. I thought of asking Mom if she could move dinner up to noon or so. Nancy: If we keep the time at 5:00 p.. So that doesn’t work. Celebrating the next day seems odd. I mean. Mom’s very upset. some people have to work on the Friday after Thanksgiving. the holiday will be over. When that goal looked out of reach. she suggested a unique alternative. 104 50 Practical Negotiation Tactics . Nancy: We’d make it special by all of us being together.m.
City: Can’t you borrow the money from a bank to build the facility. a non-profit organization for orphaned children. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. Kids’ Home: That’s why we brought the foundation’s officials with us. We need the city’s help by allowing us to get the city land donated to us (for free).5 million is available for distribution to numerous charities. We only have maybe $2 million a year to put toward this charity. Estimates for building a new orphan home ranged from $12–$15 million. The foundation has a substantial endowment fund. the foundation’s regular annual grants come to roughly half of their available funds. Unfortunately (for Kids’ Home). They are meeting with the city to ask that the land be donated by the city for the project. Each year. we hope to break ground early next year for the new orphan home. Kids’ Home: As you know.Example 2 Kids’ Home.000 a year for operations. Foundation officals: Oh. but we need some assurance that you will be able to build and operate the orphan home at that location. City officals: We can probably give you the land for free. Kids’ Home hoped to get $500. but the principal of the fund can’t be touched. but we can’t fund all of the $12 or $15 million. 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. we’re committed in theory. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. depending on the cost of the land. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 .
I’ll contact the state tomorrow. it could end up costing double that amount. We’ve never committed our funds to pay back a bank loan. and really taxes our ability to raise funds. We’re a nonprofit group. We’re not familiar with that program. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. If we borrowed $15 million at 10% interest. We wouldn’t want to make such a commitment to a bank. We probably would not be able to participate.Kids’ Home: Borrowing the money gets very expensive. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. 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. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. but we’re willing to look at it. 106 50 Practical Negotiation Tactics . And “donations” aren’t a very safe collateral for any bank that wants to loan us money.
it is not acceptable to lie. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. These parties could get rather loud. and often lasted until 2:00 or 3:00 a. Mr. However. Making Counteroffers (The “Give and Take”) 107 . you might not want to reveal all of your priorities at first. The Jones family suspected that the Smiths called the police. Before the Jones family moved into the neighborhood. and often took up all the space along the street in front of the two houses. The Smiths called the police to complain about a late-night party. Smith: We don’t know what you’re talking about. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. yet not reveal all of your goals and objectives. They asked to meet with the Smiths to talk about these disagreements.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. the neighbors began to have problems. Jones: We’ve obviously gotten off on the wrong foot. At the same time. Successful negotiations depend on trust. each side has to know generally what each other wants to accomplish. But the Jones clan had four cars altogether. 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’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. 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. In order for a negotiation to be successful.m. It is perfectly acceptable to say that you are not ready to reveal certain things. and we would very much like to talk about how we can resolve these issues. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. the Smiths could count on parking their car directly in front of their house. Mr.
If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Jones: I wish you had mentioned that the last time we talked. and they won’t be having friends over more than one night a weekend from now on. (A week later. It is really very disturbing. Is that everything now? Mr. 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. Jones: We’ve already talked to the girls about the parties. that wasn’t us. At our age. Almost every day. Smith: Well. Smith: Yes. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Smith: You know that your boys are causing our dog. And the music is to be off at midnight. we thought you might have called the police about our kids’ party and our cars. Jones: Okay. Mr. I’ll talk to the boys and we’ll make sure they play baseball in the park. and not in the back yard. the late-night parties are a problem. Smith: No. fine. and was met with the following: Mr. we have a problem walking long distances in bad weather. I guess. the next time the boys were out playing and the ball came into the Smiths’ yard. So. Mr. we’re good now? Mr. Mr. Muffin. And we’ll make sure none of our cars are parked in front of your house. they’re hitting baseballs into our yard. In good weather. we would like to work out some solution. Mr. Jones came to see what the problem was. yes. we’d like to be able to park our car in front of our house. since you’ve asked. Smith: Well. In spite of the Smiths’ assurances.) 108 50 Practical Negotiation Tactics .Mr. Also. but we do know that someone has complained. a lot of problems. Jones: Well. if they are outside. they kept it. Mr.
the tree was clearly over the fence. the British firm will walk away from the deal. But we didn’t call the inspector. Jones: (at the Smiths’ door. irate) I can’t believe you people called an inspector on us. The union knows that the company is up for sale. Making Counteroffers (The “Give and Take”) 109 . or European companies do.Mr. The union laborers walked off the job on Friday. Mr. Jones: Sure.S. We would have fixed the tree if you had asked.S. have labor unions.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. 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. Smith: Well. you’ve said that before. although none of the facilities outside the U. because they didn’t like a grievance decision. Neno’s president and the Union representative met to discuss the walkout. or the deal is off. Why didn’t you tell us? We can’t read what’s on your mind! Mr. Japanese companies often do not “recognize” labor unions the same way U. Its local headquarters has a union to handle its international shipping. Example 2 Neno Enterprises is a shipping company with extensive global operations. but Neno cannot tell the union this. Neno has been negotiating the sale of its business to a British company. and the deal is close to being final. The British insist that a very strict confidentiality provision be part of the negotiating process. You could have seen that yourself. Union officials are afraid that a Japanese company might purchase it. Unless Neno can get the Union members back to work on Monday. You obviously don’t want to be “good neighbors.
I can’t really be more explicit than that at this time. then there’s probably no harm done. If that’s going to have a bad effect on your being able to sell the business. Therefore. I promise you. It’s not the time to have one. 110 50 Practical Negotiation Tactics . Neno: Look. I need your guys to come back to work on Monday. But if your guys are out past Sunday. I’ll forget all about the strike. is still a labor shutdown. You don’t want to mess up our negotiations. do you? Union: No. so the union won’t be hurt by the buyout. I’m certain that if we can sit down and talk next week. Anyone who buys the company will have to honor the contract we have. we don’t. I think it already has. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. You really don’t want to do that. We’ve not had a labor shutdown in 20 years. no harm-no foul. any interruption in our shipping could affect how these buyers look at our business. But I have to have everyone back on Monday. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. If they do come back. and if the guys are back on Monday. Union: What aren’t you telling me? A labor shutdown. this is a legal strike under the contract. Neno: All I’m saying is that there is a difference. If everyone is back on Monday. Union: We think that the grievance decision affects our wages. We’ll meet with all of the parties on the grievance first thing Monday. Neno: Look.Neno: You know this is a wildcat strike and that it is in violation of our contract. it will impact our marketability. Our guys are prepared to stay out a lot longer than Monday. And one company that is interested has a really good track record on expanding the businesses they buy. Have the guys back on Monday. I know it’s not news to you that this business is up for sale. we will resolve it to your satisfaction by the end of the day. We can’t put up with the kind of decision we got on our grievance. maybe by next Friday or the week after that we’ll have our guys back to work. whether it’s for one weekend or a week.
the union was willing to trust Neno—even though he couldn’t tell them everything. He told him that it would mean that the union would not only keep its jobs here. was the right decision to make. the sale was finalized. If I could. Can you assure me of that? Neno: Yes. Conclusion On Monday. rather than make up reasons. Neno called the union negotiator in and briefed him on the sale. I would be more specific.Union: It’s that important to you? Neno: Yes. and it’s that important to you as well. I can. as well. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. Union: Okay. But I need to tell my guys that this is important to them as well. Making Counteroffers (The “Give and Take”) 111 . but the British firm will allow them to organize at their foreign locations. we’ll be back to work on Monday. Because the parties had dealt honestly with each other in the past. Union: Okay. while the grievance was being resolved. But I can’t. I’m going to go along with you because you’ve always dealt straight with me.
Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.
Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.
50 Practical Negotiation Tactics
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.
Making Counteroffers (The “Give and Take”)
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.
50 Practical Negotiation Tactics
Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-
Making Counteroffers (The “Give and Take”)
000 for advertising. Take it or leave it. (long pause) Felipe: Let me give you three options: A. I can accept B. Felipe: Well. Roberto: But it will never generate enough interest if no one knows about it. Felipe: (Roberto’s supervisor) Sorry. B. Example 2 Roberto: I can’t properly advertise this new program with a $5. Felipe: Sorry.000). Conclusion At first.000. Roberto: But I need to start the direct mail and newspaper ads within two weeks. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . I’ll do it now. or we lose a whole year. but no TV or anything until it’s done! (pause) Okay. or C.Amber: row before your basketball game.000 budget! I need at least $20. keeping her Saturday free. but the company president does not share your optimism on this program. Roberto: Well. I’ll approve $15.000 in the budget. I’ll approve $15. Use the $5. I’ll find a way to do without one part-time person. but I will cut your staff by one part-time person (or $15.000 for advertising. Amber resisted the chore she hated. that is enough time. I have three hours. I’m not going back to him again to discuss this program. Three. But when her mother laid out the schedule and gave her alternatives. I can’t help. Clean it after your game. she chose the one she most preferred. and clean it. but I will cut your travel budget out completely.
” He offered Roberto three alternatives of equal cost. which was his goal. Roberto believed. Making Counteroffers (The “Give and Take”) 117 . One alternative. would enable him to adequately promote the program.Conclusion Felipe was willing to think “outside the box. thus achieving his goal of not having to ask for a larger budget.
