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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
start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. they pay the sticker price. few people understand that normal interactions represent bargaining opportunities. 4 50 Practical Negotiation Tactics . practical tactics useful in real-life situations at work or at home. but many of us miss the opportunity to bargain in other situations. exactly. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement. or engage in an unproductive argument. Who. with family members. • A co-worker asks for volunteers for a new project. 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. at a flea market. • A child wants a new toy now. This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. But if you scored 8 or less. with neighbors. Most readers will no doubt recognize some of these strategies. some will in retrospect even remember being the victim of one or two of them. such as these: • You receive the wrong order at a restaurant. accept what is given. Unfortunately.negotiator! Pass this book on to someone else who needs it. Instead.
what can you do for me?” Or this to a restaurant manager: “This food order is wrong. that can be negotiated. A teenager wants to buy his/her first car. such as price. you must advise the other party of your intention to negotiate. “Well. perhaps you can say to a hotel clerk. What are my alternatives?” During an employee evaluation. and I don’t have time to wait for another. be prepared to bargain. Interdependency. 3. The parties involved are interested in reaching a common goal.” When you recognize that something can be negotiated. perhaps the employee can say. Each one has the five key characteristics necessary for bargaining: 1. A friend is about to select the movie he/she wants everyone else to see. 5. Your boss reviews your past year’s performance. Decision-making ability. some resolution must be negotiated. All of these situations are opportunities to negotiate. Multiple parties. The parties involved can make a decision by themselves. condition. time. or items of value. The parties are interdependent: what one party does affects the other. There are flexible elements to the situation. 4. Flexibility. and each side can involve one person or several people (each representing one “side” of the issue). “I’d like Introduction 5 .• • • • • • • A hotel clerk tells you that your reservation was lost. Therefore. In some circumstances. Mutual goals. There must be a conflict in the sense that what one wants is not what the other wants. A service repair person gives you an estimate on some work. 2. one party is only allowed to follow policy or must wait “until the manager arrives. For example. Your spouse wants to buy new furniture. Two or more sides are involved. A neighbor wants to remove an old tree on your property line. since you lost my reservation. In some situations. Both sides want a settlement.
and use the forms in the back to identify the issues.” To a neighbor you can say. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated. “I see why you want to cut down the tree. Keep this book handy when preparing for any type of negotiation. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. 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. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. and the tactics that might move the negotiations along. the facts. but I believe it adds value to our house. Once a settlement is reached.time to look over this performance review and respond point-by-point. negotiations can be concluded with a written or oral agreement. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them. 6 50 Practical Negotiation Tactics . and meet with you again. the parties and their interests.
or child. do you believe that you negotiated the best possible deal? 4.How good are your negotiation skills? Place a check in the box that applies to you. or division of household duties. When you purchased your last home or car. As a parent. but you did not? 8. allowance.? 10. spouse. Yes No Self-Assessment Quiz 1. Do you routinely negotiate for better accommodations when you check into a hotel? 3. have you ever required a written agreement covering chores. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. did you request appropriate compensation? 6. 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. etc. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. do you routinely negotiate a last add-on before you close the deal? 9. In the past. When making a major purchase. The last time you received sub-par service or food in a restaurant. Do you wish you could negotiate a change in your job duties or salary? 7. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5.
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The Negotiation Process 9 . etc. decide how complicated the issue is. The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. one for another. the process will be fairly straightforward. Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes. The “Quick Model” approach outlined below is good for simple negotiations.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). if the situation involves a number of detailed or complicated issues or the stakes are relatively high. They’re referred to as “win-win” because each side can achieve their goal. thus allowing each side to achieve one of their goals. If it is a relatively informal situation. On the other hand. the process will probably take several weeks or months as the parties move through all the stages. state. Examples: • office location (city. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). including those that are less obvious.
but feel free to try them when they seem most appropriate to your specific circumstance. Depending on the situation and the parties involved. or even skipped altogether. What one side gains. rearranged. 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.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. the other side loses. Examples: • an item sold by one party and bought by the other • wage increases won by one side. stages can be combined. 10 50 Practical Negotiation Tactics .
The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time. Information. Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 .
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SECTION III: 50 TACTICS FOR SUCCESS
Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:
1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.
50 Practical Negotiation Tactics
Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.
as a last resort. his BATNA was not to hold out for more money. and final offer. The union is demanding wage and benefit increases. selling became an attractive alternative to a strike or prolonged battle. The Jaggers gave the union their “last. and it now employs 230 craftsmen. best. For the past two months. inventory. 16 50 Practical Negotiation Tactics . and equipment. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. the Jaggers decided to seek buyers for their land. notified all the employees of their intentions.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment.” which was refused. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. providing them with a very good income for life. The threatened strike became a reality. Conclusion Selling their business was the Jaggers’ BATNA. They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. The union negotiators thought the Jaggers were bluffing. The owners. In this case. but rather what the buyer planned to do with the car. The $56 million dollar business took them 30 years to grow. They learned that their assets would be easy to sell and were worth more than originally estimated. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. With only two weeks remaining before a threatened strike. as Harvey had for many years. The union negotiators convinced the employees that this too. When negotiations with the union became hopeless. was a power play.
Make me an offer. Gosh. Just as important is the why. This is a good thing to know. How much are you thinking it’s worth? John: Well. it’s still perfect. for example. Just running out of space. so Tom was surprised when John called him out of the blue one day with a proposal. it’s to your advantage to know what is behind a seller’s decision to put it on the market. you still interested in my rifle? Of course.000? That’s more than I planned. Preparation 17 .Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. It is extremely rare—one of only 100 made with that bore and handle. she might have to take a lower offer just to be able to move. Tom: $20. I’ve been thinking of getting rid of it for a while. sure. What changed your mind about getting rid of it? It is still in perfect condition. If you are the party making the offer on the house. John: Tom: John: Tom: Tom. Are you finally ready to sell it? Yes. Example 1 Tom had always admired John’s 1861 Confederate rifle. because if the company does not provide relocation benefits. A person who has to sell her home because her company is relocating her. 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. 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. at some point.000. I think so. right? John: Sure. you know. I’ll have to think about that. what the other party’s desired outcome is. John assured Tom that this would never happen. I guess I couldn’t take less than $20. and told John several times to let him know if he ever wanted to get rid of it.
but then he will be happy to retire.) Tom: John. has begun negotiations to sell his firm to BigManu Company. Rick needs to remain president of the company for the next two years. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years. Example 2 Rick. I’ve been thinking about your offer. fearing that this will put all of his employees out of work. and we’re committed to keeping it open as a major division of our company. John: Well. (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. However. if you could come up a little—say $18. parties to a negotiation are not likely to reach agreement. I don’t think I can go higher than $18. When Tom found out why John decided to sell his rifle.Tom: Okay. BigManu: Rick. Was Tom interested? Tom declined. Tom: Okay. The sale price for the company has not yet been agreed to. but I could get the money to you right away. let’s do it. Well.000.500—we’d have a deal. the owner of a small manufacturing company. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. Tom now felt comfortable negotiating the price. it made the negotiations easier. we 18 50 Practical Negotiation Tactics .500 had an 1861 for sale. we really want to buy your company. but thought this might explain John’s sudden interest in selling the rifle. Without some trust. let me think about it and I’ll get back to you. Conclusion Tom entered into the negotiations suspicious of John’s motives. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position. No longer worried about John’s motives. and now the two-year requirement has become a stumbling block in the negotiations.
What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. Without this commitment. I need to give them some sense of comfort if this deal goes through. and we think it’s an odd request anyway. We still can’t find a way to do it. I just can’t go through with this sale. We just can’t make good operational decisions with our hands tied. The price they gave Rick was actually more than he had expected. In hopes of pushing the deal forward. Within the parameters of efficiency and effectiveness. let’s talk about the job guarantee you wanted. Rick: These people are the best at what they do. and I hired every one of these people. BigManu: You know we want you to stay on and manage this division for us. I just don’t want it to change after I’m gone. Rick: I built this business from the ground up. You’ll be in place to participate in our employment decisions. my employees will prove to you that they are uniquely able to run this place. Working as a division of your company. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. (Between negotiating sessions. Preparation 19 . you will have a say in how the employees are treated. BigManu: We just don’t see a way to give you what you want on this. 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. Let’s talk later.cannot guarantee to you that ALL of your employees will be retained for two years. and he accepted it subject to agreement on the two-year employment guarantee clause.) BigManu: Okay. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you.
Surely you’ll be able to “protect” your people if they are as good as you say.BigManu: We intend for you to stay and become a big part of our company. Conclusion By masking his real objective (giving himself two more years as president before retiring). that might work. but we won’t be completely tied to operations as they are now. This wouldn’t have anything to do with your own plans for the future. I certainly want to do all I can until then to protect my people. to tell you the truth. Rick: Well. 20 50 Practical Negotiation Tactics . I’m hoping to retire in two years. Once Rick realized that he no longer risked anything at the negotiating table by making his need known. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. Let me get back to you. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. you’ll have a guaranteed “in” to protect your people. would it? Rick: Well. Rich almost lost the deal.
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. too. (Think of the showroom tactics used by car dealers. Cybil. and so on. girls. they have the information they need at their fingertips. 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. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. and go play somewhere! Cybil: Well … Okay. it’s a deal. Make up your minds. they control the breaks and environmental factors. such as a hotel conference room. 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. (thirty minutes later) Bailey: So. Mother: Hush.) Let’s take all our Beanie Babies to my house to trade! Okay. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. I like the frog.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage. the frog is everybody’s favorite. Bailey: Cybil: Preparation 21 .
They were blamed for accepting the same deal that had been rejected only days earlier. 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. meals. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. The firm deadline was only four days away. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. having set up beds. although only ten years old. and other conveniences in the adjoining room. Team A agreed to a settlement almost identical to the one rejected days before. in their own familiar setting. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. About thirty-six hours later. Team A agreed to change the meeting place. 22 50 Practical Negotiation Tactics . When negotiations resumed in two months over another piece of property. was still going strong. not one member of Team A was chosen to return to the table. around the clock. until we have a settlement. while members of Team B were able to stay fresh.” The chief negotiator for Team B agreed. Both sides desperately needed to settle a property dispute. as long as they met in the boardroom of Team B. Team B had clearly used its home turf to gain a substantial advantage.Conclusion Bailey. The physical and emotional demands of 24-hour. After forty hours of negotiating. Team B. That’s why she wanted to go to her house. non-stop negotiations wore down the members of Team A. Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month.
” This can hold up an agreement and cost you in the end. Let’s get the guys back in who gave you estimates. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. Will is a licensed plumber. Larry: But Will. If they tell us that they either Preparation 23 .Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. I did get some estimates from plumbers. I gave you my “family” rate. Larry was thrilled. Larry: Well. Larry: Just make sure you’re comparing apples to apples. rather than give them the “advantage. I anticipated much less work. I would have charged anyone else much more. based on objective criteria (think property appraisals in real estate). Believe me. Things turned sour. After all. It was twice as high as the estimates Larry received from other plumbers before they started the project. though. and they were much lower than this. Larry had expected to pay him for his time. when Will presented Larry with his bill. and show them the actual work that got done. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. it became clear that all of those pipes had to be pulled and new ones put in. If you think that the other party knows more than you do. you are likely to resent them for it and hold out. Will: Larry. When you first told me about your project. but was shocked at the amount of the bill. This uncomfortable negotiation followed: Larry: Will. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. and he and Larry have always gotten along. about your bill. I was kind of surprised at how high it was. When we got into it.
Example 2 After Stuart was appointed to the college’s Board of Trustees. Had they actually prepared bids on the work. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . The college’s budget officer was understandably offended. because (as Will pointed out) it wasn’t an apples-to-apples comparison. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. she had been investing the college’s endowment funds for many years.disagree on the need for that work or that they would have done it for less. Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. while she wasn’t an expert. From a look at the portfolio. Budget Officer: I don’t know what your problem is. they said. I’ll revise my bill to meet the lowest estimate you get. Larry: That sounds fair. he used his financial expertise to analyze the investments of the college’s endowment fund. I certainly didn’t mean to offend you. Conclusion When the other plumbers looked at the work. they had to agree that their early estimates were low. 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. Comparing the estimates to Will’s actual costs would have been counterproductive. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. and decided to bring the matter up at a Board meeting. The estimates would have been higher than what cousin Will charged. and no one had ever questioned her performance. He was disappointed in the performance of the fund. they would have had to revise the figures.
because she did not have the background in investments necessary to trust such advice. but I think they more than offset the gains. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. Okay? Budget Officer: Okay. there might be increased risk and some expenses for commissions. Stuart: Yes. As you know. Now. Preparation 25 .were stale. 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. the college is a private institution. Budget Officer: Yes. and its resources are limited. At the end of two months. Stuart: No problem. I don’t question that they were sound at one time. I have a suggestion. considering commissions and all. I find that a more aggressive investment strategy produces a better return. but we can ask them to plan and cost out each move. but I want to be involved in the discussions with them about what we’re asking. if both of them demonstrate a similar strategy and produce better results after expenses. but such a strategy also increases risk and costs more money to administer. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. then you and I can talk about changing our investment strategy. Stuart realized that the budget officer needed very-specific “criteria” (such as the actual experience of investing the school’s endowment fund) rather than relying on an investor’s experience. but some of these stocks have really lost their value. In this situation. I don’t want you directing how they’re going to go.
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. It will cost me more than $10—about $35 per week. wash the cars. I need more money for clothes and CDs. (3) more chores. what else can I do. Example 1 Shari.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. (2) a later curfew. a sixteen-year-old who lives with her parents and three younger sisters. This strategy can build trust in the negotiation process itself. if I give you an increase. and ask the other party to add to the list. Shari: Well. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. Mother: That’s a large increase—and we just raised it last year! Shari: Well. Mother: But your allowance is based on what you earn in your weekly chores. cut the grass. Once you both agree on the list of things to be negotiated. Shari: I’m four years older than the next-oldest. and for going out with my friends. not just an allowance increase! There is: (1) a $10 increase. your little sisters will want equal treatment. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. baby-sit your sisters. has asked her mother for a $10/week increase in her allowance. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . not on what you want to spend. You can’t treat me the same! Mother: Well—so we’re talking about several issues.
was avoided. since all of their items were included as requested. and item #23 (the wellness program voucher). Now we have a package deal to propose … Preparation 27 . in the first session. The union’s chief negotiator. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). I’ll pay you $10 to babysit every Wednesday night. you get to stay out an hour later that night. Now it is time for each side to list their desired outcome for each item. The trading of items (where initial demands are discussed and agreed upon) begins. Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. Shari got the $10 she wanted and a later curfew. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. item #11 (the clothing allowance). which the other children would have requested as well. Management agrees. An allowance increase. while your Dad and I go out. if you agree to our proposals on item #3 (the paid vacation schedule). opens by proposing the list of items. Then a “win-win” solution could be determined. but unlike your sisters. And if you clean the whole house on Saturday.Shari: Right! Mother: So … I suggest no allowance increase. while the mother won a Saturday house-cleaning and a night out each week.
Then negotiations can resume on the remaining 43 items. thus removing them from the discussion table. the two sides will at this point sign and date the list of proposed items. other trade-offs are proposed and agreed to until only a few items remain.Conclusion In most labor negotiations. 28 50 Practical Negotiation Tactics .
One day. It was nice meeting you. I live a few blocks from here. and do your homework. He stopped and knocked on the door. Not even for. 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. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. time of day. thanks. my name is Bob Hillard. Would you possibly be interested in selling it? No.) Preparation 29 .Tactic 6: Timing Is Everything The exact month. day. I love this car—restored it myself. Bob made it a point about once a month to go out of his way and drive by the man’s house. Hi! What can I do for you? I’ve admired your ‘63 Impala for years. he noticed a FOR SALE sign in the yard. (For the next three years. the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. As the man got out of his car. Prepare carefully. which turned out to be only a few blocks from his own house.000? No. $12. That’s a generous offer. say. on Briarwood Road. Bob followed the man home. as he left the supermarket. and general circumstances under which negotiations take place can substantially impact the outcome. One day. just out of curiosity. but money doesn’t mean anything to me at this point in my life … Well. he saw an elderly man get in his dream car and drive away.
and the vote was a 6-6 tie each time.m. I can’t take it with me. to seal the agreement at the courthouse? Sure. Conclusion While Bob did not achieve his goal during his first negotiation effort. (after a careful inspection) It’s a very nice car! I’ll give you $12.m. resulted in another 6-6 30 50 Practical Negotiation Tactics . and I promise to take good care of it. Can you come back on Monday at 10:00 a. that’s a fair price. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams. so I guess I will be selling it. Example 2 It was Sunday. for tax reasons. Can I see it? Sure. I’m moving to California to live with my daughter. Then it’s a deal? Yes.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. I’ll see you on Monday. December 31st.000. Follow me. The board members had met twice before. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. A third vote at 3:00 p. as a matter of fact. The partner organization. Well. the proposal would die at midnight. beyond which the project would have to be abandoned. if a seventh vote could not be found by the pro-agreement side. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. A majority was needed to pass the partnership agreement. had issued a deadline of December 31st.
He planned for it accordingly. Preparation 31 . in the end. during an hour break in the meeting.deadlock. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. A member of the pro-project group quickly called for a vote after the leader gave a signal. as predicted. For weeks. Both sides caucused: The leaders on each side met to negotiate a compromise.m. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years.m. The measure passed 6–5 at 5:45 p. That effort failed.. and the meeting was adjourned. Then. At 5:30 p. a member of the anti-project group left the room. timing was everything.m.m... the project had been stalled by 6–6 votes. and it worked.. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. When the meeting resumed at 4:00 p.
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Before you can do this. as well as their bargaining history and financial and political positions. or someone’s colleague or spouse? Third parties such as other buyers or governmental agencies might have to approve the agreement before it becomes final. Tactic #12: Find Common Interests can be helpful. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . you must first evaluate your needs and those of your opponent. The overall strategy chosen does not limit the use of other tactics. Tactic #43 (Nickel and Diming). Be sure you are aware of this at the beginning. Some of the tactics listed in this book are only suitable for single-session negotiations. such as a third-party negotiator. a third party can serve as a mediator (a legislative body. If you prefer to take a firm and direct approach. uncaring approach (Tactic #9: Control Your Emotions. In some cases. Are there any outside people who might influence the process. decide whether the negotiations should be continuous. such as Tactic #19 (Make a First and Best Offer). then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. as it can substantially alter the negotiations between two primary parties. Identify all outside influences and hidden agendas before you develop your strategy. if you want to begin in a friendly. Third parties sometimes have their own hidden agendas. such as a buyer and a seller or a city and its union. cooperative manner. and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). and Tactic #48 (Walk Away). or one-time-only. 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. After you have evaluated these factors. Tactic #33 (Bluff). but in practice it will likely influence the whole process. A neutral. for example. For example. might step in and help settle negotiations between a union and administration negotiators.
half-serious. and the buyer was able to completely renovate the house and still have a great deal. “Please make any offer—they are motivated!” The buyer responded. I offer half the asking price. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. The desperate owner agreed. with “All right.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. The agent explained that the seller was desperate. 34 50 Practical Negotiation Tactics . The buyer loved the location. By assuming opposing roles. His teenage sons had “trashed” the house. 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). two people on the team will be more successful because they evoke different emotions from the other side. Weeks later. but the inside was a complete turnoff. The buyer said he wasn’t interested.” The agent took the offer to the seller. the seller’s agent called the buyer about the property. For example. If there is a significant weakness in your position.
Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. but the redecorating is of little value. but quite frankly. Finally. Planning a Strategy 35 . we think $160.000 is very high. her real estate agent told her that they were probably not going to get a buyer because she is asking too much.000. but the house has increased in value. However. Anyone buying the house would want to change wall colors or add new carpets. Surely there’s some flexibility in your asking price. Buyer: We really like the house. You are not likely to get more than you request. your request must not be so low that the other party concludes that you are not negotiating in good faith. but we simply can’t take less than $160. it is likely that your opponent will. so think this through well ahead of time.000. She has had it on and off the market for the last five years. six years ago you bought it for $60. and just refuses to reduce it. First. Carol wants $160. Be realistic. but certainly not exceptional in any way. one buyer shows some interest. but not so high as to end the negotiations before they begin. Buyer: The air conditioning might have increased the value of the house. and then look at the demand from your opponent’s perspective. It’s a good neighborhood. Each time. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. And I don’t see a lot of difference in the neighborhood. Carol: We really want to sell.000. as well. with no success. The market hasn’t gone up that much in six years. If you consider the demand ridiculous. After all. Carol: Maybe not. We also think that the neighborhood has improved over the last few years. so do not underestimate what you might be able to achieve. Your demand should be high enough to give you room to compromise. Example 1 Carol has been unhappy with the house she and her husband bought six years ago.
Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. Neither Edward Bits nor Edmund Bites. The other law firm was prepared to pay $100. we are certainly interested in your request to “buy” our firm name to use in your city. the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. 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. or she has unreal expectations. We’re curious. as to how you think the name is going to benefit you. though. Inquiries to other law firms were not very helpful because in almost all of the instances. When Carol refused to budge.000. enjoying a statewide reputation for quality representation. the buyer took it as a signal that either Carol didn’t want to sell.Buyer: What if we offered you $100. In any event. but they have no idea what the value of their firm’s name might be in this nearby city. Here’s how the initial negotiations went: Partners: Well.000 offer by coming down in price at least a little. 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.000? Carol: We really can’t take less than $160. The partners are interested in selling the name.000 immediately. Example 2 The law firm of Bits & Bites was a Sioux City institution.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. were still alive. and then $10. Carol drove off a potential buyer by setting an asking price that was just too high. the founders of the firm. 36 50 Practical Negotiation Tactics .
and then 10% of your profits each year for as long as you use the name. To offer it now would be an insult. starting with the ten partners you describe. of course. I’m kind of embarrassed now. Give us some range. Let’s just pretend this didn’t happen. Yes. And we. We probably won’t be insulted. because you are in the state capital and your firm has handled a lot of high-profile political cases. Thanks so much for meeting with me. but we get to keep all of the money we’ve received up to that point. So.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. I guess this is just not something we’ll be able to pursue. I really don’t feel comfortable doing that now. you have a very solid reputation there. that’s just our initial figure. If at any time we feel that you have “harmed” our name. that you anticipate to build a very profitable law firm. we reserve the right to withdraw our permission. We should assume. then. we do. (surprised) Well. Well. we want $500. it would be impossible to create a new name out of the names of our key partners. one of these two attorneys carries the surname of the firm they are leaving. What number were you thinking about? Well. In every instance. And even though you don’t have an office in our city. because we were not even close to that number.000 initially. (concerned about loosing the opportunity) Wait. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . that is a very high number. Using the Bits & Bites name can only enhance our profitability. expect to pay for that. We weren’t really thinking about that amount of money.
since they had initiated the contact. Both parties were probably at a disadvantage. rather than negotiate. The price they were willing to pay would have indicated what the naming rights were worth. Either side could have asked for too much. 38 50 Practical Negotiation Tactics . Bits and Bites should have let the prospective firm make the first offer.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. because there was no “objective” criteria available to help them set a reasonable price. In this situation.
I want to keep those.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one.400 if the catcher and can are included. you’re really moving! I hate to see you leave. and I know how you take care of things.200! We should get $1. Andy: No. etc. threatening. we won’t need it at the new condo. Andy: I want them… Paula: Go ahead and take them. while another acts difficult. not for $1. so I’ll take it. (bad guy) and implies that his or her side will hold firm on their demands. Peggy: That’s fair. Example 1 So. 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. Peggy: I assumed they went with the mower. what’s your price? Andy: $1. I can use them. Peggy: Planning a Strategy 39 . I heard that you want to sell your riding mower. Andy and Paula: Yes. And take the leaf-catcher attachment and the gas can. Andy: No. only three years ago. Half what it cost us new. Peggy.200. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. They cost about $300. Paula: Go ahead and ride it home. I’ll go home and you can call me if you two can reach an agreement. since they are sitting out in the driveway with it. Peggy: So. Peggy: I’m hearing one thing from Paula and another from Andy. Andy and Paula. angry.
perhaps even unintentionally. And cut the training hours from 55 to 20. causing our reps to spend hours on the road. 40 50 Practical Negotiation Tactics . your account has taken too much time.000 per month is one of the highest in town.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine.000 in service calls last year alone because your damn people don’t take care of the equipment. the quality of the technicians’ work. your rate of $3.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down. firm offer if they decided to continue negotiations. And we want to change the 24-hour service response time to 48 hours. We estimated that it has cost us more than $50. Sandy. we’ve been fairly happy with your responsiveness. And we need to add a clause that holds your company responsible for machine damages. Let’s talk. we’re here to negotiate a new service agreement. Miguel: Well. Liz: But we still want to renew your contract. Miguel: But not at this ridiculous rate. For the past three years. Miguel: I’ve figured $4. You are located outside our primary service area. Sandy. Sandy: What? First of all. She realized that it put her in an impossible negotiating position. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). and your training programs. She very wisely recognized the routine and forced Andy and Paula to give her a clear.
Planning a Strategy 41 .Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. Our customer base has grown. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. I’ll stop back about 2:00 p. If not. I hope you can meet my terms. I’m afraid our relationship is over. Sandy. but Miguel’s right. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. Miguel! We’ve worked out a deal I think you can live with. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. you two? Good news. I want to keep you as a customer.m. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. Sandy. (Three hours later) I’m back. these terms will put me out of business—I’m a small 20-person operation. Sandy. even though it was far above the previous contract. Liz. with a position he knew was unreasonable. I’m going on to lunch. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Any luck. I’ll explain on the way back to the office.
Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer. made some very good purchase decisions for his small business. So. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. I have a problem with my recent bill and my billing rate. How may I help you? Hello. 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. 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. I noticed this. such as deals on computer packages and phone services.Tactic 9: Control Your Emotions Stay cool.10 a minute rate at my office location. He decided that the best approach was to act indignant when he spoke to the company representative. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. in fact. and might even harden your opponent into an unfavorable position (for you or for both of you). The fault was partly his because he did not stay on top of changes. 42 50 Practical Negotiation Tactics .00 a minute. This will put you at a distinct disadvantage from this point on. He had. 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 I recently was sold a $. because we have had a sick relative out of town and we used long distance a lot this past month. It seems that the rate you are charging me on my home phone is $1.
and I also realize that if I had examined my bill closely. Had you brought this to our attention before. I realize that that might be the rate I started paying when I first took your service over eight years ago. It hasn’t been increased at any time. we certainly would have discussed your options. 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 would have known I was paying too much. how would anyone who might only have residential service even know to ask? Well. to begin now. of course it is not always possible to give existing customers some of the “offers” we have out. I would think you would have given me the best rate you offer new customers. Well.10 per minute rate on your long-distance service. Mike. 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. But as a very good customer of yours. but this was quite a shock. But I am able to offer you a $.I expected the bill to be higher than usual. (beginning to sound irritated. Customer representative: Let me pull up your account. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 .
Wait—I’ll get my supervisor. The best we can do is fix the rate for the future. I am. and I should be treated with more respect! I’m sorry. and I want to speak to someone in authority so I can terminate my service. I would hope that you would credit my account for this better rate for past service. We certainly don’t want to lose you as a customer. I … (interrupting and in a stern. 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. which should rightly be $50. don’t think this is directed at you personally. however. If you can’t get me someone to talk to. but I can’t do that. controlled voice) I need to talk to someone who can do it immediately.Mike: I would imagine so. but I am very angry with Over-the-Air Company. she kept Mike as a residential customer as well as a business customer.10 per minute. a long-time customer of your company. But I’m looking at a $500 longdistance bill. In doing so. there’s no reason for this conversation to continue. Mike’s willingness to show a measured “flare of temper” brought results. (with a much angrier tone) Madam. The latter would not have produced the desired results. strategic anger and abusive behavior. 44 50 Practical Negotiation Tactics . He was walking a thin line. after all. either. between controlled.
lesssenior employees might be at greater risk of injury because they have to handle explosives. Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. 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. 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. and it’s getting old. They will be putting the plant AND their fellow workers at risk by not being here. and you just can’t be too careful. The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. On those overtime shifts. and it’s not what we’re even talking about. The owner told the employees that he was worried that during the overtime shifts.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . Owner: Now. and that they should be asking for a fairer base wage for the work they do for you. that’s just not fair. I’ve got to have the employees with the most experience to protect this place. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. The employees’ negotiator finally decided to use “indignation” to break the stalemate. Working with fireworks is working with explosives. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. they would become dissatisfied with their pay and want their base pay increased.
Until you’re ready to talk about that.) Now. But we protect our people. In practice. sit down. 46 50 Practical Negotiation Tactics . No one who takes a job with us can be unaware of that. (He begins to walk out. But the fireworks business is a business that involves risk. the negotiator would have had to find a way back into the negotiations without losing ground. That’s all. The safety of the plant demands it! (standing up to leave) This is just ridiculous. Either they are properly protected. Then you can’t have it both ways. What if we were to agree that the senior employees could refuse half of the overtime offered to them. he became more reasonable. Sit down. or they’re not. or they’re not. The negotiator was also running a risk with his flare of temper. I’m not coming back. All I’m saying is that the most-senior employees have to be on the overtime shifts. either the employees are properly trained. but not all? Conclusion The owner was on shaky ground with this one. now. After the employees’ negotiator threatened to walk out.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. most of them continued to take all the overtime they could get. Had the owner let him leave. don’t be so hasty. though. not at all. You are not addressing the real issue for you: money. The end result was that the most-senior employees did win the right to refuse overtime.
with the highest bidder paying the amount to the other side in compensation for their loss. A fourth option. All the rest of the estate has been divided among the family. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. so you set a price at which you agree to buy or sell the coffee grinder. (two days later) Mary Anne: Well. since this one is in perfect shape and it was Mother’s. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. 3) They can agree to sell the object to a third party. The first party decides on a price for which he or she will either buy or sell the object to the second party. the executor of the estate. I’m willing to pay or let it go for $800. However. The second party then decides to either buy it at that price and pay the first party. a well-known negotiations professor from Harvard University.” is the recommendation of Howard Raiffa. Susan. Mike. Both sisters covet it. with winner taking all. Planning a Strategy 47 . you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). called the “Reciprocal Buy-Sell Offer.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. you’re the oldest. 2) They can flip a coin. and split the proceeds. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. I’ll give you 48 hours to decide the price. Mike: Mary Anne. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. Then Susan.
Thanks for making this last step as easy as possible.” Howard: Since in this case you are talking about a multi-million-dollar business. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. They thus were able to determine the highest price each was willing to pay for it or receive for it. and then decide how much more “emotional value” it held. to submit a sealed offer to buy/sell the business sixty days from today. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). You will both agree. After I open the bids. I suggest a slight modification to the process. I choose to buy it. I’ll pick it up tonight. Lectures on Negotiation Analysis. in writing.Susan: Mike: Well. Both sisters felt that the process enabled them to resolve the issue fairly. which will bind us to the outcome. Here is my check for $800. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. the lower bidder must agree to sell his half-interest to the higher bidder at a price that evenly splits the difference between the two bids. (sixty days later) 48 50 Practical Negotiation Tactics . Two business partners had been working together for ten years to build a successful business. Both came to Raiffa to help negotiate a settlement. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. They accepted his suggestion to use the “reciprocal buy-sell strategy.
Howard: Abe: Bobby: Abe. and we close by July 1st. and to close within ninety days. Agreed. And I will arrange financing to pay you $180 million to become sole owner. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. you agree to sell your half-interest to Bobby for $180 million. but only if they could become the sole owner. I will arrange to sell him my half-interest for $180 million. and both men had carefully estimated the market value of half the business. Conclusion Both parties wanted to keep the business. your bid is $170 million. Bobby. Planning a Strategy 49 . The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership. your bid is $190 million. Bobby was willing to pay more than Abe to remain sole owner. Abe.
and the husband felt like he saved them hundreds of dollars. Looking at these statistics. The couple decided to limit their selection to those rated “excellent.” 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. the one he wanted (one of the least-expensive) was superior. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. When he showed his wife the detailed spreadsheet. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . This approach can also be reversed: The wife in this situation is a banker. When it came to comfort. and created a spreadsheet to compare the five best-rated couches on their list.” and then argue for the frugal alternative. The husband found the dimensions of the couches in the brochures and Web sites. This strategy worked. he decided upon a strategy: First establish himself as the “dimension expert. They both expressed an interest in finding a couch that offered the most “interior” space. Based on seating capacity. He thus ended up having greater negotiating power. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. she glanced at it and immediately deferred to his opinion. the one that was the most expensive was superior.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. and forcing him or her to control the discussion of the issue. Conclusion The husband became the “expert” in this situation by doing the homework.
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 .investment decision or deal with an error in a bill.” If you spend many hours learning about Health Maintenance Organizations (HMOs). he argues that she is the expert. and should therefore handle the problem. 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. you gain an edge when negotiating a new plan for your company. 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).
Example 1 When Russ and Bill got home from school. If this was chocolate icing. and so on. particularly when things seem to be at a standstill. I also took out the garbage last week without being asked twice.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. Russ: 52 50 Practical Negotiation Tactics . These positive things are part of your goals and objectives. Usually. and I really love the banana/butternut/ sour cream frosting on this cake. I missed dessert the other night because I had to get to baseball practice. The two boys fought over the last piece of everything. Unless you can convince me otherwise. she made them share whatever it was. Be clear on what you have in common at the start. and then asked their mom for a chance to negotiate with each other. because I am so conscientious about my paper route. like we usually have. point them out at the very beginning of negotiations and refer to them throughout the process. you want to reach an agreement that is favorable to an outside party. This time. she decided to try something different. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. That simply rewards your continual squabbling. here’s what they said to her: I think I should be rewarded with the piece of cake. they saw that there was one piece of cake left over from their mom’s bridge party. They immediately began to fight over it. the last piece of cake will get thrown away. neither of you want to be embarrassed at the outcome. and neither boy was very happy. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. I wouldn’t care so much. The boys quickly huddled. you both want to complete negotiations by a certain date. When they boys returned. and their mother was tired of it.
and that’s not my favorite either. your new shop hours have caused your customers to park in our parking spaces. Now that her children are in college. Marilyn originally set her shop’s hours for 10:00 a. We realized that if we cut the cake lengthwise. This cake is white cake. That sounds like a wonderful solution. One day.m. 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. because there is no parking along the street during morning and evening rush hours. and better than a fast-food restaurant with late-night hours and a drive-through window. and I really like white cake. so these hours worked out well. Planning a Strategy 53 . I can have the part with the icing and Bill can have the part with the cake and filling. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood.m.m. and keeps it open longer so she can attract customers on their way to and from work. Residents: Marilyn. she got a visit from some of the residents. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. Customers have started to park in nearby apartment lots. and her children were in school. to 3:00 p. she opens her shop at 7:30 a. The last cake we had was chocolate cake. I helped with the bags without being asked twice. so that your customers can park on the street. We really want you to go back to your original times.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. It was the type of shop the nearby residents preferred.
and I close at 4:00 p. Lets try it. the off-street lots probably won’t be used by my customers. And we don’t think you want your customers’ cars towed. we have to be willing to tow the cars that violate it. We think they’ll be agreeable to the morning parking. Okay. and usually the car is gone by the time a tow truck shows up anyway..m. I have to convince them to come before work. and see if it works. So. But in order to keep my new customers. Between 7:30 a.m. Identifying their shared interests caused the nearby residents and the customers to reach agreement. my customers can’t park on the street. The shared parking arrangement did work out for Marilyn.00 a.m.m. and 9:00 a. if I go ahead and open the shop at 7:30 a. 54 50 Practical Negotiation Tactics . If you need to have the shop open more hours. and is probably empty in the afternoon if they haven’t gotten home yet.m. It is very costly to have cars towed. or so anyway. The parking lot used for apartment residents is probably full from 7:30– 9. Most of our residents are gone by 8:00 a. then we’ll try and accommodate you. 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. I don’t think that would be very good for business.I’m sorry this is happening. if residents haven’t left for work yet. and 9:00 a.m. I really need that extra income to stay in business. Marilyn: Conclusion Marilyn needed the extra parking. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a.. and between 4:00 p..m.m.m. and the residents needed Marilyn’s shop. and 6:00 p.? Residents: We certainly want you to stay in business here.m. let’s see what the options are. But I really am increasing my sales by being open longer hours. Do you? Marilyn: No.
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). but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. Well. A deadline can help you make the best possible agreement in the shortest amount of time. one at a time: the youngest. That will take days! I haven’t been in this house for twelve years. let’s all take a few hours to look around. We just don’t have the time … We’ve got to do this—the house is sold! Okay. Then we can sit down at this table at 3:00 p. let’s all take two hours to look around and make a list of things we might want. how should we go about dividing up the furniture and possessions? I can’t talk about it. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side. But at Planning a Strategy 55 . Well. 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. A few hours? I can’t—I’ve got to leave shortly for the drive home. the first.m. I don’t. Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. and start choosing things.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. etc. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. Example 1 Four adult children have gathered at the home of their recently deceased mother.
Sue: Mary: Jenny: 5:00 p. this is December 29. Allan: Let me confer with the city attorneys. Okay. being the oldest. Sue. can sell or give away what is left. Agreed. Example 2 Allan: As the negotiating team for the city.m. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. your attorneys know the tax laws. and I appreciate your interest in the historic structure. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. we all leave. All of us must come back before Saturday to take what is ours—agreed? Okay. if I cannot carry a negotiated and signed deal to my board by noon on December 31. Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. David: I understand your concern. December 31. However.. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight. 56 50 Practical Negotiation Tactics . if we are not finished. And besides.
Planning a Strategy 57 . Conclusion Knowing the external deadline gave David a significant negotiating edge.Allan: (One hour later. Obviously. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Let’s continue. we can’t get the reports we wanted in 48 hours. and I don’t like it.) I understand the December 31 deadline.
don’t get mad. while watching TV. but that was actually a different workbook. but remember that both sides have weaknesses. Now. We had one at the beginning of the semester that we were using pretty often. His mother disapproves of his study habits. One day mine disappeared. The objective is to negotiate from a position of strength. Did you buy it? Jason: Yes. He knows that a D will mean that he will have to change the way he studies. But don’t lose it again. Mom: I gave you money to buy a workbook a few weeks ago. first-quarter grades are coming out at the end of the week. Then the teacher went back to the first one. and one of the ways to do that is to reveal a weakness at the beginning. Have a clear goal in mind AND all the information you need to make your points. as well as strengths. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. and we used it a couple of times. I’ll need to buy it again. and this usually means having all the right information. Control the use of the information.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. He decided to preempt the discussion in order to make the best deal. so he was able to prevail upon her to let him continue. and I missed some assignments. and Jason knows he is getting a D in Spanish. but his grades are good. I bought the second one. 58 50 Practical Negotiation Tactics . Mom: What’s that? Jason: A few weeks ago I lost my workbook. Unfortunately. and you can neutralize its effect on the negotiations. we need to talk. before your opponent tries to catch you off-guard. I’ll give you money for it. as well as those of the other side. but I have a problem in my Spanish class. Jason: Mom. There will be times during a negotiation when you will want to catch your opponent off-guard. Mom: All right.
I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. I don’t think you’re taking your schoolwork seriously enough. Conclusion All of Jason’s grades did improve over the next quarter. but I think you do need to change your study habits. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. I think I can do that. His explanation made sense. he was able to continue to study the way he wanted to. my study habits are okay. But that Spanish grade needs to come up to a B!! Jason: Okay. then I’ll agree to make changes. Its owners found out that at least three other buyers had been in contact with Jane. Although his Spanish grade was only a C+. or borderline B. It’s because I didn’t have the book. Mom: Well. All of my other classes are A. she trusted it more. I’m sorry. so there’s no reason to think I need to change my study habits. Thanks.Jason: Another thing. but all three deals Planning a Strategy 59 . and since he offered her the information up front. English. Obviously. Since I missed some assignments. Example 2 Jane once owned a piece of property she wanted very much to sell. The location was ideal for a convenience store or a fast-food restaurant.(maybe C+). Jason: Spanish is just one class. all right. Mom: Well. And those are hard classes—Algebra. 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. Mom. Environmental Science. The work I did turn in was fine. If I don’t pull the D up to a C or better. Pizza Boy was interested and had even made inquiries about the property. And I know I have to be better about getting in all of my assignments. and the D is directly related to my losing the book. B. I’ll give you more time.
we’re not interested in neighborhood fights. Pizza Boy: Well. I’m sure. it’s only the neighbor to the right of the property who has a problem. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. however. You are a big enough corporation to withstand her objections. But unlike your company. When she contacts you. Pizza Boy was prepared for her call.had fallen through. the other interested buyers already have businesses in the neighborhood. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. They decided not to fight a disgruntled neighbor. Jane: Oh. she will want you to think it’s the whole neighborhood. The real problem. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. since they were well aware of the negatives. she started her campaign to keep them from closing the deal. I know. A tentative deal was signed. there were no unpleasant surprises to stop the deal. Furthermore. though. Pizza Boy: Well. either. Pizza Boy: We’ve checked the property out. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. I think you’ll find that this is only one person. When the neighbor heard about the new buyer. really. Actually. What are you asking for the property? Conclusion Jane told them her asking price. I’m very happy you’re interested in my property. and was able to politely ignore her. and it’s zoned for commercial use. This is how the negotiations went: Jane: Pizza Boy. however. 60 50 Practical Negotiation Tactics . which was way below the price they were actually willing to pay. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. What are her grounds for complaining? Jane: She doesn’t have any. let’s assume that you are right.
500) M $21.750) Target Point ($24.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. for example.500) Resistance Point ($25.000 Buyer Initial Offer ($21. Adapted from Labor Relations and Collective Bargaining. 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. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse.000 22 23 24 25 26 27 Initial Offer $28. as illustrated in the following figure: Seller Resistance Point ($22.000) Settlement Range ($22. such as proposing to continue at the current rate or price. “Distributive” bargaining (“win-lose” or “zero sum”) is used. 2: Distributive Bargaining Process. Another common strategy is to start with the status quo. (2004). 190–192. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side.500) Fig. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range. None is as important as the first one. The negotiator firmly states that it is their best offer in an attempt to gain a nice. quick agreement. This is a practical starting point that will not anger the other side (and might even be expected). Exchanging Initial Offers 61 .750–$25. 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. Carrell and Christina Heavrin. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).000) Target Point ($23. by Michael R.
these points have set the outer limits. 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). if the buyer’s initial offer was $25. See Tactic #18: Agree on Something As Soon As You Can. the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. and is the range in which most negotiations actually occur. it is termed the settlement point – not the “right price” or “fair price. After initial offers are exchanged. thus starting out on a positive note. In the example. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items.” but the settlement price. the process quickly narrows to the range between the initial offers. 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. Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. When the two parties agree to a price within the range.000 and $28. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position.In this example.000. The settlement range is the distance between the resistance points. 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). 62 50 Practical Negotiation Tactics . usually. each initial offer ($21.000) is reasonable. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. thus producing a true “win-win” negotiation. A target point is the desired settlement value a party has set as a goal when negotiations begin. the other side does not agree to this value).
a caucus can be used as a break to calm the situation down. Her mom and dad had already talked about it privately. so her parents sat down with their daughter to discuss the details. Example 1 Shelly’s “Sweet Sixteen” party was coming up. A caucus gives you an opportunity to work out problems with your own team in private. Mom: We’re planning on having your party here on Saturday night. 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. There are many ways to use this strategy.–10:00 p. 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. so we’ll have the party from 7:00 p. You can invite up to 20 of your friends. the negotiations got out of hand when Shelly’s dad forgot what had been decided.m. We don’t want it to be a late evening. 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 is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. If the team is feeling pressure to concede on certain items. Unfortunately. without revealing their ideas to the other side. Shelly: Twenty friends? You’re kidding! I’ve just started on my list. Shelly. If the negotiations are heated. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. and I already have 25 names. If the negotiations have suddenly gone in an unanticipated direction. We’ll just have chips and soda.m. and presumably had an agreement.Tactic 15: Caucus If you are part of a negotiating team. because it might disturb the neighbors. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. To do so in front of your opponent would obviously undermine your team’s position in the negotiations. If negotiations seem stalled.
And they can’t go home at 10:00 p. (excited) That would be so cool. I guess the VFW will work.” They would never expect a party to end before midnight. It’s special!!! Well.m. (with some irritation) I’m not sure. Mom! This is my “Sweet Sixteen” party. (During the caucus.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. I’m sure we can ask them to tone it down a little. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. Jerry from down the street is in a really good band that all of the crowd likes. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. I think the band would be fine. okay. Time out! Dad.—that’s so “baby. Shelly. we could rent the VFW hall. Actually. alone. and then the number of kids won’t matter. We could play records and you guys could dance. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. In fact. We’ll get a band—everyone does. Dad. Oh. we’ll call you when we’re ready. And midnight is definitely too late. That would be great! It would keep everyone entertained. we need to talk. That sounds like too many for here at the house. I think we can handle a few more kids—how about 35? And midnight sounds okay. Your dad and I already talked about this and agreed that 20 guests would be the limit.
m.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. please!! 11:00 p. Your mom and I agree—11:00 p. When they called Shelly back in. we will be better able to chaperone. midnight. but we’ll schedule the party for 8:00 p. Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. Example 2 The contract negotiations between the company and the union had been going on for days. Okay. and we will need to approve the list.m. causing them to lose control and make compromises they hadn’t intended to make. That’s so lame. And we’re serving chips and sodas. A DJ? I guess that’s okay. sorry. Does that mean no presents. can’t we? No band. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening.m. too? No way!! I want presents!! Conclusion In spite of their prior planning. and not a huge production. and you can invite more friends. but no Sweet Sixteen birthday party decorations. But you are limited to 40. but your dad and I agree on getting a DJ to play. Dad. Agreed.) Okay. we’re going to rent the VFW hall. But we can have the band. is for little kids!! No. her mom presented the revised proposal. this mom-and-dad negotiating team became unglued during the negotiations. All right. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . to 11:00 p.m. That way.
Union: (angrily) I’m not presenting this proposal to my people. Union negotiator #2: Please—just a moment outside. it’s a good proposal. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. The company’s negotiator didn’t recognize the misunderstanding. The union’s lead negotiator misunderstood the proposal. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. What is this. many will want to use it for their children’s education. A lot of employees have spouses who can get health insurance coverage through their work. I’m just saying that tuition benefits are sometimes a good substitute for health insurance. 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. With the cost of college educations so high. and the following conversation occurred. 66 50 Practical Negotiation Tactics . The tuition benefits will encourage the workers to be prepared for new job opportunities. Tuition in place of health insurances? They’ll think I’ve lost my mind. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members.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.
(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. Now. the parties returned to the room. Exchanging Initial Offers 67 .) I’m sorry. I thought that the contract would cover one or the other for everyone. Negotiator #1 regained his footing. we’ll be back in 5 minutes. and the parties were able to complete their negotiations. and I apologize for explaining it poorly.Union: Union: Company: Okay. I think that what you’re proposing is a really good idea. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. Good. let’s move on.
Here’s how it works: Party A exchanges the item for something of true value. you don’t want your opponent to know what these things are. this conversation takes place: Hobbs: Yes. we’ve got expenses and we need to make some profit. Salesman: Well. At a point late in the negotiations. it’s a great car and a fair deal. when the two sides are only a few dollars apart. but in reality.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.” Throwaway items are those things that hold little or no value to you. But for this price. but the key to making it work is to include the throwaways in an initial list of demands OR add it in at a strategic time. Mr. but he makes a mental note to use color as a “throwaway” item. Example 1 The buyer. so be sure you present them in a way that suggests importance. and noticed that none of the vehicles have a green exterior. you are making $200 profit over the true dealer’s cost. but … Salesman: But what? Hobbs: Well. Hobbs. A has gained something of true value and given up nothing he values in return. However. Salesman: Let me talk to my manager. Hobbs: Yes. He doesn’t really care about the color of the new vehicle. It is a useful tactic in any negotiations. according to the Consumer Reports listing of the cost of the vehicle.” Party B thinks that A has sacrificed one important objective to gain another. I can go to another dealer and get a green exterior—the color I like best. I know. not revealing that the item exchanged is a “throwaway. according to my figures. quickly checked the dealer’s inventory of sport utility vehicles in stock. I’ll go get him. (Salesman returns with manager) 68 50 Practical Negotiation Tactics .
Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). The manager was convinced enough to sacrifice a final $100 for the throwaway. and seniority will be used to determine who gets to choose the first day. Conclusion Mr. The days in question are: Exchanging Initial Offers 69 . The three are sitting at a lunch table to discuss the schedule. Example 2 The office supervisor told the three internal sales representatives (Jenny. Miguel. I’ll take the red one for $100 less. Employees will be paid time-and-a half for each of these days. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years.. All three employees must agree to the schedule. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. At the very end of the negotiations. 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 ... Then we have a deal.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal.no it’s not. Hobbs successfully chose color as a throwaway item.
December 30. and each chooses their days to work: Carolyn: December 27. December 26. 26. 2 In the first round of negotiation. January 1. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. December 31 Miguel: November 25. 70 50 Practical Negotiation Tactics . 26 Miguel: November 25. 30. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. She would actually prefer to work the extra days and get paid time-and-a half. 30. 31 January 1. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. December 27. January 2 None of the three are totally happy with the results. 24. This would allow Jenny and Miguel to each work only two days. 27. but that is a secondary consideration.November 25 (the day after Thanksgiving) December 23. in exchange for giving up earlier choices due to seniority. They have decided to start over. She proposes to work five days. A second and third round produced the following allocation: Jenny: December 23. 31. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. each made a first choice of days they will work. January 1 Carolyn: December 24. 2 Jenny: December 23. She got what she wanted by giving up something she did not value: the two other days. They agree. if they let her choose the two days she will be off and the five days she will work. They all agreed to their schedules.
the antiques. can indicate that something you think is minor is really a major concern to your opponent. and the stock and distribute the proceeds. When the girls decided it was time to talk about the estate. 300 shares of stock in a pharmaceutical company. for example. we need to sell the house. Anne: As I see it. they met at the house. it is often helpful to package the items in distinct groups and then deal with each package separately.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. The house and much of the furniture has been in the Exchanging Initial Offers 71 . but I’d like to talk about the house and the furniture. along with the cash. and a collection of antique furniture. realizing that the total cost of a deal might make or break the agreement. Example 1 When their mother died at age 82. A reluctance to include one particular financial item with other financial issues. 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. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. In addition. were faced with the task of selling the house and disposing of their mom’s personal belongings.000 with no mortgage on it.000. Autumn and Angela. For example. The estate’s assets included a checking and savings account totaling $450. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. a house valued at $250. one might package all of the financial issues in one group and negotiate on that package as one issue. their mom left specific pieces of jewelry and art in the will to each of the girls. three ways. 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. Anne and her sisters.
we will have a more valuable asset. it’s a magnet for vandals. Anne: Okay. Autumn: I think its awfully soon to be making these kinds of decisions.” She gave those things to us. So we agree: We’ll leave $30. we’ll discuss again what happens to the house and the antiques. I’d like it all to stay in the family. and if we wait a couple of years. Frankly. so I will be able to keep tabs on it. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. 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. Mother was born here and grew up here. We’ll split the stock three ways. we can sell ours. Anne: But that means we have to continue to take care of the house and its contents. I’d really be interested in talking a trade for some of them. There was a reason why she gave us what she did. What would you think about agreeing today to distribute the cash and stock three ways. I’d like to talk about the art works Mom left each of us. And we’ll fix the house up. It’s a buyer’s market now. If Angela wants to hold on to her stock. If we want. and letting everything else wait for another discussion. Why don’t we leave some of the cash in the bank. Autumn: Sounds good to me. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics .family for years. don’t you think? Angela: Maybe. Angela: Now’s not a good time to sell either the stock or the house and antiques. In fact. she’s free to do so. but the operative word is “give. With no one living here. and now that we have them. Soon.000 in the bank and distribute the remainder three ways. Angela: I live close by. we’re really free to do with them what we want. and use it to fix the house up? Then when we make a decision. we’d get a lot more for them.
). and the assignment of the limited number of parking spaces. Angela: That’s fine. sick.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. Employees: We’ve got a lot of items to cover. May I suggest that we divide the items into three areas. the jewelry. health benefits. The following tasks needed to be a accomplished: establishing basic pay schedules. what kind of paid leaves there will be (personal. The third: Ben- Exchanging Initial Offers 73 . deciding whether there would be annual wage increases as well as merit increases. Anne: Same with me. including benefits for partners in non-traditional relationships. and the art works—will be more difficult. etc. but I’m making no commitment to trade. the antiques. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. The second: working conditions (work schedules and promotional opportunities). vacation. Several issues also needed to be addressed: the ability of employees to move up through the organization. and establishing a work schedule to accommodate evening and weekend clients. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. tuition benefits. The negotiations on the other items—the house. funeral. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues).
tuition benefits. 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. Also. we are an agency supported generally by public funding. 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. the paid leave categories are pretty clearly defined. 74 50 Practical Negotiation Tactics . so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. Later negotiations were difficult. 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. because they’re really an incentive for better performance. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. to be honest with you. Employees: Okay. Executive Director: Well. Employees: I’m surprised that you would take merit increases out of a general discussion of wages. that makes sense. Executive Director: I think it’s a good idea to group items together.efits (health insurance. I would include that under the Working Conditions category. Wages should not include merit pay raises. paid leave times. So I’d like to see us get through the wage issues quickly and then move on. Executive Director: Sounds like a good agenda. and the parking spaces). I think it also makes sense to include tuition benefits in the Working Conditions category. but the parties were able to come to agreement because the wage issue had been resolved. but I’d change your list. Let’s get started.
Example 1 Tim and Kathy. You signed those papers. and she agreed. You can also make an effort to agree on something your opponent offers early in the negotiations. It indicates to your opponent that you are a reasonable negotiator. Their “property division” was mostly about dividing their debts. Tim worried that he would be stuck with all of the debt. after a brief marriage. no matter how insignificant. and might not even be able to keep the house. and that you are entering into the negotiations with the intent to reach agreement. Now. They had also furnished their house on credit. The discussion might become very heated. Kathy’s first job paid more than Tim’s because she had a graduate degree. without suggesting any changes or modifications. rather than disposing of assets. It was her idea to buy the house and go into debt to furnish it. Kathy borrowed more money to go to graduate school full-time. An initial agreement. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. and both have good jobs. because Tim felt that Kathy had taken advantage of him during the marriage. They have no children. are divorcing. They were in the middle of buying a house. The couple hoped to do the divorce without involving lawyers in order to save money. too. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. with her promotion sending her out of town. Tim: You might be leaving 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. Exchanging Initial Offers 75 . They met and married in college. Tim began working right after graduation. sets the stage for mutual respect and communication. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. Kathy was asked by her employer to relocate to another city.
Kathy: Hey. Okay. Frankly. I can hardly argue with that. yes. and he could pay it in annual installments over a five-year period. I don’t intend to “stick” you with anything. I got my convertible. we would have paid down our school loans more. hold on. as you remember. a wholesale art dealer. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. Kathy: I suppose we should look at the school loans next. Tim: Well. as long as the cost was approximately the same. and XYZ Co.. Kathy: Now. The monthly payments are about the same. When we bought them two years ago. Example 2 ABC Company. I think that makes sense. an art gallery. What do you want to do about them? Conclusion Having agreed to two items very quickly. The first thing I’d like to talk about is what we are going to do about the cars. 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. They also agreed that Tim wouldn’t have to pay her that amount for five years. Tim: Okay. ABC usually uses UPS 76 50 Practical Negotiation Tactics . about the house and furnishings. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. I think it only fair that I take over repayment of all the school loans. and you got your sports car. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. If both of us had been working the year I went to graduate school. 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.
However. The other times this happened. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. 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. ABC’s position was that the artwork was fine when it left their location. ABC refused to pay WeCanShipArt until it received payment from XYZ. XYZ decided to cancel the promotional sale that was to start on Wednesday. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. and arrived on time and apparently in good condition. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. and began preparing to return all of the artwork to ABC. They arrived right before the holiday weekend began. it was obvious that the art in one of the boxes had suffered considerable water damage. XYZ: ABC: Exchanging Initial Offers 77 . water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area. We’ll expect you to pay for the 12 works that will be in your show. 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.to ship artwork. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. when the boxes were opened on Monday. but only if you let us ship it UPS. and the boxes showed no external damage. XYZ’s manager failed to open the boxes or remove the artworks. ABC: Before we begin. The artworks filled four boxes. Unfortunately. There was no indication that the gallery’s electricity had gone out over the weekend. or else the box was damaged in XYZ’s warehouse. XYZ contacted ABC immediately. and we will continue to discuss who is liable for the three water-damaged works. You can get the three new artworks here so that we can hold the sale as scheduled? Yes.
XYZ: Okay.m. regardless of where the original three artworks were damaged. I can’t see how I can refuse that. 78 50 Practical Negotiation Tactics . And we’ll eat the cost of shipping. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. Now. They also agreed that if the investigations are not conclusive. and if word gets out that you think it was. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem.XYZ: Agreed. ABC: Well. WeCanShipArt: Wait a minute. You can’t just ignore us. If we don’t make the deadline. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. they will split the cost of the three damaged pieces three ways. Having reached an amiable solution to the immediate problem. that’s okay with me if it’s okay with XYZ. generated a like offer from WeCanShipArt and a reasonable response from XYZ. The artwork was not damaged while in our control. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. at its financial risk. we’re ruined. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged.
We plan to put an ad in the paper next week. 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. Okay? No quibbling. we paid $5. Exchanging Initial Offers 79 . Why don’t you give me a price? Colleen: Oh. Ann: Thanks! We really need one. I don’t want to quibble. Ann: Well.000 for it six years ago. we’ll sell it to you. Jeff spends many hours mowing the yard every week. no hard feelings either way. period. What do you want for it? Colleen: Well. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. and it came with the bush hog and the leaf pick-up. but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. we plan on selling our Ford tractor when we move.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. 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. Example 1 Colleen: Ann. but if you’re interested. Ann: That sounds great! I don’t want this to affect our friendship. You must mean what you say and be prepared to walk away from an unacceptable offer. and even more hours in the fall picking up leaves. I know you and Jeff said you’d like one because you have about five acres. The “first and best” tactic enabled them to settle the matter easily. I don’t have any idea.