You know my commitment to this company. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. Unfortunately. This should have resulted in an automatic promotion and a sizable pay increase. After a few minutes of silence. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. the promotion had not yet been approved. But she also knew he would have to be willing to go to bat for her with his superiors if she was to get her advancement. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. Jones. inviting a response. you are a valued employee. Susan: Mr. he can make an open-ended statement. It was 16% less than she had been led to believe she would be getting. I think you would agree with me that I have performed well above expectations this past year. I very much appreciated the fair job performance review you gave me. She was determined to hold her ground for at least a 13% pay increase and a promotion. 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. The negotiator for the other side says nothing. If his opponent cannot agree to the demand but does not want to end the negotiations. I have to tell you that while I appreciate what you have done for me. nearing her third year with the company. Jones: I certainly do. but one side comes back with a non-negotiable demand. and 118 50 Practical Negotiation Tactics . received a glowing report from her boss on her job performance. Here’s how the negotiations went.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. Example 1 Susan. Susan: I hope so. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement.
I must ask you to try to get both. Susan’s silence prompted Mr. I really want you to stay with the company. if management can see their way to giving you the pay increase now. I suppose I could get the promotion approved with the proper presentation. Making Counteroffers (The “Give and Take”) 119 .or three-year period. Once he acknowledged that both items might be awarded sometime in the future. and sell it to management that way. Conclusion Mr. it could help. and I’m sure management will agree. (says nothing) If I can’t get that pay increase approved right now. and I think that I really haven’t been dealt with fairly. Okay? (says nothing) Let me check it out and I’ll get back to you. Promotions of this type are all but automatic around here. because I feel my future with the company might be at stake here. but a pay increase of that size might be more difficult. (says nothing) Or. Jones to continue to offer solutions. I could probably find a way to phase it in over a two. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. the company’s refusal to grant them now was a harder position to support. maybe we can talk about the promotion later in the year. Well. of course I will be glad to do that. 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. If there is some flexibility in your request.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration.
My bosses might not have been inclined to expand the agreement anyway. Mayor) said that she was considering running for office. but now they’ve got to ask what Madame Mayor’s motivations are. and until she does. She has not decided what she’s running for. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . I don’t think it’s a problem. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. Also. The end of the agreement coincided with the election cycle for the two towns. Town Council Representative: I think you’re wrong. I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. Town Council Chair’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. Town Council Chair). He decided to push for a simple renewal of the original terms. and were trying to settle on new and expanded areas when one of the elected officials (Ms. The parties agreed to continue the previous terms of the agreement. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. has colored these negotiations. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. The term of the original agreement was nearing its end. This is how the negotiations went: Town Council Representative: Well. Mayor’s representative: No. by saying that she might run for Chair. The mayor. Mr. her plans really don’t have any bearing on these negotiations.
Mayor’s representative: Well. 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: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. I’ll go back and tell Madame Mayor your position. the Town Council’s representative left the mayor’s representative with no room to maneuver. Making Counteroffers (The “Give and Take”) 121 . the Town Council representative’s position prevailed. Conclusion By remaining silent. I hate not to attempt to add some additional areas to the agreement. 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. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. He either had to end the session or figure out what to say to reengage the other side.represents have to worry that her desire to switch governments might taint the negotiations. In the end. and the agreement was renewed with no new provisions.
As was sometimes the case in these parts. I have a problem. The property came with three acres of forest alongside a meandering brook. or we will be at an impasse. the brook was the property line separating her property from a neighboring farm. she noticed that the brook came within 100 yards of it. You will have to remove the rock barrier. Joe. Neighbor: Well. It calls for compromise. She traced the brook back along its course to see why and where it had changed its path. which an upstream neighbor had built. the brook and rock barrier are on my property. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. 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. you should always enter the talks with a good idea of what you are willing to agree to. Madeline built a gazebo about 500 yards from the brook. after the gazebo had been there for about five months. Having an iron-clad demand probably won’t give you enough room to reach an agreement. The brook 122 50 Practical Negotiation Tactics .Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. 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. when one of you might say. Obviously. and began to renovate it as a home and a pottery shop.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. “I have to have this. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. The reason I built it was so that I could protect my patio. Madeline: Hi. Madeline. She discovered that a rock barrier. had redirected the brook further into her property. Example 1 Madeline bought an old farmhouse outside of a small town. in a small clearing. One day.
I understand that. but I don’t know what I can do about it. Madeline: Well. Making Counteroffers (The “Give and Take”) 123 . what I need is to protect my property line and my gazebo. restore her property line. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. This will put these houses right next to me. which enabled her to achieve her goals. What if you removed the barrier for a short time. My neighbor on the adjacent farm wants to sell part of his property for a housing development. When she found out that this was not going to solve her neighbor’s problem. she widened her range of options. Neighbor: I can do both of these things. I won’t remove the rock barrier. Also. Neighbor: I’m sorry. 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. 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. Madeline: Yes. It might not be necessary to make such a dramatic change. I’ve lost 400 yards of property on my three acres. Then.extended right up to my back door when the rain was heavy. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. She left room for a compromise. if the brook is redirected. you have not only threatened my gazebo. Madeline was able to protect her gazebo. I couldn’t have that. Madeline: But by diverting the brook. I can’t have the brook in my house. and allow the neighbor to protect his home. and return everything as it was. at least I’ve maintained my property line. but you’ve changed the boundary line of my property. By expanding the range of options available to resolve the dispute.
But only a few of our people are close to retirement age.000 figure. that would be the minimum increase. Company: This could not come at a worst time for us. The projections for the next five years were that these costs would increase to about $1. And we cannot afford that $1. The pilots want dependent coverage paid for by the company.000.000. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200. then the pension benefits overall will increase by $10.000. 124 50 Practical Negotiation Tactics . you are taking a risk on the costs increasing. The company wants to trade paying for dependent coverage for better pension benefits. Over the last five years.000. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000. Pilots: Look. as it has always been. what they really need is for you to cover the costs of dependent coverage. This would be a better benefit in the long run. the airline paid a total of $200. With long-term planning and investments. As best as we can tell.000. Over the next five years. with all wage and operations issues resolved fairly early. However.000 to cover the premiums for dependent coverage. Everyone was afraid that the dispute would cause an impasse and a possible strike.000 a year over the next five years? Company: Yes. and are willing to keep pension benefits the same. This is just a cash-flow problem that your members have to understand. The airline industry is in a slump.000 (which we reasonably should have expected to pay in premiums) in the pension account now. If we invest the $200. dependent coverage could cost us $1.000. we know that health insurance premiums might skyrocket.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. the company can make your pensions much better. and we know that with this new contract term of five years. and the premiums for health care just keep going up.
The dependent coverage is more important to us now than the pension benefits. so the decision to be flexible was a good one. by agreeing to let the company cap its exposure for dependent health coverage. however. Company: Then it’s okay with us. The $200.000 the first year on the premiums. and the pilots knew what to ask for when the contract expired.000 actually carried them through four years. if they were that high. The health insurance market stabilized. It initially believed that the only option was to put that money into pension benefits. If we can get two or even three years out of the $200. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. Company: If the company spends the $200. that would be worth it. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes.000 available. the company will not be expected to give us this benefit. The pilots expanded the range of options. or invest in the pension plan? Company: Yes.000? Once the cap is met.000 to either pay one year of the premiums. Conclusion The company was committed to limiting its exposure to $200. with a cap of $200.Pilots: But you do have the $200. then those funds will not be available to invest in the pension plan. we are.000. can we agree to a year-to-year agreement on dependent coverage. Making Counteroffers (The “Give and Take”) 125 .
be sure to add up the total cost. I recall the day you drove it out of here.000 for a Volvo? I bought the one I’m driving for $19. 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.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.500! Saleswoman: Yes.” and “low monthly rates” are examples of the salami tactic. Example 1 Car buyer: What.… (20 minutes later) Saleswoman: So. and compare it to your strategic objective. what monthly payment did you have in mind? Buyer: More like $300 per month.000 car. Saleswoman: I’ll be right back. I guess it would be around $600 per month. it’s a deal? 126 50 Practical Negotiation Tactics . do you want to look at something else? Buyer: No. Buyer: Way too much! Saleswoman: Well. I just can’t imagine the monthly payment on a $45. but that was several years ago. Saleswoman: With your 740 in trade. $45.” “affordable weekly payments. Buyer: Yes. If you are on the receiving end of such a tactic. Phrases such as “for only pennies a day. if I can give you this car with a $300 monthly payment. I love this car.
you can get the Disney channel for only $5. I can’t discuss another client’s account.00 per month. You can do that. Making Counteroffers (The “Give and Take”) 127 .00 per month for your service. but let me see the numbers. it will be a five-year lease.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. but what else must I buy? Only the basic service for $8. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. do you want HBO? How much? $5. do you want Disney? Yes.00 per month. I can’t afford that much.000 down. But my neighbor pays $39. I can afford $6. Sure. (looks at the numbers) That looks good. as promised.99 per month.” She decided to cut the $45.” she had him—she worked around the $300 slices. with your car and $6. Let’s see. can’t you? Buyer: Yes. down payment. and payout slices to reach the total price she wanted. Instead of a three-year lease.000 price into “slices” the buyer thought reasonable. and added the trade-in. Great! So. Once the buyer volunteered that $300 was an affordable “slice.Buyer: I don’t see how you can do that. Saleswoman: Simple.
we had that before.00! Why? Because he judged the per-slice price to be reasonable. 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. 128 50 Practical Negotiation Tactics . Any other kids’ channels? Yes. and SI 1.00 per month. That’s another $5. I really want the sports channels.00. 3.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Disney is for the kids! The sports channels are for me. Yeah. and my wife wants the old movies. What about the music package? Yes.99 per month. Thanks. That’s $5.00 a month.00 per month was far too much. Okay. Great. they asked about the Cartoon Network. But that’s all! Then we’ll hook you up on Monday. The total is $38. 2? How much? $8. Conclusion The owner thought his neighbor’s service at $39. instead of one total amount. 2.