I want the job. I’ll either accept it or reject it. I’ll discuss it with my wife and get back to you in 48 hours. So. but we have internal budget considerations and we must consider equity with other employees. Archie: Thanks.Example 2 Archie: Well. except salary. Here it is. (three days later) Vernon: Archie. He also started the job with a positive working relationship with Vernon. I came up with the best salary offer I can make. how about you making your first salary offer your best one. no questions asked. Conclusion Archie accepted the job offer. I don’t like negotiating over salary either. I think we have agreed to all aspects of the job offer. who admired the way Archie negotiated his starting salary. and you know my current salary. but I don’t want to start off in a new job by negotiating with my boss! So. 80 50 Practical Negotiation Tactics . We want you. and I’ll take 48 hours to consider it. I’ll get back to you in three days. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. Okay? Vernon: That sounds good. I expect a fair increase. as we agreed. on this slip of paper.
we’re all meeting at Donna’s so we can share a limousine. He and his date had decided that as long as they could join their friends for breakfast after the prom. since Sally is going away to college next year.m. look for indications from your opponent as to what he or she believes is their best position.” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. Example 1 Kevin. Posturing is indeed “acting. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. we’re not going to be dating exclusively after this summer. and in a favorable light. you only have one Senior Prom in your life. Present your position and demands as if yours is the only logical position. This is called posturing—presenting your position strongly and completely. was dating a senior.) During the posturing phase. so he knew that he would have to sell them very quickly. First. but he figured “all night” was relative. I’m the only junior in the crowd. and then to breakfast at “Timothy’s. First we’re going to dinner. Kevin: Mom and Dad. you know that Sally is really looking forward to this. 17 years old and a junior in high school. Fourth. a 4:00 a. (Once negotiations get underway.m. and ignore or deny any weaknesses in it.” As you know. Sally’s Senior Prom is coming up. so the prom is a pretty big deal to both of us. He knew his parents would not agree to let him stay out all night. Kevin had “negotiated” with his parents before. you will probably have to modify some of your positions if you are to reach agreement. curfew would be okay. His girl friend’s Senior Prom was coming up and Kevin obviously wanted to stay out beyond his usual curfew time of 1:00 a. and we’ve made a lot of plans with our friends that I need to talk to you about.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations. It might be your only opportunity to explain your position without interruption. Third. Second. then the prom. Exchanging Initial Offers 81 .
happy about your plans to use a limousine so you kids aren’t driving. Sally’s parents trust us and have already said yes to her. I don’t drink or do drugs.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. Also. you and Sally need to call it a night (or really a morning). but it should not be oversold. but because the owner’s daughter goes to Sally’s school. for sure. and the crowd we hang with doesn’t either. From where we sit.or drug-free. I’ve never missed my curfew. And. I think I ought to be able to stay out all night. Donna’s parents are not as strict as they could be when a bunch of you are there. we’ll have to get in our car and drive home very early in the morning. You realize that this could be as late as 4:00 a. but to use that as a reason to stay overnight doesn’t make sense. And if we don’t spend the night. Yes. Fifth. 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. this prom is a one-night thing—a dance that is dressier than you’re used to. so there will be plenty of chaperoning. We think that after the breakfast. remember that when you started dating Sally and hanging out with an older crowd. That’s asking us to believe a lot. Things can happen on a night like that that adversely affect you for the rest of your life. Donna’s parents will be there. I know you trust me and that I’ve earned the trust. I believe you can pay a little more and have the limousine bring you both home. the limousine will take us back to Donna’s house to spend the night. 82 50 Practical Negotiation Tactics . However. yes. of course. you have been fairly good about making your curfew—most of the time. they will be open for the Prom crowd only. Second. We’ve heard that they allow kids to drink. So. Finally. That’s the deal then? Okay. which could be dangerous. we told you that we would not be changing our rules to accommodate that older group. We’re just not convinced that your entire group has been alcohol. We are. we know. and we’re just not happy about that. You make some good points.m.
other companies have received incentives and Tencro certainly wants all it can get. Tencro approached the state’s Economic Development Officer. Example 2 Tencro Company decided to modernize and expand its business.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. Tencro is not going to leave the state. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. because his parents could not disagree with such wellthought-out ideas. Tencro has approached the state’s Office for Business Incentives to see what. we’re of course interested in keeping you here. we’d be adding at least 500 new jobs. we are one of the largest employers in this county. With 800 employees. The company approached other states to see what incentives they might offer Tencro to locate in their state. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. and had this conversation: Tencro: We really want to keep our company here and expand it. and a new. Also. If we can expand here. EDO: Well. It currently employs 800 people. but there are limited options available. Nevertheless. our Exchanging Initial Offers 83 . regardless of the incentives. the state can do to help the company expand and rebuild. Tencro: Let me just remind you of what our company means to this state. We need to find out what you’re willing to do to keep us here. if anything. The assembly plant is out-of-date. but was disappointed to learn that they offer very few incentives. one-floor operation would be very profitable.m. but it could easily add another 500 if it had the space on its assembly line. The spin-off business from our operations is huge. but we’re getting a lot of interest from other states willing to help us relocate. and it does not really need any help.
We need a rebate on the local income taxes to help pay off the loan to build our new building. And we’ve been offered land practically free in the neighboring state. And. etc.employees pump money into the economy by buying houses and cars. paying taxes. so we’d have to have it free here. and traffic signals.. now that the economy has improved. Certainly. That might involve the state building housing for them at a reduced cost and providing them with some retraining. We 84 50 Practical Negotiation Tactics . There are more residents in the state demanding more public services: road improvements. and we’ve had to divert funds from business incentive programs over to basic services. or else it will not be cost-effective for us to stay here. We do want you to expand your plant. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant. additional police. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. Also. We need certain incentives. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. EDO: Well. and we are willing to offer some training dollars for the new workers. We need help in the cost of attracting and training the new 500 employees. if the new location is at the local industrial park. We can’t possibly give it away to other companies coming in behind them. schools. we will need the two-lane entrance expanded to four lanes. 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. EDO: The state has very limited resources to pay for economic development incentives. while we value your company as a long-time corporate citizen. etc.
Exchanging Initial Offers 85 . but for the fact that each party did its homework and was aware of the true facts. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. Tencro was able to pay off the borrowed money in half the time. However. Tencro bought land in the industrial park. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. The new set-up was so profitable. we’re just not in a position to offer more than that at this time.agree that the road into the industrial park must be widened and a traffic light installed at our expense. and hired 500 new employees. EDO: Get back to us as soon as you can. the training and the new road improvements were all the incentives offered to Tencro. let us go back and take another look at our options. borrowed money for the new building. Other than that. Future negotiations continued. Tencro: Well.
The sellers must be willing to come down a few thousand … Sue: Well. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. before someone else does. 2) Start out with an old number. such as last year’s price.000 three years ago). offer $150. because you have settled quickly. at minimum cost. of course. never give them their asking price. but you feel cursed because you gave away too much. which can be very useful). 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. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure. They found one they both like that lists for $325. Their realtor told them that it sold for $290.000 this year.000. Jay: No.000—what they paid for it.000. or 3) Make an unrealistic offer (i. The other party will probably come back with an equally ridiculous offer. We don’t know how anxious they are to sell or if they know the market. and that two similar ones on the same street sold for $330.Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.e. 86 50 Practical Negotiation Tactics .000 and $337.000 for a house that sold for $185. Sue: Let’s offer $325. then $320. is the most (or least) the other side will accept. Jay: No. think things through before you make or accept the first offer. Avoid giving away too much at the outset.) To prevent this from happening.” (You have won a settlement. thus requiring greater concessions on both sides. and you cannot withdraw it in good faith.” The perfect first offer.. particularly if you don’t know the other party’s “settlement range. Let’s low-ball them and offer $290.000. and houses in this area sell fast.000 two years ago. That’s a fair price.
realizing they offered too much. Exchanging Initial Offers 87 . Both parties felt that they made a good deal. Lyle Foxworthy. was very impressed with their presentation. That’s an insult! Jay: Well. they had offered $325. The buyers were very motivated to sell.) Bob: I’d do it for $3. the company president.000. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. the sellers obviously would have accepted and Jay and Sue. then let them make a counteroffer. I can’t tell our realtor $290. (the next day …) Jay: They made us a counteroffer of $307. since they had already bought another house. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer.500—half the difference! Sue: Great. and the offer was based on fact: the prior negotiated price. Give us your lowest price.000. as requested by the human resource director.000 total. Sue: Then you do it. Frank: Me too. They outlined how they would develop a new employee performance-appraisal system.000 for each of us—$6. but who knows what they are planning on offering. (Bob and Frank meet privately to discuss the situation. as Sue had first suggested.Sue: Don’t be crazy. If. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company.
Lyle: Okay.000.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. and it would not apply. but we know you must have an amount budgeted for this and we are willing to do it for that amount. but we can’t pay more than $18. and you two come highly recommended.000) their minimum price of $6. We’ve waited long enough. 88 50 Practical Negotiation Tactics . 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. Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer. I’m out of time. Bob: That’s fair. We’ll do the job. They also ended up getting three times ($18. That is all that’s left in this year’s training budget.000.) Lyle: Okay. What’s the cost? Bob: We want the job.
labor negotiators. and do not flatly reject it because it is not your offer. in fact. seeing no common ground. because if you do not at least appear to be flexible. be enlarged (see Tactic #27: Expanding the Pie). One or more parts might be acceptable or indicate movement from their previous positions. and attorneys use tried and true tactics in giving and receiving offers. is likely to pull away from the table. 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. which would most likely weaken their position (see Tactic #26: Keeping Secrets). what appears to be an outer limit of the settlement range when the process starts can.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. do not dismiss it because it is not all you want. Experienced negotiators seldom reveal their exact priorities and objectives. Instead. Expect that the “total pie” will be different from what it was at the outset. When the other party makes an offer. 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. Also. which is often the case. In some negotiation situations. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives). the other party. T Making Counteroffers (The “Give and Take”) 89 . It has often been said that the key to negotiations is to be flexible (see Tactic #25). Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. Skilled negotiators such as salespeople. but possibly of different values to your opponent. carefully evaluate an opponent’s offer. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining.
The week he would be home would be the first week of school for Sydney.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. Example 1 Jerry. Let’s see what we can work out. Proposing only one solution to a problem. In mid-June. gives your opponent little maneuvering room and might even prolong or damage the negotiations. what say you. Jerry will be here. it looks like we can’t really plan a vacation for all four of us. while it may be your best option. Here’s the discussion that followed: Mom: Well. 19. finished his freshman year of high school at the beginning of June. so you can go without me. I don’t want to give up on a family vacation that quickly. Dad: Wait a minute. Jerry had already started his summer job. completed his first year of college and came home for the summer around the middle of May. His brother Sydney. 15. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. their parents began discussing a family summer vacation. and I try to get to the South Carolina beach for a week in July? Sydney: I’m not going to the beach with my parents! I’ll just stay home. Option 1: No family vacation. except when you’re negotiating. We have four options. He planned on being home for one last week before having to pack up and go back to college. Option 2: Mom and I go before Jerry leaves on August 1. Proposing multiple ways to reach your goal can get you to the same place. Dad. 90 50 Practical Negotiation Tactics . 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. Sydney. The reciprocal opportunity to review and select among options rather than accept one (“take it or leave it”) also gives your opponent a way to win. and quicker.
By proposing numerous options. Jerry: My friends and I have plans through Saturday of that week.Option 3: Mom. but he can discharge employees for poor performance. Joe has no say in who was hired by the corporate legal office to work in his unit. Then Jerry joins us until Thursday. Mom? Mom: Let’s do it. one paralegal. we meet up with him that week for vacation. actually. you have a half-day orientation on Wednesday. when we come home. and one secretary in his litigation unit. And I miss orientation and start school the next day? Dad: That’s an option. if it’s okay with Jerry. Bob. and Carl). Sydney: Okay. Conclusion The goal was to have a family vacation. and Sydney go to South Carolina before his school starts. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. Mom: Well. If we started the vacation on a Thursday. Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school. but it should work out all right. we could return home on Thursday and still get a week’s vacation. Classes don’t start until Friday. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals. It’s not perfect. Sydney: Don’t I start school that week? I don’t want to miss school. Andrea considers Making Counteroffers (The “Give and Take”) 91 . so I won’t be able to meet up with you until Sunday. Jerry: Okay with me. me.
In the last month. however. which forced Joe to take action. 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. isn’t it? But I don’t think just moving you really solves the problem. Joe: That is certainly an option. It is to the corporation’s benefit to address that problem here and now. Joe: Come on. or you can work out a “supervision” agreement with me so that I can better monitor your performance. but it doesn’t solve the problem—nor is it the only problem. Andrea: Wait Joe. If you don’t like the way I do my job. and resents any attempt by Joe to supervise her work. You had no authority to agree to settle the Stites case without clearing it with me. we have a very big problem. 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: We’re hired for our expertise. Before you start.herself to be a professional. Andrea: You didn’t list moving to another unit as an option. rather than to put it off on someone else or for some time in the future. We have a formal procedure that you just don’t like to follow. you have a job-performance problem. It was just a comment. The attorney for the other side has agreed to give me the additional time to file it. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. To put it as bluntly as I can. I really see your options as follows: You can leave the corporation. Andrea: Well. 92 50 Practical Negotiation Tactics . Her job performance was acceptable. you know that wasn’t an okay to settle. Joe: Andrea. Andrea. she made a two glaring errors in judgment. and I don’t see why we don’t have more independence. let me say that I’m handling the missed deadline on the pleading. Joe: That’s all well and good.
rather than my staying here. It also changed her attitude about being both a professional and a team player in a corporate office. or I would advise your next supervisor to put you on a very formal approval program. lets talk to Bill about the move. in fact.Joe: That could be an option. the needs of the corporation have to come first. If that option is okay with you. If you are convinced that I have to undertake an “approval” program. improve her work performance. Andrea: Well. Joe: That’s fine with me. Believe it or not.) Making Counteroffers (The “Give and Take”) 93 . then it would save face for me if it comes with a move to another unit. (Adapted from The Mind and The Heart of the Negotiator. But in fairness to our mutual employer. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity. and propose an acceptable alternative. I want to stay with the firm. by Leigh Thompson. Andrea’s move and subsequent “approval” regime did. my goal is the same is yours: to create an environment where you can perform to your full potential. I hope we can work it out. but it would still require some change in the way you work: either a demotion.
This approach is an important tactic.). They each agreed to list the items they want and then to negotiate whether or not they will be purchased. then the contractor has lost $500 in revenue. 3) distributive items (those items for which the two parties have exactly opposite interests. Example 1 Brooks and Maureen Wilson have just finished building a new home.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. only those with polar-opposite interests that must be divided. With distributive items.000. Exchange. the fencing. In essence. 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. 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). Maureen: First. let’s see if there are any items we both want. or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. and a home theatre. (She looks over the list.500. They have a fixed amount of money—$14. one person’s gain is another’s loss—zero-sum. because it can speed up negotiations and produce a more desirable outcome.) Yes. and finally. then those which can be easily traded. Let’s see. if a buyer negotiates a $500 reduction of a contractor’s bill. They both agreed that this is the maximum they will spend on “extras” before moving in. three strategies are used. It is used only when each side has several demands. These items often involve money). Wow! We are off to a good start. 2) exchange items (those that can be easily traded off—one item for another item of equal value. Brooks: Right. For example. etc. thus making it necessary to find a middle ground on each. 94 50 Practical Negotiation Tactics . we both want the sod. that’s $9. Let’s agree to those things.
I’d like to spend some of it on lighting upgrades.# 1 Sod Item Cost $1. These are all permanent immediate needs.200 $200–$2.500 $5. Can we split it evenly? Brooks: Okay.000 $500 $1. which I’d like to keep in the bank. which takes another $3.500 $2.000! Brooks: Good.000 $3. that makes sense.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. Maureen: No.000 $2.000 $5.500 $500 $1. and we both get things we want.500 left.000 $1. Making Counteroffers (The “Give and Take”) 95 . I’ll trade your sidewalk and trees for my whirlpool bath. We have $1. $750 for lighting and $750 in the bank.
finally agreeing to split the difference on the remaining amount (distributive items). Length of Contract 2. During that time. Profit-Sharing 5. Wage Increase 4.Conclusion By taking the time to list all the items each person wanted and their cost estimates. Drug-Testing Program 96 50 Practical Negotiation Tactics . Pension Increase 3. both sides exchanged lists of initial demands at their first meeting. All items to be negotiated and their desired outcome for each item were put in writing for review. The combined lists total thirteen different items: Desired Outcome No. management and union negotiators found that a “winwin” approach to negotiations worked well. This year. even in difficult years. Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years.
and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). and removed from the table. No Strike/No Lockout 10.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Shift Differential 11. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). they began to trade off the exchange issues of similar value and nature. and (#9) to continue the often-discussed no strike/no lockout provision. one Making Counteroffers (The “Give and Take”) 97 . Job Security 13.6. Paid Funeral Leave 9. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground. Finally. First.Distributive rent program co-pay Exchange Exchange 7. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. At this point. They proceeded to draft the language to settle these issues. Health Insurance Employees pay 20% Continue cur. Clothing Allowance Based on senior. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). Next. (#5) a new drug testing program. Overtime Assignment 8. Because they held opposite positions on these issues. Next. signed. Subcontracting 12. eleven of the thirteen original issues to be negotiated had been agreed to.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11).
but a middle ground was eventually found on each and negotiations ended.side’s gain is the other’s loss. if both parties start from reasonable positions. exchange. Third. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. 98 50 Practical Negotiation Tactics . Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. you can use the process to settle many of the other issues on the table. Conclusion This tactic is simple. 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. The tactic offers several advantages: First. A middle ground often must be found on each of these distributive issues if you are to reach an agreement. negotiations begin on a positive “win-win” note. They then identify each as compatible. when you agree on the items where both parties have similar desired outcomes. Second. when you exchange items so that each party achieves their desired outcome on one of the two. but it can be very effective when a negotiation situation involves several issues. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. or distributive so that the negotiations can begin in an organized manner.
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. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. Waiting a respectful amount of time to counter. Rob: Making Counteroffers (The “Give and Take”) 99 . and looks like you are belittling them. Let me finish. It is especially important that you do two things: take your time before rejecting any offer from the other side. I’m not interested in a curfew. and refrigerator. so I can study. Here is how the last issue was handled: Okay. Jasper: Finish or not. do not offer a counterproposal right away. Rob: Wait a minute. and on what would be considered acceptable “sharing” of each other’s junk food supplies. and from a strategic standpoint. will make your opponent feel good about the process. each side is expected to put an offer on the table. The final issue had to do with “lights out” and quiet times for studying. even if you aren’t going to accept their offer. and can help you reach your goal. stereo. the location of the TV. and studies late into the night. last item: I’d like it quiet in the room at night. So when’s a good time? Jasper: (without hesitation) No way. you know. they decided to establish “room rules” so that they would both be comfortable with the room assignment. Since they didn’t know each other well. so he wants a quiet room late at night. Rob stays busy all day and evening with other activities. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college.Tactic 24: Wait to Counter As the negotiations begin. Mutual respect must be part of the negotiation process. They agreed on which part of the room each would have. This isn’t high school. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends.
Jasper: (without taking a breath) At best. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader. and that’s it. Rob: (there is no hesitation in this voice) No. I want a 10:30 p. and that’s not negotiable. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . Under the restructuring. 10:30 p. The union contract required that management renegotiate this change in the grievance procedure with the union. Under ABC ‘s contract with the union.m. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy. No agreement was reached. curfew on TV and other noise every night. and d) a hearing with company owner if the matter is not resolved in 20 days. b) written complaint to a floor manager if the matter is not resolved in 5 days. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. is all I’ll consider. midnight during the week is the only thing I’ll consider.Rob: (Rob was about to suggest midnight on Mondays through Thursdays.) Listen. and the union foreman would report directly to the plant manager. Jasper: Midnight. The appeals procedure would have to be altered to reflect the restructuring. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days. but changed his mind when he saw Jasper’s attitude. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person.m. the positions of non-union crew leader and floor manager would both be eliminated.
this redraft is a very simple change to the contract. ABC Company’s negotiator explained the management changes soon to be implemented. Union: Hold on. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. and I’m certain your members will be okay with it. Union: You obviously didn’t come here to negotiate. the employee and the foreman would meet with the plant manager and attempt to resolve it. rather than as a judge on the merits of the grievance. our grievances often signal to management that there are real problems on the shop floor. Company: (rather abruptly) Let’s not drag this out. Company: (no hesitating) Trust me. because those management layers are gone. but to dictate.any objection to the change. rather than go on to appeal it to the company owner. and everything else stays the same. 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. no one can complain about that. If in 20 days he/she has not been satisfied. We’ve simply eliminated the first two steps. If the union foreman felt that the grievance had merit. We’ve got a couple of alternative models for you to consider. he/she can take the grievance to the plant owner for a hearing. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. (Note: An attitude change sets in. The redraft is simple and straightforward. Union: As you know. In fact. Company: Here’s the new draft of the grievance procedure. We just cut out two steps. and began the negotiation session concerning the grievance procedure. After initial pleasantries were exchanged. The union was prepared to accept the plant manager’s position as final. Certainly. An aggrieved employee can make a request for a meeting with the plant manager. We’d like you to consider the plant manager’s role as a problem-solver.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 .