Humor might not look like pressure. angry negotiations. it is effective. the traditional car salesperson might tell the buyer. For example. but others will walk out the door. so are you ready to make a deal? This might convince a few buyers. 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). When both sides believe that each has equally strong positions. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. and it can destroy your credibility. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer).m. but it can be used effectively when one party clearly has an edge. Applying Pressure 129 . “I can only guarantee this price until 6:00 p. turned off by the tactic. pressure tactics should probably be avoided. In some cases. which can be successful if the opposing team has two or more members who hold different views of an issue.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. and the use of humor. however. It should be used with caution: It can end negotiations immediately. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. today. Tactic #33 (The Bluff) is a classic pressure tactic. 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.
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 they will weaken your credibility. Although I do think there ought to be some consideration for the two years you had use of the boat. and we need to talk to you about how we can buy you guys out. together and separately. We’d hate to give it up. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. I don’t know. Abby really loves that boat. he and Chloe wanted to buy out Don’s and Abby’s interest. but Don. Chloe and I would like to take the sailboat with us.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. And we don’t want to be unfair. in fact. The two couples used the sailboat a lot the first couple of years. I think Chloe and I would be willing to pay more than just the money you guys put into it. Such exaggerations are easily revealed or uncovered. 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 and Chloe didn’t know that Don and Abby were. big news! I’ve been promoted. and we’ll be moving south in the next month or so. It 130 50 Practical Negotiation Tactics . boat prices have really gone up. When Lacey found out that his employer was transferring him to another city farther down the coast. Your opponent will consider you untrustworthy and might even be insulted by your attitude. Lacey: Don. Lacey: I know. Lacey. Don and Abby now use it less and less. Don: Wow. Don: Absolutely. but it is not a good idea to exaggerate what you are offering or what you are giving up. getting a divorce and each moving away (and would have no more use for the sailboat).
the boat has depreciated. Abby told Chloe about the divorce and about how she never wants to see the boat again. and we’re moving farther south. though it’s not so happy. I’ve been thinking. I thought you understood how important this boat is to Abby. Let me talk to her. and I’ll get back to you. I’m sorry. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. I was afraid something was going on when you all-butstopped joining us on the boat. We’ll be leaving here for the Midwest. I’ll be glad never to see it again. Don: Lacey. I have big news too. but separately. Abby: That boat. It’s about time now for some major investment. which you would have to share if you want to retain half-ownership. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. Applying Pressure 131 . Don. Lacey: Cut it out. Abby is having this conversation with Chloe) Chloe: Abby. (After Lacey and Chloe had a chance to talk. Lacey and Don’s negotiations changed considerably. I’m surprised by your attitude.) Lacey: Don. he likely would have found himself in a stronger negotiating position. After all.is just about the most important thing we own. and neither of us put much in for upkeep. (Around the same time. Abby: Well. Don and I are getting a divorce. big news!! Don got his promotion. Chloe: Oh. 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. It just reminds me of how happy Don and I used to be.
I can’t see how today’s numbers really impact the long-term profitability of this company. our production line changes at least three times a year. and that the economy is strong. I’ll be looking to you to make some major wage concessions on this upcoming contract. Here’s how these negotiations went: Company president: Well. I’m telling you the stock price is having a huge impact on us already. but this has been such a crazy situation. the company president decided to use the stock price as a negotiating tool during the current union contract talks. I’ll have to show them 132 50 Practical Negotiation Tactics . I think you’ll have to agree with me that wage increases in this next contract will not be available. in this global market. The current stock price is the lowest it has ever been. I read in the papers every day that the market is still strong. 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. 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. And as you know. the situation in the stock market is not good. in fact. 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’ll be going back to them as soon as next week. Company president: Well. we will need to make drastic cuts in our operating costs just to survive. And while these fluctuations have little to do with the health of the company itself.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years.
this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. Company president: All right.) Union negotiator: I’m sorry. The union became hardened in its position that the employees needed wage increases in the new contract. We think this company is very healthy and can withstand the temporary downturn. but your proposal to cut wages is just not going to fly.that we’ve cut expenses to counter the losses in the stock market. When the market took a swing up during the negotiations. If you put it that way. we’d like to reopen talks on next year’s pay increase. let’s talk about it. the company’s position was weakened even more. Let’s get back together next week. they would do a thorough analysis and look at the health of the company over the long haul. Union negotiator: Well. If the stock goes up next week. okay. but I checked it out and it’s not totally true. and the union ended up with a substantial increase in their contract. Applying Pressure 133 . the union checked into the Letter of Credit transaction with some experts in banking. When negotiations resumed. They told union officials that it would be very rare for a bank to make its decision solely on stock price. (In the interim. here’s what happened. no concessions! In fact. and I’ll have our people look at it. Give me your proposal for wage concessions. Conclusion Because the company’s president over-emphasized the impact of the market on the company. he lost the trust of the union. Union negotiator: I know that’s what you told me. So.
Poker players know all-too-well-that bluffing can be very costly. but I really am. Here’s how the discussion went: Christy: Tom. Tom: Oh. Sara said she saw you at the movies with Charlene yesterday. I knew you had a class. are you? Christy: I don’t want to be. The couple had not discussed marriage. either. and they really have no intentions of doing so. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. I guess I’m just surprised. Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. and she didn’t think Tom had. This can come back to haunt you. they are bluffing. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement.Tactic 33: Bluff! Bluff with caution. but Christy thought the relationship was heading in that direction. 134 50 Practical Negotiation Tactics . Both of them were still in graduate school and worked full-time. Charlene. We don’t have that much free time together. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. If you subsequently agree to begin talks again. it might backfire. You’re not upset about that. Example 1 Christy and Tom had been dating for about a year. so their “free” time was very limited. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. you will have lost credibility with your opponent. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. I called Charlene and she was available. I really hate it that you chose to see the movie with Charlene. yeah. and I really wanted to see the new Lenny Bruce movie. She knew that if she made such a demand and threatened to leave him unless he made a commitment.
she paid her own way. Tom: I have friends of long standing who are women. I won’t go out with any woman friend. I need to have your commitment that you won’t do that. Since he wasn’t sure about that. Conclusion Tom didn’t want to lose Christy. he had to make a commitment or risk losing her. I’m willing to risk losing you. Actually. but very little progress had been made. if you can’t make that kind of commitment. It really wasn’t a “date”—we just saw the same movie together. If that’s not possible. I certainly don’t want to lose you. If Tom had “called” Christy’s bluff. The union negotiators. 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. I just thought of her because I knew you weren’t available. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. It’s made me realize that I want us to have an exclusive relationship. She convinced Tom that her feelings were strong. and at first he thought she might bluffing. Christy: I just can’t see it that way. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. I’m not “dating” anyone else. then I’m afraid I want us to stop seeing each other. Tom: Okay. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. It is. so he didn’t call her bluff. Applying Pressure 135 . He believed she was sincere.Tom: She’s a friend who happens to be a girl. Tom: You’re serious? It’s that important to you? Christy: Yes.
(The union negotiating team left the bargaining session and called for an emergency meeting with all union members. much less today. We need some agreement on this today. Nexon: We’ve got lots of issues to discuss. 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. Why don’t we put this one aside for now. we’re really prepared to go the distance on this benefits issue. Nexon: I’m sorry. This is a critical issue to us. 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. Here is what happened at the next negotiations session: Nexon: I’m sorry. it will cost too much.) 136 50 Practical Negotiation Tactics . Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. We need an answer today. The union members ended up voting not to strike at this time. We’re not going to reach agreement on this at all. or else we’ll be asking the membership to strike. Union: You don’t seem to understand. Second. This is something we just have to have. Union: You’re wrong. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. First.believing that Nexon would not risk a strike. If we’re not able to reach agreement on this. Many of our union members who are working part-time hope to work full-time. we want the part-time workers to apply for and fill fulltime positions as they become available. but working without benefits is simply not acceptable. Another bargaining session was scheduled. then all of our other demands will change. 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.
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.
Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her
50 Practical Negotiation Tactics
idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for
the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.
50 Practical Negotiation Tactics
his air-conditioning unit went out. Unions can strike at any time to achieve their goals if they have some leverage. Try bargaining with a plumber! This homeowner. while the other is not—that is. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. Example 2 Let’s face it: Sometimes one party holds all the cards. once had to call a plumber in for emergency repairs. He was at the mercy of the company that could install an appropriate unit the fastest. The owners of professional sports Applying Pressure 141 . not blessed with many household repair skills. its union has the advantage in the weeks just before Christmas. Since his toilet had overflowed and water was continuing to run all over the floor.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. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. It is sometimes referred to as “pressure bargaining. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. for example. such as the advantage of time. If the employer is a shipping and express mail company.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. the guy was in no position to dicker over the price of the repair. The same kind of thing happened a couple of years before that: In the middle of August. when one side has “leverage” over the other. he was able to successfully bargain for other services. Since the heating and air conditioning company held no leverage over him. and was forced to pay whatever they demanded. there were times when there was no pressure and no emergency. because this is the busiest time for that industry. On the other hand.
low employee motivation. If you have a special skill that an employer needs and few others have that skill. A note of caution: Circumstances in one round of negotiations might give one side an advantage. What goes around comes around. benefits. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. This gives it the upper hand in negotiating with employees. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. When the employer proposed adding duties to the job classifications. The employees had no power to resist the demands of the employer. etc. consider whether or not the two parties will likely meet again in the future to negotiate. but they are less willing to negotiate several months ahead. can suffer repercussions in the form of sabotage. however. and other undesired outcomes.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. then you are in a position where you can set reasonable demands on wages. Other employers find themselves in situations that actually reverse the leverage (when. On the other hand. either individually or through collective bargaining. the employer has the advantage: a supply of jobs. When one side places undue pressure on the other side. If so.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. he didn’t have to be flexible because the employees believed that they had no alternatives. (Team owners are notoriously unpredictable. it is the union’s turn to hold firm on its demand). despite strong resistance. if the unemployment rate is high and jobs are few. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. for example. she has leverage and can more likely hold firm on her price. but before you choose such a tactic. unemployment is low and jobs are plentiful. will what goes around come around? 142 50 Practical Negotiation Tactics . there are likely to be long-term repercussions.
Andrea: The doll is mine. Andrea. You’re driving me nuts. I can’t drive if you keep this up. the little girls began to fight over the doll. Tell Susie to let me have it. you have it this part of the trip. Susie: Okay. This time. Their dad tried to reason with them. the argument is over the doll’s shoes. Why? A sudden surprise can disrupt the dynamics of a negotiation. Example 1 A father and his two daughters were on their way to visit the grandparents.Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. Mom said so. Susie: The doll belongs to both of us. Just share the doll. you have it when we drive home. We’ve got a long ride ahead of us. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. and I can’t stand it.) Dad: Stop it right now. I took it out of the box. Andrea had taken them off the doll.) Applying Pressure 143 . (In a few minutes. the fighting starts up again. because you will probably only get to use it once. and here’s how the “negotiations” went: Dad: You two stop fighting. and Susie hid them under the seat. Just because you saw it first doesn’t make it yours. About an hour into the drive. Almost from the beginning of the three-hour drive. and Susie. Andrea: Okay. the girls had been fussy. but use this tactic judiciously. The doll can be shared. Consider making a suggestion or a proposal that completely surprises your opponent. (Their dad pulls to the side of the road and turns to face them in the back seat.
Dolly has to have her shoes. He initiated the litigation against the local school board members and several banks that invested the money for the board. they didn’t say another word.) Dad: Now there’s no more fighting over the doll. The auditor asked to meet with the editor to explain his position. (They continued to argue and whine and pinch each other. I think I have acted properly. Conclusion Dad’s use of a “surprise” tactic was extreme. and that they had invested and spent the tax dollars wisely. 144 50 Practical Negotiation Tactics . The litigation itself had been going on for more than three years. The tactic was so successful. Finally. Dad tried correcting them a few more times. and I hope I can convince you of that. in fact.Andrea: Give me the shoes back. Dolly doesn’t need shoes on in the car. Both Andrea and Susie were so shocked by their dad’s action. so it was worth the risk. He grabbed it and threw it out the window. I want the shoes. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. She can have them later. to no avail. The defendants contended that the auditor’s actions were politically motivated. at great expense to the auditor’s office and the school board. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. charging that they breached their duty in their handling these funds. but nothing else up to that point was working. Susie: Daddy didn’t say anything about the shoes. and reached back for the doll. Daddy said I got the doll on the way to Grandma’s house. he slowed down. The local newspaper was prepared to urge the auditor to end the litigation. 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.
Auditor: Well. We believe the other defendants will soon follow suit.Editor: I’m certainly willing to listen. Here are the papers. I think I have something here that will convince you otherwise. Obviously. there’s just nothing to back up your allegations. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. rather than drop the case. perhaps you should just cut your losses—and just drop the suit. as a matter of fact. Conclusion The editor wrote an editorial urging a resolution for the good of the community. this case needs to be dropped. That’s really the reason this has gone on so long. Auditor: I appreciate their arguments. but recommended that the parties reach a settlement. This morning. but I have to warn you that from what I’ve seen and heard so far. They’ve been making that same argument from the beginning. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. and a significant amount of money will go toward the tax fund. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. and it is costing your office money and good will. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. Your reporters will probably want to follow up on it. From what I can see. They are very persuasive that this is just a political battle. Editor: Well. I guess we’re finished here. Thank you for coming in. Applying Pressure 145 . I really think the community would be better off. the bank would not have done that had we not proven our case. but actually superior to some other entities you supervise. one of the banks settled with my office. Editor: Well.
Dad. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. but I think it will get a lot of use. I’d 146 50 Practical Negotiation Tactics .Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. Tina: I’m really against this pool table idea. 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. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. If the other side involves more than one person. 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. Tina and their son Kevin are against the idea. I want to talk about a car! Mike: It’s really not one or the other. you might be able to dilute their power by identifying their different interests and addressing them separately. I can remember spending hours playing with my friends and family when I was growing up. Mike knows he needs to get either his wife or his son on his side. Mike: I know. night after night. Kevin is against it because he is turning 16 years-old soon. although getting your license and getting a pool table are connected. especially Kevin. I know we’ll all enjoy it. they’ll be mobile! The last thing I want is for them to be out cruising around. Kevin: So am I. Kevin: I don’t really care about a pool table. and a car is more important to him than a pool table.
Wylma: Tom. Tom. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. only Kevin did. has just presented the company’s initial wage offer. received it without comment. she joined his side of the debate. Conclusion Mike found an argument that divided Tina and Kevin. Instead of both opposing the idea. don’t you think you guys would use it? Kevin: I guess so. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. A pool table could attract them here. Wylma was surprised the next day when Tom started the meeting off with an out-and-out rejection of the wage offer and made a demand for a wage increase of four times the company’s offer. and Kevin and his friends use it often. She noticed that Jim (another member of the union’s negotiating team. Kevin. Here’s how the negotiations went. then maybe it’s not such a bad idea. the head of the union negotiating team. They bought the pool table.like them to hang out here more. Once Mike convinced Tina of the idea’s merits. I thought we were making real progress. Tina: Well. the chief negotiator for the company. What happened? Applying Pressure 147 . A number of contract changes have already been worked out and Wylma. Mike: I really do. But I’m not going to hang out here all the time. I’m surprised. some.
This is just what we think is fair. Jim? Jim: Yes. these are accurate. forcing them to reconsider their demand. but he added some workplace changes that Wylma was comfortable negotiating.Tom: Wylma: Nothing happened. But Tom. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. Wylma: Tom. 148 50 Practical Negotiation Tactics . Let’s start again tomorrow morning.) Wylma: Now Tom. Wylma distributed copies of financial data that showed the company’s current condition. Your demand is totally unreasonable. Wylma: Jim. Tom had reduced his wage demand significantly. Wylma: Let’s take a break. Do you think this is reasonable? Jim: (looking uncomfortable) Well. you’ve seen our sales projections and production costs. Right. as Jim can point out to you. these are our actual accounting figures. When the negotiations began again. I think you need to rethink your demand. you’ve heard our demand. you certainly are aware of our financial situation. (When they resumed. Tom: We don’t think so.
Cory: Madison. I don’t feel Christmas in the way I used to. Madison: Okay. We can’t afford to buy each other things we really need. the oldest and youngest Jones children. some of the siblings decided they liked giving presents to one another. Example 1 The four Jones kids grew up. Applying Pressure 149 . Stay alert and watch for clues that a negotiation is about to get out of hand. but the thought that matters. especially between Madison and Cory. so you can find a way to quickly neutralize it. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. Ever since Mom and Dad died. so what’s the point? I don’t need another tie! Madison: It’s not the gift. it was easy to agree on just giving presents to the children. and it makes me very sad. 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. I want to say something. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. but as the children grew up and had families of their own. and had children. but it is really important to me.Tactic 38: Break the Tension Tension is inevitable in most negotiations. so pressure grew to draw names and exchange gifts. Sometimes the argument got heated. 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. When all of their children were small. Tempers flare and people say things they shouldn’t out of anger or frustration. married. You are almost 40 years old. get over it.
You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.
50 Practical Negotiation Tactics
Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.
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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.
If I can be the Princess. At some point. how about going out to the yard for a while? You can swing or play ball. C. was ready to color. the exchange will be between things of equal value. If there is resistance to compromise.” but she needed Dara to play with her. Mr. Then we can color. Isn’t it “later” yet? Right now would be a good time to go outside. I want to play “Prince and Princess.: Julie: Dara: Mr. however. and that doesn’t happen without compromise. I want to play “Princess” and I want Dara to be the “Prince. Both of the little girls liked to play ball when they were outside.” Dara. Example 1 Julie and Dara both attend a local preschool. not the Prince. don’t you want to play? We could color before your mom comes. (In a successful negotiation. or maybe tomorrow. it is better not to compromise. Dara. the individual might be afraid that the exchange isn’t equitable). who was outside with older children. each side must decide whether or not one more compromise will produce an agreement that they will later regret. they were the last children left in the playroom for the remaining two hours of the day. Julie wanted to play “dress-up.” Can I color now? You said we would color later. The day-care worker wanted to take them outside for a while so that he could visit with his friend.: Julie: Dara: Julie: Girls. One day. C.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. they would have to play ball with older children. 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. When that point is reached. but since the other children in their room were not there. 154 50 Practical Negotiation Tactics . Okay.