102 50 Practical Negotiation Tactics . After a cooling off period. and we’ll strike if we have to.two-step grievance procedure instead of a four-step procedure. You can’t be serious. the two parties did meet again. the company entertained the ideas the union had tried to propose before. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days. This time. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. We’ll see you on the picket line. and actually accepted a three-step procedure. rather than in the 35 days the current system provides. Union: We’re very serious.
They’ve done the research. two brothers. Making Counteroffers (The “Give and Take”) 103 . Sue’s sister Nancy called her to talk her into coming anyway. Bill’s family (parents. Sue: Yes. their spouses. four brothers. 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). and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. established goals. and at least five aunts and uncles) ate around 7:00 p. and do not dismiss something said by your opponent just because it came from the opponent. The couple used to have Thanksgiving dinner at both families’ homes. and we’re really not able to enjoy either one. But after the negotiation gets started. Nancy: Sue. you can adjust your demands or goals to include such new ideas. Bill. Next year. Mom says you. two sisters. Bill’s family won.m. If you are flexible. Even before the baby’s arrival. Be open minded. Sue’s family (parents. and identified the range of options they feel comfortable with negotiating.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. and now have a new baby girl. one sister. and ten nieces and nephews) always ate around 5:00 p. Example 1 Sue and Bill have been married four years. 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). and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. we’ll get to our side.m. it’s just too much to do both.
I know that I would rather not do two Thanksgiving dinners on Thursday.Nancy: It just won’t be right without you guys. When that goal looked out of reach. we’ll come to Mom’s. By being flexible. There’s nothing “special” about Friday. Bill won the coin toss for this year. I bet everyone could make it on Friday. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. but then I realized that the rest of you already go to your in-laws earlier in the day. either. I mean. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. it’s okay with me if you can sell it to everyone else. Sue: Next year. I thought of asking Mom if she could move dinner up to noon or so. Mom’s very upset.. Nancy: If we keep the time at 5:00 p. Nancy: I’ll let you know. she suggested a unique alternative. So that doesn’t work.m. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. Sue: I don’t know. 104 50 Practical Negotiation Tactics . Nancy: We’d make it special by all of us being together. but she won’t tell you. the holiday will be over. Celebrating the next day seems odd. 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. 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. Thanksgiving is Thursday. some people have to work on the Friday after Thanksgiving. and it became the family’s new tradition.
We’re hoping to get a commitment from them to build and help fund the operations of a new facility. had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. Unfortunately (for Kids’ Home). we hope to break ground early next year for the new orphan home. Estimates for building a new orphan home ranged from $12–$15 million. but we need some assurance that you will be able to build and operate the orphan home at that location.000 a year for operations. The foundation has a substantial endowment fund. a non-profit organization for orphaned children.Example 2 Kids’ Home. We need the city’s help by allowing us to get the city land donated to us (for free). 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. Kids’ Home: That’s why we brought the foundation’s officials with us.5 million is available for distribution to numerous charities. depending on the cost of the land. Foundation officals: Oh. Each year. They are meeting with the city to ask that the land be donated by the city for the project. We only have maybe $2 million a year to put toward this charity. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. the foundation’s regular annual grants come to roughly half of their available funds. City officals: We can probably give you the land for free. Kids’ Home hoped to get $500. 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 . but the principal of the fund can’t be touched. but we can’t fund all of the $12 or $15 million. Kids’ Home: As you know. the interest income of around $6. City: Can’t you borrow the money from a bank to build the facility.
106 50 Practical Negotiation Tactics . We probably would not be able to participate. We wouldn’t want to make such a commitment to a bank. If we borrowed $15 million at 10% interest. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. but we’re willing to look at it.Kids’ Home: Borrowing the money gets very expensive. We’ve never committed our funds to pay back a bank loan. We’re not familiar with that program. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. We’re a nonprofit group. And “donations” aren’t a very safe collateral for any bank that wants to loan us money. 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. I’ll contact the state tomorrow. and really taxes our ability to raise funds. it could end up costing double that amount.
and you probably won’t identify your throwaway items or tell your opponent your bottom-line. the neighbors began to have problems. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. and we would very much like to talk about how we can resolve these issues. and trust can only be established if all parties interact truthfully. But the Jones clan had four cars altogether. They asked to meet with the Smiths to talk about these disagreements. These parties could get rather loud. The Jones family suspected that the Smiths called the police. the Smiths could count on parking their car directly in front of their house. each side has to know generally what each other wants to accomplish. Jones: We’ve obviously gotten off on the wrong foot. It is perfectly acceptable to say that you are not ready to reveal certain things. However.Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. Making Counteroffers (The “Give and Take”) 107 . you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. and often lasted until 2:00 or 3:00 a. The Smiths called the police to complain about a late-night party. and asked the officers to cite the Jones kids for parking too close to a corner. it is not acceptable to lie. Mr. and often took up all the space along the street in front of the two houses. In order for a negotiation to be successful. Smith: We don’t know what you’re talking about. At the same time. you might not want to reveal all of your priorities at first. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. Successful negotiations depend on trust. yet not reveal all of your goals and objectives. Example 1 Soon after the Jones family moved in next door to the Smiths.m. Mr. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. Before the Jones family moved into the neighborhood.
a lot of problems. they kept it. Mr. In spite of the Smiths’ assurances. Jones: We’ve already talked to the girls about the parties. since you’ve asked. Mr. And we’ll make sure none of our cars are parked in front of your house. Jones came to see what the problem was. Is that everything now? Mr. we thought you might have called the police about our kids’ party and our cars. the next time the boys were out playing and the ball came into the Smiths’ yard. Jones: Okay. Almost every day. and was met with the following: Mr. then they’ll need to come in at midnight so that their talking doesn’t disturb you. and they won’t be having friends over more than one night a weekend from now on. we’re good now? Mr. yes. but we do know that someone has complained. At our age. I guess. Mr. Smith: You know that your boys are causing our dog. 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. Also. It is really very disturbing. we’d like to be able to park our car in front of our house. In good weather.) 108 50 Practical Negotiation Tactics . Mr. (A week later. the late-night parties are a problem. fine. Jones: Well. And the music is to be off at midnight. Smith: No. Smith: Yes. that wasn’t us. they’re hitting baseballs into our yard. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced.Mr. Jones: I wish you had mentioned that the last time we talked. Smith: Well. we have a problem walking long distances in bad weather. Mr. I’ll talk to the boys and we’ll make sure they play baseball in the park. Muffin. if they are outside. we would like to work out some solution. So. and not in the back yard. Smith: Well.
but Neno cannot tell the union this. irate) I can’t believe you people called an inspector on us. But we didn’t call the inspector. although none of the facilities outside the U.Mr. and the deal is close to being final. You obviously don’t want to be “good neighbors. You could have seen that yourself. or European companies do. you’ve said that before. the British firm will walk away from the deal. Its local headquarters has a union to handle its international shipping. the tree was clearly over the fence. Japanese companies often do not “recognize” labor unions the same way U. have labor unions. Smith: Well.S. Jones: Sure. Making Counteroffers (The “Give and Take”) 109 .S. The British insist that a very strict confidentiality provision be part of the negotiating process. Union officials are afraid that a Japanese company might purchase it. Neno has been negotiating the sale of its business to a British company. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. Why didn’t you tell us? We can’t read what’s on your mind! Mr. The Jones’ effort to sit down and negotiate the problems with the Smiths were thwarted by the Smiths’ reluctance to put all of their concerns on the table and their failure to admit that they were the ones who made the formal complaints. because they didn’t like a grievance decision. Neno’s president and the Union representative met to discuss the walkout.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. The union knows that the company is up for sale. Mr. Jones: (at the Smiths’ door. or the deal is off. Unless Neno can get the Union members back to work on Monday. The union laborers walked off the job on Friday. Example 2 Neno Enterprises is a shipping company with extensive global operations. We would have fixed the tree if you had asked.
You don’t want to mess up our negotiations. And one company that is interested has a really good track record on expanding the businesses they buy. 110 50 Practical Negotiation Tactics . Union: We think that the grievance decision affects our wages. We’ve not had a labor shutdown in 20 years. Neno: All I’m saying is that there is a difference. it will impact our marketability. no harm-no foul. Therefore. I can’t really be more explicit than that at this time. I’m certain that if we can sit down and talk next week. whether it’s for one weekend or a week. I think it already has. Neno: Look. I promise you. then there’s probably no harm done. I know it’s not news to you that this business is up for sale. If everyone is back on Monday. I’ll forget all about the strike. do you? Union: No. we don’t. But if your guys are out past Sunday. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. maybe by next Friday or the week after that we’ll have our guys back to work. we will resolve it to your satisfaction by the end of the day. If they do come back. any interruption in our shipping could affect how these buyers look at our business. Our guys are prepared to stay out a lot longer than Monday. But I have to have everyone back on Monday. Anyone who buys the company will have to honor the contract we have. this is a legal strike under the contract. is still a labor shutdown.Neno: You know this is a wildcat strike and that it is in violation of our contract. We can’t put up with the kind of decision we got on our grievance. If that’s going to have a bad effect on your being able to sell the business. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. Neno: Look. You really don’t want to do that. and if the guys are back on Monday. I need your guys to come back to work on Monday. Have the guys back on Monday. It’s not the time to have one. We’ll meet with all of the parties on the grievance first thing Monday. Union: What aren’t you telling me? A labor shutdown. so the union won’t be hurt by the buyout.
I would be more specific. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. But I can’t. as well. He told him that it would mean that the union would not only keep its jobs here. the union was willing to trust Neno—even though he couldn’t tell them everything. Union: Okay. Because the parties had dealt honestly with each other in the past. I’m going to go along with you because you’ve always dealt straight with me. But I need to tell my guys that this is important to them as well.Union: It’s that important to you? Neno: Yes. we’ll be back to work on Monday. Can you assure me of that? Neno: Yes. Union: Okay. If I could. while the grievance was being resolved. Making Counteroffers (The “Give and Take”) 111 . was the right decision to make. but the British firm will allow them to organize at their foreign locations. I can. rather than make up reasons. and it’s that important to you as well. Neno called the union negotiator in and briefed him on the sale. Conclusion On Monday. the sale was finalized.
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”)
Roberto: But it will never generate enough interest if no one knows about it. or C. Conclusion At first.000 in the budget. or we lose a whole year. that is enough time.000). Use the $5. Felipe: (Roberto’s supervisor) Sorry. I’ll find a way to do without one part-time person. I’ll approve $15. I can’t help. Roberto: Well. Roberto: But I need to start the direct mail and newspaper ads within two weeks.000 for advertising. Amber resisted the chore she hated. but the company president does not share your optimism on this program. I have three hours. keeping her Saturday free.000 budget! I need at least $20. (long pause) Felipe: Let me give you three options: A.000 for advertising. I’m not going back to him again to discuss this program.000. But when her mother laid out the schedule and gave her alternatives.Amber: row before your basketball game. Felipe: Well. but I will cut your travel budget out completely. and clean it. Take it or leave it. Example 2 Roberto: I can’t properly advertise this new program with a $5. B. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . I’ll do it now. I can accept B. but I will cut your staff by one part-time person (or $15. I’ll approve $15. Felipe: Sorry. she chose the one she most preferred. but no TV or anything until it’s done! (pause) Okay. Three. Clean it after your game.
Conclusion Felipe was willing to think “outside the box. One alternative. would enable him to adequately promote the program.” He offered Roberto three alternatives of equal cost. which was his goal. Roberto believed. thus achieving his goal of not having to ask for a larger budget. Making Counteroffers (The “Give and Take”) 117 .
you are a valued employee. the negotiator who feels the most uncomfortable with the silence will fill the gap and most likely make a concession in order to get the other party to speak. nearing her third year with the company. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. 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. I very much appreciated the fair job performance review you gave me. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. I have to tell you that while I appreciate what you have done for me. This should have resulted in an automatic promotion and a sizable pay increase. She was determined to hold her ground for at least a 13% pay increase and a promotion. inviting a response. Susan: Mr. he can make an open-ended statement. Unfortunately. I think you would agree with me that I have performed well above expectations this past year. The negotiator for the other side says nothing. Jones.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. It was 16% less than she had been led to believe she would be getting. Jones: I certainly do. After a few minutes of silence. Example 1 Susan. but one side comes back with a non-negotiable demand. If his opponent cannot agree to the demand but does not want to end the negotiations. You know my commitment to this company. Susan: I hope so. received a glowing report from her boss on her job performance. Here’s how the negotiations went. and 118 50 Practical Negotiation Tactics . the promotion had not yet been approved. Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her.
and I think that I really haven’t been dealt with fairly. Susan’s silence prompted Mr. it could help. and I’m sure management will agree. Jones to continue to offer solutions. Okay? (says nothing) Let me check it out and I’ll get back to you. Well.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. (says nothing) Or. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. I really want you to stay with the company.or three-year period. maybe we can talk about the promotion later in the year. If there is some flexibility in your request. but a pay increase of that size might be more difficult. I suppose I could get the promotion approved with the proper presentation. (says nothing) If I can’t get that pay increase approved right now. Once he acknowledged that both items might be awarded sometime in the future. and sell it to management that way. Promotions of this type are all but automatic around here. because I feel my future with the company might be at stake here. the company’s refusal to grant them now was a harder position to support. I could probably find a way to phase it in over a two. I would very much appreciate it if you could ask the company to reconsider. if management can see their way to giving you the pay increase now. I must ask you to try to get both. of course I will be glad to do that. Conclusion Mr. Making Counteroffers (The “Give and Take”) 119 .
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. has colored these negotiations. The end of the agreement coincided with the election cycle for the two towns. Mr. Town Council Chair). Mayor’s representative: No. My bosses might not have been inclined to expand the agreement anyway. 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. but now they’ve got to ask what Madame Mayor’s motivations are. Also. her plans really don’t have any bearing on these negotiations. The parties agreed to continue the previous terms of the agreement. The mayor. 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. This is how the negotiations went: Town Council Representative: Well. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. by saying that she might run for Chair. and until she does. I don’t think it’s a problem. Town Council Representative: I think you’re wrong. She has not decided what she’s running for. The term of the original agreement was nearing its end. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner. Mayor) said that she was considering running for office.
the Town Council’s representative left the mayor’s representative with no room to maneuver. Mayor’s representative: Well. I’ll go back and tell Madame Mayor your position. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. He either had to end the session or figure out what to say to reengage the other side. Making Counteroffers (The “Give and Take”) 121 . I don’t know what her reaction will be. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well. and the agreement was renewed with no new provisions. Conclusion By remaining silent.represents have to worry that her desire to switch governments might taint the negotiations. 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. the Town Council representative’s position prevailed. In the end. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. I hate not to attempt to add some additional areas to the agreement.
“I have to have this. You will have to remove the rock barrier. 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. or we will be at an impasse. It calls for compromise. in a small clearing. Having an iron-clad demand probably won’t give you enough room to reach an agreement. you should always enter the talks with a good idea of what you are willing to agree to. She traced the brook back along its course to see why and where it had changed its path. The reason I built it was so that I could protect my patio. had redirected the brook further into her property. the brook was the property line separating her property from a neighboring farm. The brook 122 50 Practical Negotiation Tactics . She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. Madeline.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. The property came with three acres of forest alongside a meandering brook. She discovered that a rock barrier. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. after the gazebo had been there for about five months.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. Example 1 Madeline bought an old farmhouse outside of a small town. she noticed that the brook came within 100 yards of it. Madeline built a gazebo about 500 yards from the brook. As was sometimes the case in these parts. the brook and rock barrier are on my property. Neighbor: Well. 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. One day. which an upstream neighbor had built. Madeline: Hi. when one of you might say. I have a problem. Joe. and began to renovate it as a home and a pottery shop. Obviously.
Making Counteroffers (The “Give and Take”) 123 . When she found out that this was not going to solve her neighbor’s problem. and return everything as it was. My neighbor on the adjacent farm wants to sell part of his property for a housing development. This will put these houses right next to me. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. I’ve lost 400 yards of property on my three acres. Also. She left room for a compromise. and allow the neighbor to protect his home. but I don’t know what I can do about it. 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 couldn’t have that. Madeline: Well. 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 was able to protect her gazebo. Then. restore her property line. which enabled her to achieve her goals. at least I’ve maintained my property line. what I need is to protect my property line and my gazebo. What if you removed the barrier for a short time. but you’ve changed the boundary line of my property. Neighbor: I’m sorry. Madeline: But by diverting the brook.extended right up to my back door when the rain was heavy. she widened her range of options. Madeline: Yes. By expanding the range of options available to resolve the dispute. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. It might not be necessary to make such a dramatic change. I understand that. Neighbor: I can do both of these things. I won’t remove the rock barrier. I can’t have the brook in my house. you have not only threatened my gazebo. if the brook is redirected.
As best as we can tell. But only a few of our people are close to retirement age. The pilots want dependent coverage paid for by the company. the airline paid a total of $200. and the premiums for health care just keep going up. Over the last five years. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.000. Pilots: Look. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits. 124 50 Practical Negotiation Tactics . This would be a better benefit in the long run. dependent coverage could cost us $1. and are willing to keep pension benefits the same. and we know that with this new contract term of five years. If we invest the $200. with all wage and operations issues resolved fairly early.000. The projections for the next five years were that these costs would increase to about $1. what they really need is for you to cover the costs of dependent coverage. Everyone was afraid that the dispute would cause an impasse and a possible strike.000.000. This is just a cash-flow problem that your members have to understand.000 to cover the premiums for dependent coverage.000. The company wants to trade paying for dependent coverage for better pension benefits. that would be the minimum increase.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. The airline industry is in a slump. With long-term planning and investments.000. the company can make your pensions much better. we know that health insurance premiums might skyrocket. Over the next five years.000 (which we reasonably should have expected to pay in premiums) in the pension account now. Company: This could not come at a worst time for us. And we cannot afford that $1. then the pension benefits overall will increase by $10. you are taking a risk on the costs increasing. However.000 figure. as it has always been.000.000 a year over the next five years? Company: Yes.
The health insurance market stabilized. the company will not be expected to give us this benefit. and the pilots knew what to ask for when the contract expired.000. The pilots expanded the range of options. Conclusion The company was committed to limiting its exposure to $200. if they were that high. we are. The dependent coverage is more important to us now than the pension benefits. The $200. Company: If the company spends the $200.000 the first year on the premiums. that would be worth it. so the decision to be flexible was a good one. however. by agreeing to let the company cap its exposure for dependent health coverage. It initially believed that the only option was to put that money into pension benefits.000 to either pay one year of the premiums. with a cap of $200. 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.Pilots: But you do have the $200. can we agree to a year-to-year agreement on dependent coverage.000 actually carried them through four years.000 available. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes.000? Once the cap is met. then those funds will not be available to invest in the pension plan. Making Counteroffers (The “Give and Take”) 125 . or invest in the pension plan? Company: Yes. Company: Then it’s okay with us.