The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. you can come back in and play “Prince and Princess. the owner had to supply additional parking. 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. We want to play dress-up and then color. When his variance application was made public.” No. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. The owner and a small group of neighbors met to talk about these problems. failed to offer the children something that was as important as the plans they had made. C. or apply for a variance. neighbors became concerned about the changes to the mall. Example 2 The owner of a small strip mall in the heart of a residential neighborhood was planning to add a small movie theater to the other businesses in the mall. We don’t want to go outside.: Julie: Hey. and teenagers attracted by Making Progress 155 . Conclusion The children stayed inside and played dress-up. Mr. and they still had time to color. C. however. The existing parking lot didn’t meet the current parking standards for that size theater. According to the city’s zoning laws. The owner decided to try for a variance. the parking lot will start to look trashy. They did all the compromising they were willing to do. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. wouldn’t you like to go outside first? After you swing for a while or play ball.Mr.
Right now. So. with your plans to put the entrance of the theater on the east side of the mall. if I agree to move the theater entrance to the south side. We’d like you to prohibit cars from entering or leaving from the south lot. And. even though I’m not adding any parking. We’d really like to block off that cut-through and have the theater face the south. You could have all of the traffic enter from the north lot. the south parking lot has not been used much. 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. as you said. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. With the Comedy Club and the grocery store on that end. The neighbors: Owner: 156 50 Practical Negotiation Tactics . but it’s not ever full. In fact. the north lot is used more.the theater will start to hang around and maybe wander around our yards at night. not having direct access to the south lot from the street would be unworkable. only when that lot is full would cars come around the mall and park on the south side. the closest parking to it is along Elm Street. and we’d like to keep it that way. and break in his door. Not having in and out traffic to the south of the mall is just not very practical. I’m afraid. Right now. We hope you’re right. We’re just not convinced. I could put a privacy fence along the east and west—at the backs of your yards. What if I changed the entrance to the middle of the lot? That way. Many of our homes back up to that lot. lights in and out at night can be very annoying. driveways on the south side of the mall are along the east and west side of the parking lot. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there.
The fences created a buffer from the lights and noise. If I agree to move the theater entrance to the south. Now you’re talking about considerable expense. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. Agreed. and make sure the parking lot is kept clean.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. set back a driveway width. there could still be access from the street to our garages—just not to the main parking area. then will you agree not to push for increased private security? Yes. Making Progress 157 . The compromises were what everybody could live with. If the fence was set back the width of a driveway onto your property. put a privacy fence along both the east and west sides of the south lot. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. the neighbors reported that they were very happy with the way it all worked out. and they discouraged patrons from parking on neighborhood streets. And a year after the theater opened. Teens can form into gangs if left unwatched. add a new entrance into the south lot. however. Conclusion Both sides had to give up something on certain items in order to reach agreement. But you’re going to have to have some kind of security as well.
respectful. incident was usual or unusual. She learned that everyone in the neighborhood had complained at least once. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. I’m Joan. They might even start to underestimate your negotiating skills. If your opponent is aggressive or angry. they had gotten nowhere. just forget it. she just didn’t think it was a serious problem.m. Lonely: If you’re here to complain about my Rocky. professional. Your opponent might give in readily. Present your position forcefully.. and started to get upset.Tactic 40: Be Friendly Being polite. and because she was hard of hearing. but be friendly. Example 1 Joan was new to the neighborhood. Mrs. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. The dog was Mrs. and that as angry as they were. Joan had a new baby. She didn’t believe her neighbors ought to complain about the barking. Joan decided to at least try and talk to the neighbor. Close your windows at night and don’t listen. Lonely. and I just moved in next door. This gives you an advantage. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. and pleasant always enhances one’s ability to reach an agreement. 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. Joan was already pretty tired. thinking that you will be just as easy to work with on the sticky issues. but going out of your way to be friendly is an especially helpful tactic. Mrs. Joan: Hi.m.m. and what kind of complaints might have already been made. 158 50 Practical Negotiation Tactics . so her neighbor’s barking dog came as an unpleasant surprise. Lonely’s only companionship. because you are the one to set the tone for agreement. and didn’t stop until 6:00 a.
No. I might have to talk to you about Rocky. Well. (Joan’s sleep was disturbed by another night of barking. I’ve got a friend who is a veterinarian. Lonely: Joan: No. Why. Lonely: Joan: Mrs. Lonely: Joan: Mrs. He’s been keeping me up at night. I know that some of these people around here don’t like him. but she took her baby and went to visit Mrs. I’ve only got my Social Security. not at all. Lonely again. though. sure. The barking at night has been mentioned to me. Do you think his age has contributed to some of that? You know. He’s a real comfort to me. Well. is a really sweet dog. I can’t pay for something like that. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. by the way. 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. I just wanted to come by and introduce myself. isn’t he cute! He’s a handful. I’ll see you. no. it’s probably because they just haven’t had the time to get to know him. don’t worry about that. Lonely: Joan: Mrs. I stopped by and visited with him over the fence this morning. When he does. I guess so. I guess that would be okay.) Hi. How long have you had him? Almost eight years now. Mikey. then.Joan: Mrs. Maybe I could come back tomorrow and bring him? Oh. Making Progress 159 . Here’s my little angel. I sure hope he starts sleeping through the night soon. too. Who. Lonely: Joan: Mrs. I’d like to introduce you to my new baby.
After Joan’s veterinarian friend visited with Mrs. you would have. 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. 160 50 Practical Negotiation Tactics . Joan took up contributions from the neighbors. The barking all but stopped.A. Here’s how the meeting went: Company ZZZ: We’re very sorry.S. the mayor called and asked for a meeting with Company ZZZ officials. and Mrs.. It’s very difficult to make a move of this type without having it leak out. its 150 management and sales employees could continue to work in Happy City. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. of course. They anticipated that it would be an unpleasant meeting. Company ZZZ: (surprised) Well. that the press got hold of the story of our company’s activities before we could call you to let you know. he prescribed medicine that gave Rocky a more regular sleep schedule. that’s very understanding of you. I think that if you could have let me know ahead of time. Lonely and Rocky. Hearing about this from the press obviously puts you in a very embarrassing situation. agreed to meet with the mayor.Conclusion Joan’s friendly approach enabled her to understand Mrs. Mayor: (very friendly) I understand how these things happen. Lonely’s needs and arrive at a workable solution to the problem. Company ZZZ. Under its new corporate structure. overseeing a factory in Mexico and selling products in the states. Lonely didn’t have to pay for the medicine she could not afford. When he heard the news on the radio. recognizing that the layoffs would be an issue in upcoming local elections. U.
or would we need to involve the Malaysia group? Company ZZZ: Certainly. 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. 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. so we need to understand how we can affect their decision on keeping an office here. They need a really good deal on the plant price.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. We just haven’t heard anything yet. This strategy worked. The buyer is a “disadvantaged business” we have been working with for some time. the 150 management/sales jobs did end up moving to Mexico. Many laid-off employees did indeed find new jobs at the plant. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. and I want them to know that. because I’d hate for us not to make an appropriate pitch to them. and the mayor was reelected. Would you be in a position to talk to me about such a deal. Mayor: Great! Let me know when we can talk again. the city has a potential buyer for your plant building. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. You’ve been very understanding about this. 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. By the way. Unfortunately. Making Progress 161 . The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. Mayor: Please let me know as soon as you can.
00. thus becoming a source of embarrassment. age 15. Somehow. threats. the younger sister. Susan denied it. Alexis. were on vacation with their parents in Myrtle Beach. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Alexis agreed. Jones’s supervisor. 162 50 Practical Negotiation Tactics . Alexis knew this was not fair.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. Michael Wood. age 14. but Susan had only $20. and Alexis. Then he played the tape. until Susan said they would evenly split what they bought. The effect on the other party might be even more substantial if lies. She borrowed a tape recorder so she could ask her father if this was a fair deal. The two sisters had saved up a little money so that they could buy souvenirs. or simply “bad faith” methods have been used by the other party. They might worry that the tapes will be made public or given to others. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. Susan understood the impact a tape recording can have when it reveals a lie. who was disappointed to hear that she might propose such a deal. He asked his elder daughter about the arrangement. or used to pressure the other side to agree to certain demands. and Jones.00 to spend. are talking about a possible settlement of the issue. had $40. Alexis then played the tape for her father. the investigator. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. the accused. Fred Adams. South Carolina. Susan repeated her demand. this time in front of a hidden recorder. Conclusion For the first time in her life. Example 1 Susan.
Your request. “Do what I want. Mr. stares. Ruiz and Ms. Well. he also lost his negotiating position. So. He failed to think about what might be the next step. And you did not threaten her job if she did not.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. Jones suddenly realized that his strategy would not work. Making Progress 163 . And please describe your general manner. No one could have possibly misunderstood your intentions? No reasonable person. Starr.” meaning something other than copies? No. You never touched any part of her body? Not even accidentally? No. Jones. I think I can write my recommendation. to quote you. But by refusing to repeat his answers. When Adams set the tape recorder on the table and revealed that he had witnesses. Conclusion Jones had knowingly lied when he denied the charges. Appleton both claim they saw the incident and will testify. I’ve brought a tape recorder with me. I simply asked her to make copies for me as quickly as possible. Stuart. (a long pause) I want to see my lawyer. exactly what you said to Ms. Mr. you are aware that the next step in this process is to ask witnesses to come forth. and gestures did not have a single hint of sexual implication or innuendo? None at all. and now I’ll ask you to repeat your answers—on tape. So you refuse to repeat the answers you just gave us? Yes.
” the divider. Maria and Roberto: No. Oh. the classic “split and choose” tactic might be the best way to settle the issue. Realizing the potential of getting the “smaller half. with the remaining part going to the person who did the dividing. is usually careful about dividing the object into two equal parts. one person is given the task of dividing the object(s) into two parts. which certainly is large enough (he naively thought) for two young children to easily share.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. Many of us learned this one from our parents: After two people agree to the strategy. Roberto will get to choose which half he wants. because you did the cutting. The second person then chooses which of the two parts they will receive. of course. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. Their dad instructed them to share the candy bar. take this knife and slice the Snickers into two halves. Maria. 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. What is it? Maria: Father: 164 50 Practical Negotiation Tactics .
Archie: I really don’t care either. There is only one place for an access road that must serve all lots. Lots must be at least one acre to be developed. Example 2 Two friends and business partners. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. and wants to divide it into two separate parcels. Clarence: Right. 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.000. They all have a great view and are equally desirable to build on. That makes them more desirable. but is not sure how to arrive at a fair split. Clarence agrees to divide it. Clarence and Archie. 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. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. jointly purchased fourteen acres of lakefront property several years ago. Deal? Clarence: Sure. Archie: Here is the map. The problem is that one of us will get four lakefront lots and the other will only get three lots. even children. They have a recent appraisal that values the property at $150. quickly recognize the fairness of the divideand-choose method. according to county deed restrictions. that sounds fair.Conclusion When two people desire the same object and it is something that can be divided in some way. I don’t really care which lakefront lots I keep. Archie: That’s true. both parties. Then I will choose which parcel I want. Archie is ready to build a retirement home on the property. so we should be able to divide the property fairly. Making Progress 165 .
Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. Archie chose the parcel with the three lakefront lots. and both men were happy with the arrangement. and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics .
What started out as a single issue is now a combination of a major issue and a much smaller issue. we’ll take the suite if you’ll throw in free delivery and set up the furniture. miles from their home.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. supposedly the bargainer in the household. Jason was having a hard time getting the salesman to lower the price. attach legs. 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 . Her husband Jason. delivery was limited to a small geographical area. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. Conclusion The amount the couple spent was fairly large. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. With a great deal of effort.” thus extending the scope of the negotiations. However. and the delivery carrier doesn’t set up mirrors. Brenda did her part when she said. so the salesperson delivered the suite himself. His tactic was to throw in a “nickel” in order to make lots of “dollars. etc.” Under store policy. is expected to dicker over the price.” Many people have witnessed or used this effective negotiating tactic. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. “Okay. he also set up all of the furniture in a second-floor bedroom.
In one case.important item. we’ll agree to Health Plan A with another ½ cent on the pension fund.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. “Okay. If one party misjudges the situation. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. so be prepared to withdraw the nickel and dime item at the hint of trouble. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. At the end of negotiations. This experienced bargainer said. 168 50 Practical Negotiation Tactics . it can be a dealbreaker.
Donna: They match. Donna: No way! These are the last two pieces of furniture. thus creating the impression in others that the good qualities they see are present all the time. but they are two pieces of furniture. Donna: Okay. Kathy: I’ll take the pool table. and performance evaluations for people to come across as likeable. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . Kathy: Then I’ll take the couch and love seat. Kathy: But they are a matched set. Donna: I’ll take the bar with stools. and all the rest is small junk. You can go first. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. I’ll take the color TV. Kathy: I suggest we take turns choosing which of these things we want. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. or knowledgeable. trustworthy.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. People tend to make an effort to put their best foot forward. decision-making meetings. This creates what is called a “halo effect.
He’s our cousin. what can we do? Give me the couch and love seat! No. and he has always struck me as an honest person. Good idea. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. with a record of labor involvement that included three recent strikes. What for? Tell him the situation. The union negotiators. I want the love seat. I want the stools. and ask him if the couch and chair should be one item or two. and if the bar and stools should be one item or two. Johnny had the “halo” of an honest person. Example 2 During a heated labor negotiation. I trust his judgment. 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. 170 50 Practical Negotiation Tactics . Let’s call Johnny Ryan. He might or might not have also been a good arbitrator. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. (Pause) We’ve got to settle this today and get this stuff moved.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well.
The teams took a weekend break from the stalled negotiations. He said he believed that it would work as presented by management. but the power of the so-called halo effect was great. even if the proposal appeared to be valid. the management team hired Sam Boston. On Monday. when negotiations again stalled on a retirement plan issue. thus bringing the negotiations to a conclusion. He solemnly told the union negotiators that he had been hired to review it. the former union president. 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. and that he did. the consultant did not speak. Making Progress 171 . The union accepted the proposal. Boston went to the negotiation table with the management team. During the break. They might have stretched his halo farther than his expertise and experience warranted. Boston was widely known as a totally honest man who speaks his mind.simply did not trust the management team. without any reservations. as a consultant to review their proposal. the city management again hired Boston. This time. but his mere presence caused the union leaders to accept a management point as valid. Two weeks later.
000.500. has owned the house for 24 years and is downsizing to a condo. Sam Jones.000. They believe it is overpriced. but the key is to gather facts that you might need—not just the facts that you will need.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. I’ll get back to you. but the right facts presented at the right time can chill or astound and completely turn things around.000 under the listing price! We realize that. This offer is for more money than any four-bedroom houses on this neighborhood list. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. $235. Here’s a list of the five that are about the same size as yours. $237. Sometimes. 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 . but you’ve priced it way too high.000. They sold for: $225. $229. What? That’s $35. 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. The owner.000.000. We love your house. and we are countering with an offer of $250. Example 1 Henry and Maria Lopez are interested in a house that lists for $275.000. the other party will ignore or refuse to believe the information. but we feel that it’s a fair offer. (Next day) We’ve reviewed the records you’ve produced.000. and $237.
No one can go over $1. and we know that only this model will meet our needs. Conclusion The Joneses had based their asking price on the advice of a friend. Hatfield: While I was at purchasing. I’ll be… Okay.000 each. Supervisor: If I okay this purchase order. The last 20 were over $2. and wisely chose exactly when to present them in order to make his point. Order the new computers. Supervisor: Well. Example 2 Supervisor: You know the policy. I’ll get called on the carpet. if other departments have ignored the policy. We’ve talked with purchasing and we have the authority to buy seven for $2. Here it is.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. That’s the bottom price. You can’t pay more than $1.600 unless the company president approves. who was not particularly knoledgeable about real estate. let’s not worry about it. Conclusion Hatfield had anticipated what his supervisor’s position would be.600 for a computer. I asked for a list of all new PCs bought this year.400 each. We accept.000. Making Progress 173 . Well… We have a written counter of $245. Hatfield: My staff has done a lot of research. and did his homework. He found facts that supported his position.
Maureen: Well. The effective use of probing questions can help achieve a favorable settlement. some people would have forty or fifty books out at the same time. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. Otherwise. I’m sure you would not. Maureen. I can do that within the rules. but I don’t set the policy and I can’t make exceptions. yes. But I can’t break the limit rule—it is an absolute rule here. I can’t check out these four books? Jenny (Librarian): That’s the policy. I want two of these. and they would all be unavailable to others. can you check out two on a card for him? Jenny: Well. Example 1 Maureen: What. If you trust me. you know me. and two are for my husband. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. Maureen: Well. A maximum of three books can be checked out to a person at any one time. Would I do that? Jenny: Maureen. I trust you. but you don’t want to jeopardize your job? Jenny: Yes.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. 174 50 Practical Negotiation Tactics . They can help you identify or better understand what the other side really wants. reveal misperceptions or lack of knowledge about positions that can be corrected. Maureen: So you trust me with the books.
and they don’t even have a use for the sales data. If that data ended up in the wrong hands. Babu. Can you get me the number? Sure. Sue. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. They say it’s a security issue. it could kill us. Brooks. But this forces us to make decisions without complete information! Yes. Security? Right. and Kenzie. Why? Some policy? Yes. (Next day) Do you have the policy about giving out product sales information? No. What’s the policy number or date of approval? I don’t know. Mary. Jay. Mary and Kenzie? They are 2-3 pay grades below us. I couldn’t find anyone who knew it.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. but it’s because you don’t have access clearance. we can’t do that. Making Progress 175 . 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.
When can I get the data? Mark: Today.” He intended to do this until he hit a dead-end or was able to find a solution to his problem. Jack: Can you ask your V.Mark: Well.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. Jack was able to receive clearance as well. if we can have access? Mark: I guess so. that’s been the policy since I’ve been here. I’ll sign now. His probing questions turned up a critical fact. 176 50 Practical Negotiation Tactics . I’ll get it for you ASAP.P. Jack: Here. Once he discovered that employees in lower pay grades had access clearance.
how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. days. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). and the child learns an important lesson about life. T Reaching Agreement 177 . this tactic can produce an agreement. In this process. and the classic Walk Away (Tactic #48). 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. 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. this process can easily result in a final settlement. When multiple issues are at stake and most have been agreed upon during negotiations. If friends or neighbors need to settle something but prefer to avoid the negotiation process. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. When two parties believe they have an oral agreement. hours. They bring it out when a dispute arises. the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. or even months after the first offer is presented.
2) allows the other side to feel the release that comes with completing the bargain.Tactic 47: The Premature Congratulation This tactic draws its strength from timing.C.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. She said. Larry Snyder gets bored staying in any one place for many days. Example 2 Negotiations can take a long time and incorporate many issues. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . The bargainer skillfully 1) begins the congratulation sentence “I agree…”. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. 3) and adds one last key demand to the congratulation sentence.” Conclusion The husband was so excited about visiting Washington.C. His wife had carefully planned her exact “premature” vacation agreement. Let’s do go to Virginia Beach and Washington D. “I’m thinking of agreeing to your plans for vacation. off-again discussions. D. but his wife Nancy likes to stay put and relax. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. As he hugged her. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year. They both have stressful jobs and look forward to their annual vacation together. After days and weeks of on-again. Nancy brought up the subject of vacation again after dinner.