If you are on the receiving end of such a tactic. it’s a deal? 126 50 Practical Negotiation Tactics .Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami.000 for a Volvo? I bought the one I’m driving for $19. Phrases such as “for only pennies a day. be sure to add up the total cost.000 car. $45. I love this car. what monthly payment did you have in mind? Buyer: More like $300 per month. I just can’t imagine the monthly payment on a $45. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. I recall the day you drove it out of here.… (20 minutes later) Saleswoman: So. Buyer: Way too much! Saleswoman: Well. and compare it to your strategic objective.” 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. Saleswoman: With your 740 in trade. Example 1 Car buyer: What.” “affordable weekly payments. Saleswoman: I’ll be right back. if I can give you this car with a $300 monthly payment. do you want to look at something else? Buyer: No. I guess it would be around $600 per month.500! Saleswoman: Yes. but that was several years ago. Buyer: Yes.” and “low monthly rates” are examples of the salami tactic.
and payout slices to reach the total price she wanted. it will be a five-year lease. You can do that.” she had him—she worked around the $300 slices. as promised. Sure.00 per month for your service. Making Counteroffers (The “Give and Take”) 127 . but what else must I buy? Only the basic service for $8.000 price into “slices” the buyer thought reasonable. Instead of a three-year lease.Buyer: I don’t see how you can do that. (looks at the numbers) That looks good.00 per month. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes. with your car and $6. But my neighbor pays $39. you can get the Disney channel for only $5. Saleswoman: Simple.99 per month. and added the trade-in. Great! So. I can’t discuss another client’s account. do you want HBO? How much? $5. Once the buyer volunteered that $300 was an affordable “slice. Let’s see. down payment. I can afford $6.” She decided to cut the $45.000 down. I can’t afford that much. but let me see the numbers. can’t you? Buyer: Yes.00 per month.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock. do you want Disney? Yes.
What about the music package? Yes.00. and probably felt much better about the total negotiated package because it was presented in modest individual slices. they asked about the Cartoon Network.00 per month. Yeah. 2? How much? $8. Thanks. Any other kids’ channels? Yes. Conclusion The owner thought his neighbor’s service at $39. Okay. and my wife wants the old movies. Disney is for the kids! The sports channels are for me. 128 50 Practical Negotiation Tactics . 3. and SI 1.00 per month was far too much. But that’s all! Then we’ll hook you up on Monday. instead of one total amount. The total is $38.00 a month. but he agreed to six “salami slices” for a total of $38.00! Why? Because he judged the per-slice price to be reasonable. I really want the sports channels.99 per month. 2. That’s $5. we had that before.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. Great. That’s another $5.
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. it is effective. Tactic #33 (The Bluff) is a classic pressure tactic. 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). turned off by the tactic. the traditional car salesperson might tell the buyer. and the use of humor.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. It should be used with caution: It can end negotiations immediately. but it can be used effectively when one party clearly has an edge. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer). an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. Applying Pressure 129 . Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. Humor might not look like pressure. however. In some cases. so are you ready to make a deal? This might convince a few buyers. which can be successful if the opposing team has two or more members who hold different views of an issue. but others will walk out the door. but in tense. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. “I can only guarantee this price until 6:00 p.m. pressure tactics should probably be avoided. For example. When both sides believe that each has equally strong positions. angry negotiations. and it can destroy your credibility. today.
The two couples used the sailboat a lot the first couple of years. Chloe and I would like to take the sailboat with us. boat prices have really gone up. but it is not a good idea to exaggerate what you are offering or what you are giving up. in fact. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. and we’ll be moving south in the next month or so. Lacey. getting a divorce and each moving away (and would have no more use for the sailboat). I don’t know. and they will weaken your credibility. And we don’t want to be unfair. and we need to talk to you about how we can buy you guys out. together and separately. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. he and Chloe wanted to buy out Don’s and Abby’s interest. Don and Abby now use it less and less. Lacey and Chloe didn’t know that Don and Abby were. We’d hate to give it up. Don: Absolutely. Although I do think there ought to be some consideration for the two years you had use of the boat. but Don. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. Don: Wow. Lacey: I know. Abby really loves that boat. big news! I’ve been promoted. I think Chloe and I would be willing to pay more than just the money you guys put into it.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Such exaggerations are easily revealed or uncovered. In the last couple of years. Your opponent will consider you untrustworthy and might even be insulted by your attitude. When Lacey found out that his employer was transferring him to another city farther down the coast. Lacey: Don. It 130 50 Practical Negotiation Tactics .
Abby is having this conversation with Chloe) Chloe: Abby. big news!! Don got his promotion. and I’ll get back to you. Don: Lacey. he likely would have found himself in a stronger negotiating position. I thought you understood how important this boat is to Abby. and we’re moving farther south. I have big news too. the boat has depreciated. (After Lacey and Chloe had a chance to talk. Applying Pressure 131 . I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. Conclusion Don got a lot less than he could have from Lacey because he found out that Don exaggerated the importance of giving up the boat. Don and I are getting a divorce. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. We’ll be leaving here for the Midwest. I was afraid something was going on when you all-butstopped joining us on the boat. which you would have to share if you want to retain half-ownership. but separately. After all. It just reminds me of how happy Don and I used to be. Abby: Well. Chloe: Oh.) Lacey: Don. Lacey and Don’s negotiations changed considerably. Let me talk to her.is just about the most important thing we own. I’m sorry. though it’s not so happy. Abby: That boat. I’ve been thinking. Don. and neither of us put much in for upkeep. I’ll be glad never to see it again. It’s about time now for some major investment. Abby told Chloe about the divorce and about how she never wants to see the boat again. Lacey: Cut it out. I’m surprised by your attitude. (Around the same time.
I’ll be going back to them as soon as next week. in this global market. and that the economy is strong. I’ll have to show them 132 50 Practical Negotiation Tactics . 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. our production line changes at least three times a year. the situation in the stock market is not good. I’m afraid that with this current information. in fact. the company president decided to use the stock price as a negotiating tool during the current union contract talks.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. Here’s how these negotiations went: Company president: Well. I think you’ll have to agree with me that wage increases in this next contract will not be available. I’m telling you the stock price is having a huge impact on us already. Union negotiator: The stock price might be down right now. but this has been such a crazy situation. Company president: Well. I’ll be looking to you to make some major wage concessions on this upcoming contract. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. The current stock price is the lowest it has ever been. I read in the papers every day that the market is still strong. I can’t see how today’s numbers really impact the long-term profitability of this company. And as you know. And while these fluctuations have little to do with the health of the company itself. we will need to make drastic cuts in our operating costs just to survive. they will make their decision based on a review of the stock price that day.
but I checked it out and it’s not totally true. When the market took a swing up during the negotiations. Union negotiator: Well. Let’s get back together next week. and I’ll have our people look at it. okay. we’d like to reopen talks on next year’s pay increase. and the union ended up with a substantial increase in their contract. they would do a thorough analysis and look at the health of the company over the long haul.that we’ve cut expenses to counter the losses in the stock market. let’s talk about it. If the stock goes up next week. Applying Pressure 133 . but your proposal to cut wages is just not going to fly. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. If you put it that way. the company’s position was weakened even more. When negotiations resumed. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. (In the interim. Company president: All right. They told union officials that it would be very rare for a bank to make its decision solely on stock price.) Union negotiator: I’m sorry. Union negotiator: I know that’s what you told me. he lost the trust of the union. The union became hardened in its position that the employees needed wage increases in the new contract. Give me your proposal for wage concessions. So. We think this company is very healthy and can withstand the temporary downturn. no concessions! In fact. Conclusion Because the company’s president over-emphasized the impact of the market on the company. here’s what happened. the union checked into the Letter of Credit transaction with some experts in banking.
Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. either. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. Poker players know all-too-well-that bluffing can be very costly. The couple had not discussed marriage. Tom: Oh. If you subsequently agree to begin talks again. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else.Tactic 33: Bluff! Bluff with caution. Here’s how the discussion went: Christy: Tom. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. and I really wanted to see the new Lenny Bruce movie. 134 50 Practical Negotiation Tactics . I called Charlene and she was available. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. I guess I’m just surprised. are you? Christy: I don’t want to be. it might backfire. We don’t have that much free time together. but I really am. Both of them were still in graduate school and worked full-time. they are bluffing. yeah. Sara said she saw you at the movies with Charlene yesterday. Charlene. you will have lost credibility with your opponent. 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. but Christy thought the relationship was heading in that direction. You’re not upset about that. This can come back to haunt you. and they really have no intentions of doing so. I knew you had a class. She knew that if she made such a demand and threatened to leave him unless he made a commitment. so their “free” time was very limited. Example 1 Christy and Tom had been dating for about a year. I really hate it that you chose to see the movie with Charlene.
she paid her own way. I’m willing to risk losing you. if you can’t make that kind of commitment. If that’s not possible. then I’m afraid I want us to stop seeing each other. Since he wasn’t sure about that. he had to make a commitment or risk losing her. I just thought of her because I knew you weren’t available. 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. I won’t go out with any woman friend. Actually. I need to have your commitment that you won’t do that. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. Christy: I just can’t see it that way. It really wasn’t a “date”—we just saw the same movie together. If Tom had “called” Christy’s bluff. and at first he thought she might bluffing. He believed she was sincere.Tom: She’s a friend who happens to be a girl. Tom: Okay. so he didn’t call her bluff. The union negotiators. Conclusion Tom didn’t want to lose Christy. but very little progress had been made. Tom: You’re serious? It’s that important to you? Christy: Yes. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. Christy: What I’m saying is that I can’t accept that you are going out with a “friend” who is a woman—not at this stage of our relationship. Tom: I have friends of long standing who are women. Applying Pressure 135 . It is. It’s made me realize that I want us to have an exclusive relationship. I certainly don’t want to lose you. She convinced Tom that her feelings were strong.
This is something we just have to have. This is a critical issue to us. or else we’ll be asking the membership to strike. then all of our other demands will change. Nexon: We’ve got lots of issues to discuss. If we’re not able to reach agreement on this. Union: You don’t seem to understand. Nexon: I’m sorry. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers.) 136 50 Practical Negotiation Tactics . 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. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. Second.believing that Nexon would not risk a strike. but working without benefits is simply not acceptable. We need some agreement on this today. Here is what happened at the next negotiations session: Nexon: I’m sorry. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. And I don’t believe you’re going to go call for a strike over this. Why don’t we put this one aside for now. The union members ended up voting not to strike at this time. We need an answer today. We’re not going to reach agreement on this at all. much less today. Many of our union members who are working part-time hope to work full-time. we’re really prepared to go the distance on this benefits issue. it will cost too much. First. Nexon: I’m just not prepared to give you one. we want the part-time workers to apply for and fill fulltime positions as they become available. Union: You’re wrong. Another bargaining session was scheduled.
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
They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. there were times when there was no pressure and no emergency. Unions can strike at any time to achieve their goals if they have some leverage. for example. Since the heating and air conditioning company held no leverage over him. It is sometimes referred to as “pressure bargaining. the guy was in no position to dicker over the price of the repair. not blessed with many household repair skills. The same kind of thing happened a couple of years before that: In the middle of August. once had to call a plumber in for emergency repairs. while the other is not—that is. The owners of professional sports Applying Pressure 141 . If the employer is a shipping and express mail company. Try bargaining with a plumber! This homeowner. and was forced to pay whatever they demanded. because this is the busiest time for that industry. Since his toilet had overflowed and water was continuing to run all over the floor. he was able to successfully bargain for other services. Example 2 Let’s face it: Sometimes one party holds all the cards. when one side has “leverage” over the other. On the other hand.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. such as the advantage of time. his air-conditioning unit went out. its union has the advantage in the weeks just before Christmas. He was at the mercy of the company that could install an appropriate unit the fastest.Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations.
the employer has the advantage: a supply of jobs. for example. Other employers find themselves in situations that actually reverse the leverage (when. When the employer proposed adding duties to the job classifications. he didn’t have to be flexible because the employees believed that they had no alternatives. benefits. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. (Team owners are notoriously unpredictable. The employees had no power to resist the demands of the employer. either individually or through collective bargaining. but before you choose such a tactic. can suffer repercussions in the form of sabotage. then you are in a position where you can set reasonable demands on wages. On the other hand. but they are less willing to negotiate several months ahead. however. and other undesired outcomes. low employee motivation.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. This gives it the upper hand in negotiating with employees. If you have a special skill that an employer needs and few others have that skill. etc. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. A note of caution: Circumstances in one round of negotiations might give one side an advantage. there are likely to be long-term repercussions. she has leverage and can more likely hold firm on her price. it is the union’s turn to hold firm on its demand). unemployment is low and jobs are plentiful. despite strong resistance. will what goes around come around? 142 50 Practical Negotiation Tactics . if the unemployment rate is high and jobs are few. consider whether or not the two parties will likely meet again in the future to negotiate. When one side places undue pressure on the other side. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. If so. What goes around comes around.
I can’t drive if you keep this up. Example 1 A father and his two daughters were on their way to visit the grandparents. but use this tactic judiciously. Andrea had taken them off the doll. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. I took it out of the box. Andrea. and Susie hid them under the seat. (In a few minutes. (Their dad pulls to the side of the road and turns to face them in the back seat. Why? A sudden surprise can disrupt the dynamics of a negotiation. the little girls began to fight over the doll.) Applying Pressure 143 . Almost from the beginning of the three-hour drive. because you will probably only get to use it once. Just share the doll. Andrea: The doll is mine. The doll can be shared. Consider making a suggestion or a proposal that completely surprises your opponent. You’re driving me nuts. Susie: The doll belongs to both of us. About an hour into the drive. Andrea: Okay. you have it when we drive home. We’ve got a long ride ahead of us. Just because you saw it first doesn’t make it yours. Mom said so. the argument is over the doll’s shoes. Susie: Okay. you have it this part of the trip. the fighting starts up again. and I can’t stand it.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. Tell Susie to let me have it. and Susie. the girls had been fussy.) Dad: Stop it right now. and here’s how the “negotiations” went: Dad: You two stop fighting. Their dad tried to reason with them. This time.
but nothing else up to that point was working. 144 50 Practical Negotiation Tactics . (They continued to argue and whine and pinch each other. The local newspaper was prepared to urge the auditor to end the litigation. Dad tried correcting them a few more times. Dolly doesn’t need shoes on in the car. Finally. he slowed down. He grabbed it and threw it out the window. to no avail. they didn’t say another word. Both Andrea and Susie were so shocked by their dad’s action. The tactic was so successful. The auditor asked to meet with the editor to explain his position. at great expense to the auditor’s office and the school board. in fact. so it was worth the risk. I want the shoes. and I hope I can convince you of that. Dolly has to have her shoes. She can have them later. 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. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. Daddy said I got the doll on the way to Grandma’s house.Andrea: Give me the shoes back.) Dad: Now there’s no more fighting over the doll. and that they had invested and spent the tax dollars wisely. and reached back for the doll. Susie: Daddy didn’t say anything about the shoes. Conclusion Dad’s use of a “surprise” tactic was extreme. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. The litigation itself had been going on for more than three years. He initiated the litigation against the local school board members and several banks that invested the money for the board. The defendants contended that the auditor’s actions were politically motivated. charging that they breached their duty in their handling these funds. I think I have acted properly.
but I have to warn you that from what I’ve seen and heard so far. They are very persuasive that this is just a political battle. Auditor: Well. 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. Conclusion The editor wrote an editorial urging a resolution for the good of the community. From what I can see. and a significant amount of money will go toward the tax fund. as a matter of fact. this case needs to be dropped. Applying Pressure 145 . Obviously. Thank you for coming in. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. one of the banks settled with my office. Your reporters will probably want to follow up on it. but recommended that the parties reach a settlement. and it is costing your office money and good will. there’s just nothing to back up your allegations. They’ve been making that same argument from the beginning. rather than drop the case. I guess we’re finished here. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. That’s really the reason this has gone on so long. Here are the papers. Editor: Well. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. Editor: Well. I think I have something here that will convince you otherwise. Auditor: I appreciate their arguments. We believe the other defendants will soon follow suit.Editor: I’m certainly willing to listen. I really think the community would be better off. but actually superior to some other entities you supervise. This morning. the bank would not have done that had we not proven our case. perhaps you should just cut your losses—and just drop the suit.
Mike knows he needs to get either his wife or his son on his side. Kevin: So am I. you might be able to dilute their power by identifying their different interests and addressing them separately. Dad. although getting your license and getting a pool table are connected. night after night. Kevin is against it because he is turning 16 years-old soon. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. I want to talk about a car! Mike: It’s really not one or the other. Mike: I know. and a car is more important to him than a pool table. Tina: I’m really against this pool table idea.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. I know we’ll all enjoy it. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. Tina is against it because she doesn’t think it will be used that much and it will take up a majority of the floor space in the family room. I’d 146 50 Practical Negotiation Tactics . but I think it will get a lot of use. I can remember spending hours playing with my friends and family when I was growing up. especially Kevin. they’ll be mobile! The last thing I want is for them to be out cruising around. If the other side involves more than one person. Tina and their son Kevin are against the idea. Kevin: I don’t really care about a pool table. Example 1 Tina’s husband Mike wants to buy a pool table for their family room.
some. Tina: Well. 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. A pool table could attract them here. only Kevin did. She noticed that Jim (another member of the union’s negotiating team.like them to hang out here more. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. then maybe it’s not such a bad idea. A number of contract changes have already been worked out and Wylma. the head of the union negotiating team. I thought we were making real progress. Here’s how the negotiations went. she joined his side of the debate. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. I’m surprised. Tom. received it without comment. the chief negotiator for the company. Mike: I really do. But I’m not going to hang out here all the time. don’t you think you guys would use it? Kevin: I guess so. Instead of both opposing the idea. Conclusion Mike found an argument that divided Tina and Kevin. Once Mike convinced Tina of the idea’s merits. What happened? Applying Pressure 147 . Wylma: Tom. They bought the pool table. Kevin. has just presented the company’s initial wage offer. 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. and Kevin and his friends use it often.
Tom had reduced his wage demand significantly. these are our actual accounting figures. When the negotiations began again. these are accurate. I think you need to rethink your demand. Let’s start again tomorrow morning. Jim? Jim: Yes. you certainly are aware of our financial situation. But Tom. you’ve seen our sales projections and production costs. you’ve heard our demand. (When they resumed.Tom: Wylma: Nothing happened. but he added some workplace changes that Wylma was comfortable negotiating. 148 50 Practical Negotiation Tactics . 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: Now Tom. Your demand is totally unreasonable. Wylma distributed copies of financial data that showed the company’s current condition. forcing them to reconsider their demand. Wylma: Let’s take a break. Wylma: Tom. Tom: We don’t think so. Do you think this is reasonable? Jim: (looking uncomfortable) Well. Right. This is just what we think is fair. Wylma: Jim. as Jim can point out to you.
I don’t feel Christmas in the way I used to. I want to say something. get over it. so what’s the point? I don’t need another tie! Madison: It’s not the gift. Stay alert and watch for clues that a negotiation is about to get out of hand. but it is really important to me. the oldest and youngest Jones children. married. We can’t afford to buy each other things we really need.Tactic 38: Break the Tension Tension is inevitable in most negotiations. especially between Madison and Cory. Example 1 The four Jones kids grew up. Tempers flare and people say things they shouldn’t out of anger or frustration. Sometimes the argument got heated. That will just make a bad situation worse. 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. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. but the thought that matters. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. You are almost 40 years old. but as the children grew up and had families of their own. When all of their children were small. Cory: Madison. and had children. Applying Pressure 149 . so pressure grew to draw names and exchange gifts. but it should never be at anybody’s personal expense. and it makes me very sad. it was easy to agree on just giving presents to the children. Ever since Mom and Dad died. Madison: Okay. Humor often works to break the tension of the room. so you can find a way to quickly neutralize it. some of the siblings decided they liked giving presents to one another.
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.