“…as long as you give us a 45-day probation period. we made some small concessions on financial matters. but the other side continued to ask for 60 days. but acceptable. but held firm on remaining operating principles.” Bob: Ted timed this perfectly. as the negotiator came closer. Therefore. We all knew that it could come down to agreement or strike. because it makes you pretty vulnerable. My team had convinced me that doubling the time frame would create a real problem on the shop floor. However. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. “It was hard for us. symbolizing that he was agreeing to the entire final offer. and rested. The old agreement specified a 30-day period. One of the best pieces of negotiation advice is to remain fresh. fit. (This is a bad position to be in. I felt the tension in the room. There were grins and handshakes coming from the other side. Reaching Agreement 179 .almost willing to accept any deal. but we agree to everything in your final proposal…” Members of my team shouted hooray. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. When the chief negotiator emerged with his team and headed toward my team. It was so close. The celebration had begun. he turned on a large warm smile and extended his hand to shake. Ted said.) Here’s what happened: Bob: I knew that the other side was similarly harried. One operating issue involved the probation period for new employees. My team was afraid we would not even come to an agreement. In our last offer. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. but also that they sensed the weariness of my team.
However. the negotiator skillfully finishes his words of congratulations by inserting one last key demand. 180 50 Practical Negotiation Tactics . knowing that it will probably be agreed to in order to continue in the euphoria of the moment. The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation.
but I thought I might want to try a new Highlander. I don’t want to negotiate. here are your keys. The next morning. right? Jay: Yes. be sure you think this through beforehand. Jay: Hi. or go after you and perhaps make a new concession in order to get you back to the table. what can you do on a 36-month lease? Reaching Agreement 181 . the following exchange occurs. Whether you are really bluffing or you are serious. I like it. (Vahaly drives the new Highlander home. and he can simply buy it when the lease expires. You bought your wife a new van just last year. He stopped by Pembroke one day to look at the new models. all from Sue Wilson.) Jay: Sue. Sue: I remember you. a veteran salesperson.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. if I roll over the lease to a Highlander. You had time to assess my car. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. but his Avalon has been a good car. Your opponent will have to either let you go and run the risk that things are really over. My name is Jay Vahaly. I’ve worked with you before. too. but my Avalon is a good car. Jay. He really likes it. and the lease on my Avalon is about to expire. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. how did you like it? Jay: Okay. Jay. Sue: Well.
(He walks away) Sue: No. they came down to $199 more on a thirty-six month lease. Sue: Sorry. (Jay got in his car and drove home. I thought I’d get a fair deal.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Please go back and work out a lower lease payment. a successful musical instrument sales and rental store. Let me try again.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Sue: I’ll try. That was the figure he was looking for. $100 more. They’ve talked about retiring in recent months. I’m disappointed. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. He was prepared to keep his Avalon if the lease was even $1 more than his limit. Jay. He effectively used the walk-away tactic to let Sue know that he was firm on the price. Jay—wait. Jay. but 182 50 Practical Negotiation Tactics . Jay: What? I was thinking the lease payment would be. These Highlanders are hot items! Jay: Well. Jay accepted. Sue called him as soon as he walked in the door and offered another $50 break on the lease. (15 minutes later) Sue: Well. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. at most.
0 million. visited their store. In reality. Larry: Judy.5 million for the building. today. a local developer. What do you think? Judy: Larry. let’s eat lunch. Reaching Agreement 183 . and we gave you our price.) Larry: Michael is here again. I still want to develop this block.5 million. and I’m not interested in less. Larry: Yes. You rejected it. and he is offering us $4. Judy: Larry. (Judy and Larry walk into the back room and close the door.both of them love their store. Michael calls on them again with a check for $5. Larry: Michael. after no contact from Larry or Judy. and I’m prepared to offer you $4. so why are you here? Michael: I’ve discussed it with my partners. Michael: Good morning. you’ve already told us that. which the Bizannes accept. go back to your office. but their continued walkout convinced Michael that they would hold firm. they were prepared to accept $5.5 million. Larry. Michael: Well. How’s business? Larry: Great! I’m surprised to see you again. Two months later. our accountant said it’s worth $6 million. with a certified check. come out here! (Judy comes out from the back room. One day. Larry. Michael: I have a check right here for 4. and I only need your building to own it.5 million. Michael Roberts.) 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. He met with Bizannes twice before.
and would be able to restore hers as well. but they wanted to give Jenny $500 for her “share” of the machine.000. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. I offered it to you for nothing. Lynne told Jenny that she and her husband Gary have restored two other Singers. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. In most arbitrations. Jenny: No. 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).000. Six months later. In arbitration.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. 184 50 Practical Negotiation Tactics . Example 1 Jenny and Lynne are sisters. That was the deal. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. I won’t take it. In ﬁnal offer arbitration. Keep the $1. Jenny has an antique Singer sewing machine. both sides have agreed in writing to accept the arbitrator’s decision. which is generally voluntary. which she has kept in a barn for over ten years. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. Lynne: No. Jenny told them to sell it. Lynne and Gary bring the restored Singer to Jenny’s house. Lynne responded that this was their intention. 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 told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). Each party wants their offer chosen. One day Lynne dropped by for a visit and the discussion turned to the old Singer. In mediation. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. Let’s split the money. They inform her that they put the machine on e-Bay and have an offer of $1.
As a brief explanation. Ralph: Right! (Friday at 3:00 p. Tina: Yes. since he could only choose one offer.Jenny: Dad: Okay. Their father found Jenny’s position to be the most reasonable. (One week later) I think Jenny’s position is the most reasonable. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. Any increase in value was due to the work of Gary and Lynne. but we’ve made no movement on any of them since we started. My troops are getting restless. Example 2 Ralph: Well. At best.” Lynne proposed a 50-50 split. first on the health insurance co-pay. based Reaching Agreement 185 . binding decision on the three items. the old machine was only worth $50 when Lynne hauled it away. Tina. and meet back here in 72 hours—3:00 p. The union’s position could have run into millions of dollars.) Judge Ryan: Here is my written. on Friday. so I am invoking the finaloffer arbitration ground rule we have in place. They should get the other $950. Ralph: I know. I can’t see any way to reach an agreement. we are down to only three unresolved items. I’ll buy that.m. after six weeks of negotiating. Then we both submit our final offers to Judge Ryan within 48 hours. Tina: Good. I have chosen management’s offer to keep it as it is under the current contract.m. he did not need to “haggle” with them.
000—less than 1 percent of the total package. I’m sure you realize that we could have taken six more weeks to reach the same point. Conclusion The final-offer arbitration process enabled the parties to gain a fast. nor why their method was superior. I have chosen management’s offer because the union did not justify why the past practice should be changed. I have chosen the union’s final offer. Finally. No increase has been given for six years. Well. and peacefully finalize a contract that contained several important gains for both sides. At least we both saved time. money. on the clothing allowance. It will only cost $120. on the merit pool distribution method issue. and stress. and an item that large should have been negotiated at the table.Ralph: Tina: on last year’s data. but we agreed to this process. reasonable resolution to their last three unresolved issues. 186 50 Practical Negotiation Tactics . Ralph. I’m not happy with your decisions. Second. Now let’s get a signed contract.
Example 1 Bill and Paulette had been house-hunting for some time. At the very least. 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. The owners were selling the house without a real estate agent. all the usual stuff in a sale.000. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. everyone is busy grappling with the details of the negotiations. and decided to stop by to see if they liked the house. Bill and Paulette fell in love with the house. we won’t be involving our real estate agent. and one of the other couples looked very interested. They were not the only couple to come to the open 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. During a discussion. They saw the “For Sale” and “Open House” signs. however. not the furniture. Seller: We’re asking $152. Obviously.000. Seller: Yes. they looked at this particular house on their own. Bill: Reaching Agreement 187 . 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 pulled the seller aside. If we shake hands on it right now. They finally looked at a house they really liked. and felt that they would have to work fast to make an offer before someone else did. and while Bill and Paulette had been using an agent to help locate houses. We’d like to make you an offer of $150. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude.
and had been prepared to drop his price to $145. It worked. In the section for fixtures and miscellaneous items to be left on the property. Under the section for appliances to be left on the property. Sign here. I think we can work something out. and that the problems with her job performance were.Seller: Just a minute. In her complaint. Bill: (pleasantly surprised to learn that the garbage disposal. The supervisor pointed out that he had a staff of 20 or so women. real.000. he left the price at $150. in fact. he began to have “problems” with her job performance. Example 2 Monica brought a sex discrimination charge against her employer. (The seller recorded the offer of $150. a public agency. the hutch. the hutch. Conclusion The seller had always intended to leave the garbage disposal. and when she refused. he listed an attached hutch in the kitchen. since he probably would have missed them) Yes. and two area rugs.000. Let me just get the standard “offer of sale” form and fill out what I hear you saying. then we have a deal. the refrigerator. he listed the stove. and the two area rugs were specifically included. she said that her supervisor had repeatedly asked her out.) Seller: So. Seller: Okay. and the two area rugs. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. the house is yours. and the garbage disposal. If it’s what you meant.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. that’s what I meant. look this over. but I’d like to make sure there are no misunderstandings. all window blinds and drapes. When he had the chance to put the deal in writing. The supervisor assured the employer that there was no basis for her complaint.