” Can I color now? You said we would color later. the exchange will be between things of equal value. the individual might be afraid that the exchange isn’t equitable). C. each side must decide whether or not one more compromise will produce an agreement that they will later regret. Okay. Isn’t it “later” yet? Right now would be a good time to go outside.” Dara. it is better not to compromise. Example 1 Julie and Dara both attend a local preschool. they would have to play ball with older children. When that point is reached. If I can be the Princess. I want to play “Princess” and I want Dara to be the “Prince. One day. C. however. and that doesn’t happen without compromise. Both of the little girls liked to play ball when they were outside. It is the give-andtake of a negotiation: one party agrees to give up one of its demands in exchange for something of value from the other party.: Julie: Dara: Julie: Girls.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. how about going out to the yard for a while? You can swing or play ball. At some point. (In a successful negotiation. they were the last children left in the playroom for the remaining two hours of the day.” but she needed Dara to play with her. I want to play “Prince and Princess. Julie wanted to play “dress-up. was ready to color. Then we can color. The day-care worker wanted to take them outside for a while so that he could visit with his friend. but since the other children in their room were not there. Mr. Dara. who was outside with older children. If there is resistance to compromise. or maybe tomorrow. not the Prince. 154 50 Practical Negotiation Tactics . don’t you want to play? We could color before your mom comes.: Julie: Dara: Mr.
C. you can come back in and play “Prince and Princess. and teenagers attracted by Making Progress 155 . however. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. They did all the compromising they were willing to do. Mr.” No. We want to play dress-up and then color. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot.Mr. The owner decided to try for a variance. 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. Conclusion The children stayed inside and played dress-up. or apply for a variance. neighbors became concerned about the changes to the mall. The existing parking lot didn’t meet the current parking standards for that size theater. The owner and a small group of neighbors met to talk about these problems. C. the parking lot will start to look trashy. When his variance application was made public. failed to offer the children something that was as important as the plans they had made. According to the city’s zoning laws.: Julie: Hey. 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. wouldn’t you like to go outside first? After you swing for a while or play ball. 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. and they still had time to color. We don’t want to go outside.
Right now. 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. We’d like you to prohibit cars from entering or leaving from the south lot. but it’s not ever full. So. if I agree to move the theater entrance to the south side. lights in and out at night can be very annoying. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. Many of our homes back up to that lot. and we’d like to keep it that way. We’d really like to block off that cut-through and have the theater face the south. as you said. even though I’m not adding any parking. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. the north lot is used more. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. driveways on the south side of the mall are along the east and west side of the parking lot. Right now. What if I changed the entrance to the middle of the lot? That way. I’m afraid. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. with your plans to put the entrance of the theater on the east side of the mall. We hope you’re right. The neighbors: Owner: 156 50 Practical Negotiation Tactics . I could put a privacy fence along the east and west—at the backs of your yards.the theater will start to hang around and maybe wander around our yards at night. Not having in and out traffic to the south of the mall is just not very practical. the south parking lot has not been used much. not having direct access to the south lot from the street would be unworkable. You could have all of the traffic enter from the north lot. With the Comedy Club and the grocery store on that end. and break in his door. In fact. And. We’re just not convinced.
then will you agree not to push for increased private security? Yes. If I agree to move the theater entrance to the south. Agreed. and make sure the parking lot is kept clean. Conclusion Both sides had to give up something on certain items in order to reach agreement. The fences created a buffer from the lights and noise. Teens can form into gangs if left unwatched. If the fence was set back the width of a driveway onto your property. and they discouraged patrons from parking on neighborhood streets. set back a driveway width. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. But you’re going to have to have some kind of security as well. however. put a privacy fence along both the east and west sides of the south lot.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. there could still be access from the street to our garages—just not to the main parking area. And a year after the theater opened. Now you’re talking about considerable expense. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. Making Progress 157 . the neighbors reported that they were very happy with the way it all worked out. The compromises were what everybody could live with. add a new entrance into the south lot.
Tactic 40: Be Friendly Being polite. professional. but be friendly.. The dog was Mrs. I’m Joan. and that as angry as they were. Joan was already pretty tired. thinking that you will be just as easy to work with on the sticky issues. and pleasant always enhances one’s ability to reach an agreement.m. Mrs. they had gotten nowhere.m. and because she was hard of hearing. so her neighbor’s barking dog came as an unpleasant surprise. 158 50 Practical Negotiation Tactics . but going out of your way to be friendly is an especially helpful tactic. just forget it. She didn’t believe her neighbors ought to complain about the barking. respectful. Present your position forcefully.m. Lonely’s only companionship. This gives you an advantage. Mrs. and I just moved in next door. Joan: Hi. she just didn’t think it was a serious problem. If your opponent is aggressive or angry. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. and started to get upset. Close your windows at night and don’t listen. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. Joan decided to at least try and talk to the neighbor. She learned that everyone in the neighborhood had complained at least once. incident was usual or unusual. and what kind of complaints might have already been made. They might even start to underestimate your negotiating skills. because you are the one to set the tone for agreement. Lonely: If you’re here to complain about my Rocky. 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. Your opponent might give in readily. Joan had a new baby. Example 1 Joan was new to the neighborhood. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Lonely. and didn’t stop until 6:00 a.
not at all. (Joan’s sleep was disturbed by another night of barking. too.) Hi. Lonely: Joan: Mrs. Here’s my little angel. Lonely again. it’s probably because they just haven’t had the time to get to know him. Making Progress 159 . My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. Why. I sure hope he starts sleeping through the night soon. No. How long have you had him? Almost eight years now. I’ll see you. Lonely: Joan: No. Lonely: Joan: Mrs. I guess that would be okay. Do you think his age has contributed to some of that? You know. I know that some of these people around here don’t like him. sure. Well. Lonely: Joan: Mrs. I need to get the baby home. is a really sweet dog. When he does. I just wanted to come by and introduce myself. I’ve got a friend who is a veterinarian.Joan: Mrs. I stopped by and visited with him over the fence this morning. Lonely: Joan: Mrs. Well. He’s a real comfort to me. no. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. though. Who. I guess so. Maybe I could come back tomorrow and bring him? Oh. isn’t he cute! He’s a handful. Mikey. I’ve only got my Social Security. but she took her baby and went to visit Mrs. by the way. The barking at night has been mentioned to me. I’d like to introduce you to my new baby. I can’t pay for something like that. then. don’t worry about that. He’s been keeping me up at night. I might have to talk to you about Rocky.
After Joan’s veterinarian friend visited with Mrs. agreed to meet with the mayor. overseeing a factory in Mexico and selling products in the states. They anticipated that it would be an unpleasant meeting. Company ZZZ. Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees.S. Hearing about this from the press obviously puts you in a very embarrassing situation. the mayor called and asked for a meeting with Company ZZZ officials. he prescribed medicine that gave Rocky a more regular sleep schedule. that the press got hold of the story of our company’s activities before we could call you to let you know. that’s very understanding of you. Company ZZZ: (surprised) Well. its 150 management and sales employees could continue to work in Happy City.A. Lonely’s needs and arrive at a workable solution to the problem. The barking all but stopped. of course. Here’s how the meeting went: Company ZZZ: We’re very sorry. U. Lonely and Rocky. It’s very difficult to make a move of this type without having it leak out. 160 50 Practical Negotiation Tactics . Joan took up contributions from the neighbors. 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.Conclusion Joan’s friendly approach enabled her to understand Mrs. Lonely didn’t have to pay for the medicine she could not afford. I think that if you could have let me know ahead of time. When he heard the news on the radio. you would have. recognizing that the layoffs would be an issue in upcoming local elections. and Mrs. Under its new corporate structure. Mayor: (very friendly) I understand how these things happen..
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. the 150 management/sales jobs did end up moving to Mexico. the city has a potential buyer for your plant building. The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. We just haven’t heard anything yet. 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. Mayor: Great! Let me know when we can talk again. Unfortunately. Many laid-off employees did indeed find new jobs at the plant. Company ZZZ: I’m not sure what to tell you on that. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. or would we need to involve the Malaysia group? Company ZZZ: Certainly. This strategy worked. because I’d hate for us not to make an appropriate pitch to them. Making Progress 161 . It’s possible that some of the 300 laid-off employees will find work at this new endeavor. The buyer is a “disadvantaged business” we have been working with for some time. and I want them to know that. By the way. 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. and the mayor was reelected. Would you be in a position to talk to me about such a deal. Mayor: Please let me know as soon as you can.
The effect on the other party might be even more substantial if lies. He asked his elder daughter about the arrangement. and Alexis. age 14. Jones’s supervisor. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Alexis knew this was not fair. They might worry that the tapes will be made public or given to others.00.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. are talking about a possible settlement of the issue. thus becoming a source of embarrassment. were on vacation with their parents in Myrtle Beach. who was disappointed to hear that she might propose such a deal. The two sisters had saved up a little money so that they could buy souvenirs. Michael Wood. Somehow. until Susan said they would evenly split what they bought. Fred Adams. Conclusion For the first time in her life. but Susan had only $20. Alexis agreed. the accused.00 to spend. had $40. 162 50 Practical Negotiation Tactics . age 15. the investigator. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. Susan repeated her demand. Alexis then played the tape for her father. Example 1 Susan. Susan understood the impact a tape recording can have when it reveals a lie. South Carolina. this time in front of a hidden recorder. Alexis. the younger sister. She borrowed a tape recorder so she could ask her father if this was a fair deal. or simply “bad faith” methods have been used by the other party. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. Then he played the tape. and Jones. Susan denied it. or used to pressure the other side to agree to certain demands. threats.
Mr. When Adams set the tape recorder on the table and revealed that he had witnesses. Well. Conclusion Jones had knowingly lied when he denied the charges.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again. Appleton both claim they saw the incident and will testify. But by refusing to repeat his answers. Your request. Mr. So you refuse to repeat the answers you just gave us? Yes. And please describe your general manner. to quote you. So.” meaning something other than copies? No. I’ve brought a tape recorder with me. He failed to think about what might be the next step. exactly what you said to Ms. stares. you are aware that the next step in this process is to ask witnesses to come forth. I simply asked her to make copies for me as quickly as possible. and gestures did not have a single hint of sexual implication or innuendo? None at all. Jones. I think I can write my recommendation. No one could have possibly misunderstood your intentions? No reasonable person. and now I’ll ask you to repeat your answers—on tape. Starr. And you did not threaten her job if she did not. (a long pause) I want to see my lawyer. Ruiz and Ms. he also lost his negotiating position. You never touched any part of her body? Not even accidentally? No. Making Progress 163 . “Do what I want. Jones suddenly realized that his strategy would not work. Stuart.
Maria.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things. because you did the cutting. Maria and Roberto: No. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. the classic “split and choose” tactic might be the best way to settle the issue.” the divider. take this knife and slice the Snickers into two halves. of course. Realizing the potential of getting the “smaller half. Roberto will get to choose which half he wants. Their dad instructed them to share the candy bar. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . one person is given the task of dividing the object(s) into two parts.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. with the remaining part going to the person who did the dividing. Oh. 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. which certainly is large enough (he naively thought) for two young children to easily share. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. is usually careful about dividing the object into two equal parts. Many of us learned this one from our parents: After two people agree to the strategy. The second person then chooses which of the two parts they will receive.
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. I don’t really care which lakefront lots I keep. Clarence agrees to divide it.Conclusion When two people desire the same object and it is something that can be divided in some way. They have a recent appraisal that values the property at $150. Deal? Clarence: Sure. Lots must be at least one acre to be developed. They all have a great view and are equally desirable to build on. according to county deed restrictions. but is not sure how to arrive at a fair split.000. Archie is ready to build a retirement home on the property. Give me the map and a pencil. and wants to divide it into two separate parcels. I propose that you divide the fourteen acres into two parcels that you believe are about equally desirable: one parcel with three lakefront lots and the other with four lakefront lots. Clarence: Right. Archie: That’s true. Archie: I really don’t care either. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. That makes them more desirable. Clarence and Archie. Making Progress 165 . There is only one place for an access road that must serve all lots. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. quickly recognize the fairness of the divideand-choose method. both parties. that sounds fair. jointly purchased fourteen acres of lakefront property several years ago. so we should be able to divide the property fairly. even children. 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. Then I will choose which parcel I want.
Archie chose the parcel with the three lakefront lots. and the second parcel with four lakefront lots and one other lot. and both men were happy with the arrangement. Which would you have chosen? 166 50 Practical Negotiation Tactics .Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots.
Jason was having a hard time getting the salesman to lower the price. Brenda did her part when she said. delivery was limited to a small geographical area.” Many people have witnessed or used this effective negotiating tactic. he also set up all of the furniture in a second-floor bedroom. supposedly the bargainer in the household. because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. 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 . “Okay. With a great deal of effort. so the salesperson delivered the suite himself.” thus extending the scope of the negotiations. Conclusion The amount the couple spent was fairly large. However. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. Her husband Jason. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. His tactic was to throw in a “nickel” in order to make lots of “dollars. we’ll take the suite if you’ll throw in free delivery and set up the furniture.” Under store policy. and the delivery carrier doesn’t set up mirrors. is expected to dicker over the price.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. What started out as a single issue is now a combination of a major issue and a much smaller issue. The suite they liked best was already at the lowest price in town (the retailer was having a real sale). etc. miles from their home. attach legs.
If one party misjudges the situation.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. At the end of negotiations.important item.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. we’ll agree to Health Plan A with another ½ cent on the pension fund. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons. This experienced bargainer said. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. so be prepared to withdraw the nickel and dime item at the hint of trouble. it can be a dealbreaker. 168 50 Practical Negotiation Tactics . “Okay. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. In one case.
Kathy: I’ll take the pool table. and performance evaluations for people to come across as likeable.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. and all the rest is small junk. Kathy: Then I’ll take the couch and love seat. This creates what is called a “halo effect.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Donna: I’ll take the bar with stools. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . or knowledgeable. Kathy: But they are a matched set. decision-making meetings. People tend to make an effort to put their best foot forward. You can go first. but they are two pieces of furniture. 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. Donna: They match. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. Kathy: I suggest we take turns choosing which of these things we want. trustworthy. Donna: Okay. I’ll take the color TV. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest.
Example 2 During a heated labor negotiation. I want the love seat. Let’s call Johnny Ryan. what can we do? Give me the couch and love seat! No. Johnny had the “halo” of an honest person. I want the stools. I trust his judgment. The union negotiators. and he has always struck me as an honest person. He might or might not have also been a good arbitrator. and ask him if the couch and chair should be one item or two.Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. (Pause) We’ve got to settle this today and get this stuff moved. with a record of labor involvement that included three recent strikes. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. What for? Tell him the situation. 170 50 Practical Negotiation Tactics . He’s our cousin. and if the bar and stools should be one item or two. Good idea. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. 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.
the management team hired Sam Boston. but the power of the so-called halo effect was great.simply did not trust the management team. Boston was widely known as a totally honest man who speaks his mind. During the break. The teams took a weekend break from the stalled negotiations. and that he did. Conclusion The union leaders gave Boston a great deal of respect (even in areas such as budgeting and actuarial tables) because of his former position. He solemnly told the union negotiators that he had been hired to review it. the city management again hired Boston. The union accepted the proposal. Two weeks later. without any reservations. even if the proposal appeared to be valid. the former union president. but his mere presence caused the union leaders to accept a management point as valid. On Monday. He said he believed that it would work as presented by management. when negotiations again stalled on a retirement plan issue. They might have stretched his halo farther than his expertise and experience warranted. Boston went to the negotiation table with the management team. as a consultant to review their proposal. thus bringing the negotiations to a conclusion. This time. Making Progress 171 . the consultant did not speak.
Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. but we feel that it’s a fair offer. The owner. $237. has owned the house for 24 years and is downsizing to a condo. Here’s a list of the five that are about the same size as yours.000.000.000. They believe it is overpriced. $229. This offer is for more money than any four-bedroom houses on this neighborhood list. How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years.500. but the key is to gather facts that you might need—not just the facts that you will need.000. but the right facts presented at the right time can chill or astound and completely turn things around. $235.000 under the listing price! We realize that. and $237. Sam Jones. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240. but you’ve priced it way too high. the other party will ignore or refuse to believe the information. They sold for: $225.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. Sometimes. I’ll get back to you.000.000. We love your house. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics .000. What? That’s $35. and we are countering with an offer of $250. (Next day) We’ve reviewed the records you’ve produced.
The last 20 were over $2. We’ve talked with purchasing and we have the authority to buy seven for $2.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. I’ll get called on the carpet. No one can go over $1. Here it is. and wisely chose exactly when to present them in order to make his point.600 unless the company president approves. He found facts that supported his position.600 for a computer. Making Progress 173 . Supervisor: Well. Supervisor: If I okay this purchase order. Order the new computers. Conclusion The Joneses had based their asking price on the advice of a friend. if other departments have ignored the policy. Well… We have a written counter of $245. I asked for a list of all new PCs bought this year. You can’t pay more than $1. let’s not worry about it. The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. We accept. That’s the bottom price. I’ll be… Okay.000 each. and did his homework. who was not particularly knoledgeable about real estate. Hatfield: My staff has done a lot of research. and we know that only this model will meet our needs.400 each.000. Example 2 Supervisor: You know the policy. Hatfield: While I was at purchasing. Conclusion Hatfield had anticipated what his supervisor’s position would be.
reveal misperceptions or lack of knowledge about positions that can be corrected. Would I do that? Jenny: Maureen. I’m sure you would not. A maximum of three books can be checked out to a person at any one time. I can’t check out these four books? Jenny (Librarian): That’s the policy. but I don’t set the policy and I can’t make exceptions. Example 1 Maureen: What. If you trust me. I want two of these. yes. but you don’t want to jeopardize your job? Jenny: Yes. and two are for my husband. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. can you check out two on a card for him? Jenny: Well. I can do that within the rules. Maureen: So you trust me with the books. Maureen: Well. They can help you identify or better understand what the other side really wants. 174 50 Practical Negotiation Tactics . But I can’t break the limit rule—it is an absolute rule here. Maureen. some people would have forty or fifty books out at the same time. you know me. Maureen: Well. I trust you. and they would all be unavailable to others. and help you point out inconsistencies in a position that might “lead” the other side to change theirs.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions. Otherwise. The effective use of probing questions can help achieve a favorable settlement.
we can’t do that. Can you get me the number? Sure. Babu. it could kill us. are you sure I can’t get your information technology people to give us direct information on product sales? No. Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. and Kenzie. Brooks. Mary. (Next day) Do you have the policy about giving out product sales information? No. But this forces us to make decisions without complete information! Yes. I couldn’t find anyone who knew it. What’s the policy number or date of approval? I don’t know. They say it’s a security issue. Making Progress 175 . Jay.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. If that data ended up in the wrong hands. but it’s because you don’t have access clearance. Security? Right. Why? Some policy? Yes. Mary and Kenzie? They are 2-3 pay grades below us. Who does have access clearance? Mike. and they don’t even have a use for the sales data. Sue.
When can I get the data? Mark: Today. Jack: Here. Jack was able to receive clearance as well.Mark: Well.P. I’ll sign now. His probing questions turned up a critical fact. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. that’s been the policy since I’ve been here.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. if we can have access? Mark: I guess so. 176 50 Practical Negotiation Tactics . Once he discovered that employees in lower pay grades had access clearance. I’ll get it for you ASAP. Jack: Can you ask your V.” He intended to do this until he hit a dead-end or was able to find a solution to his problem.
If friends or neighbors need to settle something but prefer to avoid the negotiation process. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. 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. and the classic Walk Away (Tactic #48). this tactic can produce an agreement. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement. or even months after the first offer is presented. and the child learns an important lesson about life. They bring it out when a dispute arises. days. the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. In this process. When two parties believe they have an oral agreement. 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). hours. 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.Stage 7: Reaching Agreement he final stage! It might come minutes. When multiple issues are at stake and most have been agreed upon during negotiations. this process can easily result in a final settlement. T Reaching Agreement 177 . 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.