And the confidentiality clause is standard. and must agree not to tell anyone about the $100. Withdrawing. You’re just trying to make it seem as if your supervisor did nothing wrong. settling—What difference does it make to her? She’s getting her $100. Monica had.000.000 without actually having to prove anything. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents.000. He offered to send settlement agreement papers to her. Look. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. He’s happy to prove that in court. you didn’t mention in the agreement that in exchange for the $100. and expensive matter. my client is supposed to formally withdraw the complaint rather than just settle it. 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. I’m He: She: He: Reaching Agreement 189 . but said that fighting the charges would be a long. by this time. It might be standard when there’s a settlement. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim.000. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. even though we’re certain we would prevail. But the employer doesn’t want to go through the expense and publicity of a trial.000. then Monica had to acknowledge that the supervisor did nothing wrong.there was little basis for the complaint. drawn-out. but it’s not standard when a complaint is formally withdrawn. Why’s that? Well. The supervisor insisted that if the employer felt he had to settle.
Monica accepted the $200.000 when all that was asked for was $100. There was a confidentiality agreement. I’ll take your offer back to her and let you know.000 just to get the employee to “withdraw” the complaint. but word did get out that a public agency paid $200. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. It was made clear that the employer had paid the additional $100. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.000. 190 50 Practical Negotiation Tactics .She: authorized to pay $200.000 and the conditions of the offer.000. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume. to his disadvantage.
it is much more effective in the long run when the parties enter into “win-win” agreements. Putting the Agreement in Writing 191 . commitment. most certainly needs to be in written form. then the parties have to abide by the agreement. operating under an agreement after it has been reached can be even more difficult. rather than attack each other. If the agreement reached at the time had been put into writing with all three sisters signing it. Certainly someone has said to you. The degree of detail and formality of a written document will. depend on the kind of negotiations in which you are involved. and contract. it would have been easier to resume negotiations at a later date. “That may be what I said. and when they agree to solve problems together. but it was not what I meant. A union contract. Putting an agreement into writing serves three purposes: communication. However. even an informal agreement benefits from some type of written documentation. “Oh. a written document is hardly necessary. In Tactic #17 (Package Items). however. talking is not always the same thing as communicating.” By the same token. When two friends agree on what movie to see. One way to help the parties abide by an agreement is to put it into written form. when they engage in honest “give and take” negotiations. Think of how often you have said to someone. As these examples of personal and business negotiations show. A Communication Hearing is not necessarily the same as listening. Reaching an agreement is the first step. Unfortunately.” Clear communication is essential if you want to reach an agreement and have it abided by. I thought you said something else. the three sisters reached an amiable agreement. but some of the decisions were put off for a couple of months.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. reaching an agreement is sometimes a long and difficult process. of course.
192 50 Practical Negotiation Tactics .Communication is a process that involves a sender and a receiver. And because the sender and the receiver are two unique individuals. you have created something tangible that can be referred to in the future when memories become fuzzy. When communication is limited to the spoken word only. pictures. Who isn’t excited about buying a brand new SUV or truck? Until. or movements. a couple of months away.” In Tactic #14 (Don’t Always Hide Your Weaknesses). When you create a written record of the details of an agreement. 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. he can be reminded of the details because it’s all there in black and white. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. 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. or movements being used by the sender. that is. nine hundred and forty-four dollars—$22. seek information. the price is spelled out in the loan document as “twenty-two thousand. or express a thought or emotion through words. His mom could more easily enforce the agreement if she had it in writing. the message being conveyed and received might be understood differently. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. The receiver has to decode the message being sent by trying to understand and interpret the words. If Jason fails to live up to his side of the deal.944. sounds. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. pictures. In Tactic #4 (Use Objective Criteria). sounds. The sender wishes to convey an idea. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it.
Both parties must receive a benefit or something they personally consider of value. When you are ready to commit yourself in writing. one party will change behavior in exchange for something of value from the party who wants the behavior changed. You can do this more formally by taking them to court (perhaps as a last resort). and how much. the address and description of the real property. pulling an agreement in writing. dating it. ask yourself the basic questions of who. why. which. protect yourself by having a written. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. and so on in standard contract form. the real estate contract includes information about the buyer and seller. say. details such as what fixtures stay or what appliances go can be easily overlooked. as many people learn when they purchase a home. Carefully and completely describe the subject matter of the agreement. have your spouse also agree to the details of the agreement.Contract Finally. and getting all the parties to sign it usually creates an enforceable contract. In either case. If you have agreed to pay someone to house-sit while your family is on vacation. Generally. 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. Here’s what we mean. your plants die because the house-sitter wasn’t told to water them. One party wishes to buy what the other wishes to sell. in writing. leading to misunderstandings and contract disputes. where. or it isn’t an agreement—it’s merely the conveying of a gift. WHAT? The written document should clearly describe the item(s) covered by the agreement. However. when. which kind of. Failure to do so can lead to big problems. and put that information into the document. signed. 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. what. how many. Putting the Agreement in Writing 193 . one party will work if the other party pays for the work. and dated agreement. before the trip. WHO? Provide of the full names the parties necessary to the agreement.
agreed to the same thing.The remaining questions fill in the details of the agreement. Putting an agreement in writing. And it can create a tangible reminder of the deal (or an enforceable agreement. which one or which kind of. and having all parties sign it ensures that the parties have. depending upon the deal: when or where. the better. if that becomes necessary). in fact. It gives the parties an opportunity to really buy into the deal. The more-specific and clear these details are. how much or how many. 194 50 Practical Negotiation Tactics . 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 .
________________ 4. ________________ 8. ________________ 5. ________________ 10. ________________ 6. ________________ 3.Name of Negotiation Tactic 1. ________________ 9. ________________ 2. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 7.
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Pocket Negotiator. Eshelman. D. The Negotiation Handbook. 2nd ed. 1991. 2nd ed. Mediation. Negotiating in the Real World. Los Altos. Fisher. The Relaxation and Stress Reduction Workbook. Lewicki. and J. Labor Relations and Collective Bargaining: Cases. Practice. Inc.. Heavrin. Gavin. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. R. Maddux. 1999. David. W. J. 1988.: New Harbinger Publications. 1991. M.: Crisp Publications. W. and C. 1980. Calif. George. Inc. K. Irwin. Fisher. Sharpe. Negotiation Skills. Prospect Heights. Upper Saddle River. 1988. New Jersey: Prentice-Hall. New York: Basil Blackwell. New Jersey: Prentice-Hall. New York: Bantam Books. Saunders. 1996. 1997. Minton.. You Can Negotiate Anything. and B. Chicago: Richard D. Getting Together: Building Relationships As We Negotiate. The Negotiator’s Handbook. 1989. 7th ed. Patton. New York: Penguin Books. Getting to Yes: Negotiating Agreement Without Giving In. Inc. Cohen. Roger. R. Calif. Ury. Fiske. Victor. and M. Ill. Brown. McKay. New York: M. Domenici. and S. Roger. Clark. Fuller. Inc. LittleJohn. New York: Simon and Schuster. 2004. Cleary. Herb. Inc.: Waveland Press. Oakland.E. R. Gotbaum. E. and Law. New York: Penguin Books. and S.REFERENCES Carrell. C. Inc. Inc. Patrick J. Upper Saddle River. M. Kennedy. References 199 . M. 2001. and J. 2001. 1987. University of Missouri: Columbia Press. The Essentials of Negotiation.
Raiffa. 1998. Inc. Massachusetts: Harvard University Press. Massachusetts: D. Weeks. Cambridge. Lexington. New York: Bantam Books. Cambridge. www. Howard. 1996. Howard. The Eight Essential Steps to Conflict Resolution. New York: Penguin Putnam. George. Taking Charge/Managing Conflict. 1991. 1999. The Art of Negotiating. 1987. Sharpe. Dudley. The Art and Science of Negotiation. Bargaining for Advantage. Ury. Massachusetts: PON Books. J.negotiationsources. 2001. C.org 200 50 Practical Negotiation Tactics . Raiffa. Inc. Tsogas. Labor Relations in a Global Economy. Stulberg. 1981. G. The Mind and Heart of a Negotiator. New Jersey: PrenticeHall. Shell. R. Gerald I.E. New York: Simon and Schuster. L. William. New York: Viking Press. 1982. Thompson. Inc.Nierenberg. Upper Saddle River. Lectures on Negotiation Analysis. 1994. Getting Past No: Negotiating with Difficult People. New York: M. Inc. B. Heath and Company.
In addition to negotiating numerous litigation settlements and contracts. and negotiations. and MBA and B.A. He received his doctorate from the University of Kentucky. HR Magazine. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. and served as President of the Board and Mayor Pro-tem for three terms. Labor Law Journal. Human Resource Management. The University of Nebraska-Omaha. The Personnel Administrator. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. Carrell is Dean of the College of Business at Northern Kentucky University.ABOUT THE AUTHORS ichael R. which is located in the greater Cincinnati area. Carrell are in the fields of collective bargaining and labor relations. Carrell has held academic positions at California State University. organizational behavior.D. Business Forum. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. Books published by Dr. Marshall University. The Academy of Management Review. During his academic career he has received awards for both outstanding research and teaching. Dr. in Economics from the University of Louisville. and the University of Louisville. M Christina Heavrin J. he was elected to the City of Louisville Board of Aldermen for five terms. Bakersfield. Personnel Journal. In addition. and Public Personnel Management. Morehead State University. 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. Personnel. 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 and Human Performance.
the City and a for-profit hospital for guaranteed indigent health care services for city residents. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. Jefferson County. 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.park and a successful industrial park in the City’s enterprise zone. an agreement between the State of Kentucky.
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