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. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. off-again discussions. After days and weeks of on-again. Nancy brought up the subject of vacation again after dinner. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. They both have stressful jobs and look forward to their annual vacation together. As he hugged her. “I’m thinking of agreeing to your plans for vacation. Example 2 Negotiations can take a long time and incorporate many issues. but his wife Nancy likes to stay put and relax.C.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell.” Conclusion The husband was so excited about visiting Washington. 2) allows the other side to feel the release that comes with completing the bargain. His wife had carefully planned her exact “premature” vacation agreement. She said. Let’s do go to Virginia Beach and Washington D. 3) and adds one last key demand to the congratulation sentence.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . Larry Snyder gets bored staying in any one place for many days. D.C. Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion.
) Here’s what happened: Bob: I knew that the other side was similarly harried. Reaching Agreement 179 . My team had convinced me that doubling the time frame would create a real problem on the shop floor. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. When the chief negotiator emerged with his team and headed toward my team. but held firm on remaining operating principles. I felt the tension in the room. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. However.” Bob: Ted timed this perfectly. We all knew that it could come down to agreement or strike. “It was hard for us. fit. but we agree to everything in your final proposal…” Members of my team shouted hooray. In our last offer. (This is a bad position to be in. because it makes you pretty vulnerable. but acceptable. The celebration had begun. symbolizing that he was agreeing to the entire final offer. One of the best pieces of negotiation advice is to remain fresh. “…as long as you give us a 45-day probation period. but also that they sensed the weariness of my team. but the other side continued to ask for 60 days. as the negotiator came closer. we held firm on this and did not discuss the probation issue and many other “dead” issues for days. My team was afraid we would not even come to an agreement. he turned on a large warm smile and extended his hand to shake. and rested. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. Ted said. we made some small concessions on financial matters. The old agreement specified a 30-day period. Therefore. One operating issue involved the probation period for new employees. There were grins and handshakes coming from the other side. It was so close.almost willing to accept any deal.
knowing that it will probably be agreed to in order to continue in the euphoria of the moment. the negotiator skillfully finishes his words of congratulations by inserting one last key demand.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation. 180 50 Practical Negotiation Tactics . The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. However.
all from Sue Wilson. or go after you and perhaps make a new concession in order to get you back to the table. My name is Jay Vahaly. Sue: I remember you. be sure you think this through beforehand. You bought your wife a new van just last year. Sue: Let me get you the keys so you can take this one home overnight to see how you like it. but his Avalon has been a good car. Whether you are really bluffing or you are serious. The next morning.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. I don’t want to negotiate. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. and he can simply buy it when the lease expires. but I thought I might want to try a new Highlander. if I roll over the lease to a Highlander. here are your keys. too. Your opponent will have to either let you go and run the risk that things are really over. I’ve worked with you before. a veteran salesperson. (Vahaly drives the new Highlander home. Sue: Well. He really likes it. the following exchange occurs. how did you like it? Jay: Okay. Jay: Hi. Jay. and the lease on my Avalon is about to expire.) Jay: Sue. Jay. He stopped by Pembroke one day to look at the new models. what can you do on a 36-month lease? Reaching Agreement 181 . I like it. right? Jay: Yes. You had time to assess my car. but my Avalon is a good car.
you can turn in the Avalon and get the Highlander for only $249 dollars more per month. Jay. He effectively used the walk-away tactic to let Sue know that he was firm on the price. but 182 50 Practical Negotiation Tactics . That was the figure he was looking for. (He walks away) Sue: No. I’m disappointed. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. Jay—wait. He was prepared to keep his Avalon if the lease was even $1 more than his limit.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well. $100 more. I thought I’d get a fair deal. a successful musical instrument sales and rental store. they came down to $199 more on a thirty-six month lease. These Highlanders are hot items! Jay: Well. at most. Let me try again. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. Jay. Jay: What? I was thinking the lease payment would be. Jay accepted. Please go back and work out a lower lease payment. (15 minutes later) Sue: Well. (Jay got in his car and drove home. Sue: I’ll try. They’ve talked about retiring in recent months. Sue: Sorry. Sue called him as soon as he walked in the door and offered another $50 break on the lease.
5 million. I still want to develop this block. and I only need your building to own it. Larry: Yes. Michael: I have a check right here for 4. and I’m prepared to offer you $4. they were prepared to accept $5. and I’m not interested in less. In reality. and we gave you our price. What do you think? Judy: Larry. He met with Bizannes twice before. but their continued walkout convinced Michael that they would hold firm. Michael: Good morning. Larry: Michael. come out here! (Judy comes out from the back room. which the Bizannes accept. You rejected it. visited their store.5 million. One day. Two months later. How’s business? Larry: Great! I’m surprised to see you again. Judy: Larry. Michael calls on them again with a check for $5.5 million for the building. go back to your office.both of them love their store. a local developer. after no contact from Larry or Judy. you’ve already told us that. so why are you here? Michael: I’ve discussed it with my partners. Larry. Larry: Judy. (Judy and Larry walk into the back room and close the door. Larry. our accountant said it’s worth $6 million. let’s eat lunch. Michael Roberts. with a certified check. and he is offering us $4. Reaching Agreement 183 .5 million. Michael: Well. today.0 million.) Larry: Michael is here again.) 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.
Jenny: No.000. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. Jenny has an antique Singer sewing machine. but they wanted to give Jenny $500 for her “share” of the machine. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). That was the deal. In arbitration. Lynne: No. They inform her that they put the machine on e-Bay and have an offer of $1. Jenny told them to sell it. Example 1 Jenny and Lynne are sisters. which is generally voluntary. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Both involve the use of third parties who are objective. In most arbitrations. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. We have a few dollars invested in parts and we had fun working on it. In ﬁnal offer arbitration. and would be able to restore hers as well. Six months later.000. 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). Let’s split the money. Lynne and Gary bring the restored Singer to Jenny’s house. In mediation. which she has kept in a barn for over ten years. both sides have agreed in writing to accept the arbitrator’s decision. I offered it to you for nothing. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. Each party wants their offer chosen. 184 50 Practical Negotiation Tactics . I won’t take it. Keep the $1. the arbitrator is given the authority to make the parties comply with the ﬁnal and binding decision. One day Lynne dropped by for a visit and the discussion turned to the old Singer.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Lynne responded that this was their intention. Lynne told Jenny that she and her husband Gary have restored two other Singers.
m. based Reaching Agreement 185 . (One week later) I think Jenny’s position is the most reasonable. Tina: Good. on Friday. The union’s position could have run into millions of dollars. I have chosen management’s offer to keep it as it is under the current contract. Example 2 Ralph: Well. Tina. we are down to only three unresolved items. so I am invoking the finaloffer arbitration ground rule we have in place. I’ll buy that. Ralph: I know. binding decision on the three items. I can’t see any way to reach an agreement.m. the old machine was only worth $50 when Lynne hauled it away. after six weeks of negotiating. and meet back here in 72 hours—3:00 p.” Lynne proposed a 50-50 split. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker. My troops are getting restless. As a brief explanation.) Judge Ryan: Here is my written. 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. since he could only choose one offer. Ralph: Right! (Friday at 3:00 p. he did not need to “haggle” with them. Their father found Jenny’s position to be the most reasonable. first on the health insurance co-pay. Tina: Yes. At best. They should get the other $950.Jenny: Dad: Okay. Then we both submit our final offers to Judge Ryan within 48 hours.
Ralph. It will only cost $120. Finally. Conclusion The final-offer arbitration process enabled the parties to gain a fast. Second. No increase has been given for six years. and an item that large should have been negotiated at the table. 186 50 Practical Negotiation Tactics . I have chosen management’s offer because the union did not justify why the past practice should be changed. on the clothing allowance. money. I have chosen the union’s final offer. I’m sure you realize that we could have taken six more weeks to reach the same point. but we agreed to this process. Well. Now let’s get a signed contract. and peacefully finalize a contract that contained several important gains for both sides.000—less than 1 percent of the total package.Ralph: Tina: on last year’s data. I’m not happy with your decisions. reasonable resolution to their last three unresolved issues. and stress. nor why their method was superior. At least we both saved time. on the merit pool distribution method issue.
The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. Bill and Paulette fell in love with the house. however. Seller: Yes. During a discussion. They saw the “For Sale” and “Open House” signs. Obviously. They were not the only couple to come to the open house. everyone is busy grappling with the details of the negotiations. At the very least. we won’t be involving our real estate agent. Example 1 Bill and Paulette had been house-hunting for some time. and felt that they would have to work fast to make an offer before someone else did.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.000. Bill: Reaching Agreement 187 . They finally looked at a house they really liked. not the furniture. and while Bill and Paulette had been using an agent to help locate houses. they looked at this particular house on their own. and decided to stop by to see if they liked the house. Bill: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations. If we shake hands on it right now. The owners were selling the house without a real estate agent. all the usual stuff in a sale. and one of the other couples looked very interested. We’d like to make you an offer of $150.000. Bill pulled the seller aside. Seller: We’re asking $152.
the house is yours. he began to have “problems” with her job performance. and the two area rugs. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. and had been prepared to drop his price to $145. It worked. and that the problems with her job performance were. in fact. since he probably would have missed them) Yes. he listed the stove.Seller: Just a minute.000. When he had the chance to put the deal in writing. Conclusion The seller had always intended to leave the garbage disposal. Let me just get the standard “offer of sale” form and fill out what I hear you saying.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. she said that her supervisor had repeatedly asked her out. Seller: Okay. the hutch. I think we can work something out. The supervisor assured the employer that there was no basis for her complaint. The supervisor pointed out that he had a staff of 20 or so women.) Seller: So. (The seller recorded the offer of $150. all window blinds and drapes.000. and two area rugs. In her complaint. Under the section for appliances to be left on the property. look this over. Example 2 Monica brought a sex discrimination charge against her employer. and the garbage disposal. but I’d like to make sure there are no misunderstandings. he listed an attached hutch in the kitchen. In the section for fixtures and miscellaneous items to be left on the property. he left the price at $150. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . If it’s what you meant. and when she refused. real. the refrigerator. Bill: (pleasantly surprised to learn that the garbage disposal. that’s what I meant. the hutch. Sign here. then we have a deal. a public agency. and the two area rugs were specifically included.
The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100. You’re just trying to make it seem as if your supervisor did nothing wrong. and expensive matter. Withdrawing. but said that fighting the charges would be a long. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100.000 without actually having to prove anything. drawn-out. Look. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. and must agree not to tell anyone about the $100. But the employer doesn’t want to go through the expense and publicity of a trial. you didn’t mention in the agreement that in exchange for the $100. then Monica had to acknowledge that the supervisor did nothing wrong. The supervisor insisted that if the employer felt he had to settle.000. He’s happy to prove that in court.000. Monica had. but it’s not standard when a complaint is formally withdrawn. And the confidentiality clause is standard.000. my client is supposed to formally withdraw the complaint rather than just settle it.there was little basis for the complaint. settling—What difference does it make to her? She’s getting her $100. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim. by this time. Why’s that? Well. even though you are paying Monica because we can prove he did do something wrong. I’m He: She: He: Reaching Agreement 189 . It might be standard when there’s a settlement.000. even though we’re certain we would prevail. He offered to send settlement agreement papers to her.
000. There was a confidentiality agreement. It was made clear that the employer had paid the additional $100. to his disadvantage. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement. 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. Monica accepted the $200.000 just to get the employee to “withdraw” the complaint. It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations. I’ll take your offer back to her and let you know.000.She: authorized to pay $200.000 when all that was asked for was $100. but word did get out that a public agency paid $200.000 and the conditions of the offer. 190 50 Practical Negotiation Tactics .
depend on the kind of negotiations in which you are involved. Putting an agreement into writing serves three purposes: communication. a written document is hardly necessary. However. In Tactic #17 (Package Items). but it was not what I meant. it would have been easier to resume negotiations at a later date. A union contract. talking is not always the same thing as communicating. If the agreement reached at the time had been put into writing with all three sisters signing it. One way to help the parties abide by an agreement is to put it into written form. As these examples of personal and business negotiations show. most certainly needs to be in written form. operating under an agreement after it has been reached can be even more difficult. Reaching an agreement is the first step. Think of how often you have said to someone.” Clear communication is essential if you want to reach an agreement and have it abided by. Certainly someone has said to you. commitment. reaching an agreement is sometimes a long and difficult process. however. it is much more effective in the long run when the parties enter into “win-win” agreements. The degree of detail and formality of a written document will. “Oh. then the parties have to abide by the agreement. of course. even an informal agreement benefits from some type of written documentation. I thought you said something else. rather than attack each other. and contract. A Communication Hearing is not necessarily the same as listening.” By the same token. Unfortunately. when they engage in honest “give and take” negotiations. “That may be what I said. Putting the Agreement in Writing 191 . and when they agree to solve problems together. the three sisters reached an amiable agreement.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. When two friends agree on what movie to see. but some of the decisions were put off for a couple of months.
The sender wishes to convey an idea. nine hundred and forty-four dollars—$22. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. he can be reminded of the details because it’s all there in black and white.Communication is a process that involves a sender and a receiver. or movements. pictures. 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. His mom could more easily enforce the agreement if she had it in writing. When you create a written record of the details of an agreement. or movements being used by the sender. Who isn’t excited about buying a brand new SUV or truck? Until. sounds. sounds. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. In Tactic #4 (Use Objective Criteria). When communication is limited to the spoken word only.944. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. the price is spelled out in the loan document as “twenty-two thousand. or express a thought or emotion through words. seek information. you have created something tangible that can be referred to in the future when memories become fuzzy. that is.” In Tactic #14 (Don’t Always Hide Your Weaknesses). The receiver has to decode the message being sent by trying to understand and interpret the words. the message being conveyed and received might be understood differently. 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. And because the sender and the receiver are two unique individuals. pictures. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. a couple of months away. 192 50 Practical Negotiation Tactics . If Jason fails to live up to his side of the deal.
how many. or it isn’t an agreement—it’s merely the conveying of a gift. and put that information into the document. dating it. protect yourself by having a written. 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. signed. have your spouse also agree to the details of the agreement. In either case. Generally. details such as what fixtures stay or what appliances go can be easily overlooked. WHAT? The written document should clearly describe the item(s) covered by the agreement. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. Carefully and completely describe the subject matter of the agreement. as many people learn when they purchase a home. and getting all the parties to sign it usually creates an enforceable contract. your plants die because the house-sitter wasn’t told to water them. Here’s what we mean. which kind of. which. When you are ready to commit yourself in writing. One party wishes to buy what the other wishes to sell. Putting the Agreement in Writing 193 . when. where. Failure to do so can lead to big problems. say. However. and how much. You can do this more formally by taking them to court (perhaps as a last resort). 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. and dated agreement. one party will work if the other party pays for the work. what. one party will change behavior in exchange for something of value from the party who wants the behavior changed. ask yourself the basic questions of who. If you have agreed to pay someone to house-sit while your family is on vacation. the real estate contract includes information about the buyer and seller. before the trip. leading to misunderstandings and contract disputes. in writing. why. WHO? Provide of the full names the parties necessary to the agreement. and so on in standard contract form.Contract Finally. pulling an agreement in writing. Both parties must receive a benefit or something they personally consider of value. the address and description of the real property.
depending upon the deal: when or where. the better. dating it. which one or which kind of. 194 50 Practical Negotiation Tactics .The remaining questions fill in the details of the agreement. in fact. if that becomes necessary). how much or how many. The more-specific and clear these details are. And it can create a tangible reminder of the deal (or an enforceable agreement. It gives the parties an opportunity to really buy into the deal. Putting an agreement in writing. and having all parties sign it ensures that the parties have. agreed to the same thing.
and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
and how they can be used: 196 50 Practical Negotiation Tactics .Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful.
________________ 5. ________________ 6. ________________ 2. ________________ 8. ________________ 9. ________________ 10. ________________ 7. ________________ 3.Name of Negotiation Tactic 1. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 . ________________ 4.
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1988. E. Domenici. Irwin. Sharpe. Brown. New York: M. W. 1988. Patrick J. Gavin. Los Altos. Labor Relations and Collective Bargaining: Cases. 1989.: Crisp Publications.REFERENCES Carrell. New Jersey: Prentice-Hall. Negotiating in the Real World. Practice. George. Herb. LittleJohn. Ill. Patton. Chicago: Richard D. University of Missouri: Columbia Press. Clark.. Fiske. Kennedy. 2001. Upper Saddle River. Upper Saddle River. Lewicki. Inc. 1997. Roger. Cohen. Getting Together: Building Relationships As We Negotiate. Minton. Calif. and S. You Can Negotiate Anything. 1987. D. Inc. C. Pocket Negotiator. M. Inc. and Law. References 199 . New York: Penguin Books. Inc. R. K. Inc. The Relaxation and Stress Reduction Workbook. Inc. The Negotiator’s Handbook. Cleary. 2004. Getting to Yes: Negotiating Agreement Without Giving In.: Waveland Press. and J. M. J. Negotiation Skills. Victor. and M. Gotbaum. 1991. David. Roger.. Saunders. Eshelman. Fuller. and J. R. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. Ury. New York: Penguin Books. Inc. Oakland.E. and C. Prospect Heights. R. 2nd ed. The Negotiation Handbook. McKay. and S. Mediation. 1996.: New Harbinger Publications. New York: Simon and Schuster. 1999. M. 1980. 2001. New York: Bantam Books. and B. 2nd ed. Calif. Heavrin. 1991. W. 7th ed. New Jersey: Prentice-Hall. The Essentials of Negotiation. New York: Basil Blackwell. Maddux. Fisher. Fisher.
Heath and Company. 1994. Howard. The Mind and Heart of a Negotiator. R. Labor Relations in a Global Economy. New York: Penguin Putnam. The Eight Essential Steps to Conflict Resolution. Dudley. Howard. Massachusetts: PON Books. Raiffa. Massachusetts: Harvard University Press. Weeks. Stulberg. Inc. B. Raiffa. New Jersey: PrenticeHall. 1991. Shell.negotiationsources. Getting Past No: Negotiating with Difficult People. Tsogas. 1999. 1981. New York: Bantam Books. Upper Saddle River. 1998. C.Nierenberg. www. L. Inc. The Art and Science of Negotiation. Taking Charge/Managing Conflict. Gerald I. Lectures on Negotiation Analysis. 2001. George. William. New York: Viking Press.org 200 50 Practical Negotiation Tactics . Inc. The Art of Negotiating. Cambridge. 1996. Thompson. 1987. J. Massachusetts: D. Sharpe. G. 1982. Bargaining for Advantage. New York: Simon and Schuster. New York: M. Lexington. Cambridge. Inc.E. Ury.
and negotiations.A. Personnel Journal. and MBA and B. Business Forum. Organizational Behavior and Human Performance. The Journal of Accountancy Training. He received his doctorate from the University of Kentucky. Dr. in Economics from the University of Louisville. The University of Nebraska-Omaha.D. has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. organizational behavior. During his academic career he has received awards for both outstanding research and teaching. In addition to negotiating numerous litigation settlements and contracts. Carrell is Dean of the College of Business at Northern Kentucky University. In addition. and Public Personnel Management. and the University of Louisville. Human Resource Management. 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 . Books published by Dr. Labor Law Journal. he was elected to the City of Louisville Board of Aldermen for five terms. Morehead State University. Marshall University. M Christina Heavrin J.ABOUT THE AUTHORS ichael R. HR Magazine. Carrell are in the fields of collective bargaining and labor relations. Carrell has held academic positions at California State University. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. Bakersfield. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. Personnel. and served as President of the Board and Mayor Pro-tem for three terms. The Academy of Management Review. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. The Personnel Administrator. which is located in the greater Cincinnati area.
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. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. Ms. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. Jefferson County. the City and a for-profit hospital for guaranteed indigent health care services for city residents. 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.park and a successful industrial park in the City’s enterprise zone. 202 50 Practical Negotiation Tactics . an agreement between the State of Kentucky.
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